"Create a Bidding Frenzy and Sell More Product
Through the Giant Online Auction Sites!"

What's all the hype about online auctions? Why are we hearing so much about them? Are they really profitable? And HOW CAN YOU GET INVOLVED?

Online auctions have effectively created a giant virtual marketplace where people can gather to buy, sell, trade, and check out the goods of the day; they're enormously popular, high-traffic venues where start-ups and auctioneers alike can begin selling product almost immediately, with...

- No overhead or upfront costs
- No sales staff or distributors
- No web site of your own
- No initial investment (you'll pay between 2%   and 5% of your final sale price to the auction site)

In this massive marketplace that will generate an estimated $48.5 billion in sales by 2006 (Forrester Research), the auction site that rules the game is eBay (http://www.ebay.com).

According to Neilson Ratings, eBay is among the top ten most-trafficked of all sites on the Internet -- and with three million items listed in 3,000 categories and 1.5 billion page views per month, this is not hard to believe.

eBay leads the online auction industry with over 60% market share, while its closest competitor, Yahoo! Auctions (http://auctions.yahoo.com ), is only half its size, and Amazon.com Auctions (http://www.amazon.com/auctions ) follows at a distant third.

The amount of traffic that these sites attract make online auctions an ideal place to capitalize on readily available, widespread exposure. However, I must warn you -- the competition is fierce in popular categories, and your product can easily get lost among the hundreds of listings.

So whether you're selling a knick-knack or two or becoming a full-time baseball card dealer, there are a number of things you MUST do to harness the volumes of traffic heading your way and GENERATE THE HIGHEST PROFITS POSSIBLE.

That's why I've created an eight-step game plan for selling products through online auctions to help you make the most of this potentially valuable marketing medium...

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STEP #1: SELECT YOUR SITE
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First of all, you have to think about which online auction site you want to use. eBay is the obvious choice because of its reputation and the amount of traffic it receives.

But different auction sites tend to cater to different markets. For example, eBay has 25,000 laptops for sale but almost no birdfeeders, while Amazon has 750 birdfeeders but only a handful of laptops.

Amazon has the reputation of being a bit less user-friendly, but if you're selling a birdfeeder-related product, you may find an established market here. On the other hand, you might have better luck selling your item on an auction site that has less direct competition -- your best bet is to test both.

To determine which site is best for your product, check out the top three or four in your field -- look at specialized auction sites as well as the big ones. There are hundreds of specialized online auctions that cover the spectrum from antique books to business liquidations.

Check out item quantities and bid lists to see how much demand there is for your product. While you're there, you might even want to try bidding on a few items to get a feel for the process and the competition involved. (But don't ever bid on an item that you don't plan to buy!)

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STEP #2: PICK YOUR PRODUCTS
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Are you going to sell unique, one-of-a-kind products item by item? Or do you have a product you can sell in quantity? Is there a demand for your product? (This is less of an issue for one-of-a-kind items.) What kind of profit margin do you expect to be making? (This can determine whether or not you'll have to sell in quantity.)

In the world of online auctions, niche markets are responsible for 43% of total sales. Not bad, hey? But don't disregard the remaining 57% generalist market share! Bottom line: you can make money with both.

Collectibles are the best-selling items at auction sites, with computer hardware and event tickets in second place, and toys and books hovering around third.

But while popular items may be easy for you to sell, you could also make a killing on a unique item with a HIGH PROFIT MARGIN. People are making money hand over fist from specialty items like cigars and lobster -- that are shipped by mail!

"Fad items" are where you can really cash in quickly. Remember the Beanie Baby phenomenon? People went nuts and bid literally thousands of dollars on them!

It would be difficult to build a web site and try to generate traffic around a fad item -- by the time you were done, the fad might already be old news! But auction sites give you an INSTANT AUDIENCE AT A LOW COST, so if you spot a trend, you can hop on the wagon as quickly as possible.

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STEP #3: LOOK AT LISTING OPTIONS
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The next thing you need to think about is HOW you'll sell your product. Auction sites typically offer a variety of listing options for you to choose from, including:

• REGULAR LISTINGS: A regular listing is just that -- you pick your category and your product gets listed in it. While this is the most common (and really the least effective) way to list your product, you should DEFINITELY start with this option. You'll want to see how your product does before you decide to spend money on featured listings.
  
  
• RESERVE PRICE AUCTIONS: If you place a "reserved price" on your item, it means that you have specified the amount at which it should sell. This is done to prevent "auction sniping," which happens when bidders lay low until the very last moment, then grab your item without starting a bidding competition.
  
  Reserved Price Auctions can be to your benefit, but they may discourage bidders who are looking for the best deal.
  
  
• DUTCH AUCTIONS: Also known as "English Auctions," these are one of the best ways for people selling in quantity to place their products, because you can list multiple identical items at once in each auction.
  
  However, on eBay you must have a "feedback rating" (see Step #6) of 50+ and you must have been registered for more than 60 days before you can choose this option.
  
  
• FEATURED ITEMS: In most of the larger auction sites, you can get your item rotated through the site's homepage as well as listed in the "featured items" section for about $20. For about $15, you can have your item appear in your category's "featured items" section, or simply at the top of the list.
  
  You can also have your photos displayed in a gallery for only about 25 cents, or featured as a large photo at the top of a gallery for about $20.

You also have the choice of listing for 3, 5, 7, or 10 days -- and, of course, you always have the option to re- list at the end of this time. The standard option is a 7-day listing with an automatic re-listing for a specified period of time.

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STEP #4: CHOOSE YOUR CATEGORY
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Explore the product categories on the various auction sites to broaden your perspective of what goes where -- you definitely want to be specific, but you don't want to limit yourself. While you are doing this, check out the competition in different categories and have a look at how much bidding is going on.

The very best way to decide which category your product should be listed under is to do a search on similar and related products, determine which ones sell best, and see which categories they are in. You will usually be able to pick one main category and one sub-category -- use this method for both.

Check to see how easily your product can be found using the site's search tools before you settle on a category.

Whatever you do, do NOT try to gain more exposure by placing your product in unrelated categories. Your online auction site will probably close your account if you do.

 

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STEP #5: CREATE YOUR AD
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Once you've decided how and where to list your product, you need to turn your attention toward selling it... And that means you need excellent advertising!

Think about your target market -- who's going to buy your product, and, perhaps more importantly, WHY. You need to GRAB THEIR ATTENTION AND MOTIVATE THEM TO BUY FROM YOU.

How? Well, first you need a very good title. It's really important that you're specific: instead of saying "Doll" in your title, say "Two-foot-tall dancing Elvis doll." Don't assume that your bidders will understand you -- make everything as clear as possible for them.

And make it as exciting as possible. You'll probably have to pay a bit more for special formatting like bolding or highlighting (one to two dollars), but these can be a good way to grab the attention of potential buyers.

Use exciting and convincing words that draw the buyer to your item: "Unique two-foot-tall dancing Elvis doll -- Collector's Edition."

The same techniques apply to your product description. Expand as much as possible on your product -- obviously, there's only so much you can say about a baseball bat, but what if it's an original 1915 Louisville Slugger used by Babe Ruth himself in warm up?

Try to create a story around your product, even if it's just how amazing you personally think it is (in which case you will have to come across as likeable and convincing yourself!). Include specific motivations for buying your product: "Be like Babe Ruth!" or "Impress your friends with your dancing Elvis!"

Think about other ways you can motivate your bidders -- can you provide solid guarantees, free shipping, or bonus products? Tell them what you have to offer!

And don't forget about photos! People don't want to buy what they can't see... and on average, they'll pay at least 10% more for an item that is accompanied by a photo.

IMPORTANT NOTE: Make certain that you are NEVER dishonest in your product descriptions, because you'll never have any repeat buyers... and you'll get kicked off the auction site!

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STEP #6: ESTABLISH TRUST
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The best way to establish yourself as a trustworthy, reliable seller in an online auction is by having a good feedback rating. A feedback rating is a listing of customer comments, rated as positive (+1), neutral (0), or negative (-1).

If you are not trustworthy, your feedback rating will warn other buyers to stay away from you. If you have a positive rating, you can increase your sales by as much as 7-9% (and this number will steadily increase as the feedback rating system catches on).

Ask for feedback from your buyers whenever possible -- most auction sites make it easy for buyers to rate and offer comments on your service. Not only do you want to build a positive rating; you also want to show a large number of responses in order to establish yourself as an experienced seller. Don't worry, though -- people don't usually shy away from newbies.

To ensure that you get a good feedback rating, make sure you always...