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Automate to Ramp Up Sales
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Secrets of the eBay Millionaires
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I have always been a sort of an entrepreneur, says Kevin Harmon. In college, at the University of Illinois at Champaign-Urbana, I had a T-shirt business. That s how I paid for college. I had a coupon business for a while. I have owned several types of entities some worked, and some didn t. eBay definitely seems to be working for Harmon. Since he first bought a purse as a Christmas present for his wife on eBay in 2002, he has managed to build up, in less than three years, a feedback rating of more than 58,000. To build up that many sales and positive feedbacks that quickly, he has managed to sell an average of 52 items every day. At any time, he has as many as 381,000 items for sale in his eBay Store. How did he ramp up so quickly, and how does he keep his sales level constant He passes on some of his tips and best practices in the sections that follow.
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Business name Inflatable Madness LLC Seller name Kevin Harmon Web site Sells http://stores.ebay.com/Inflatable-Madness-LLC
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Doing eBay Bigger, Better, Faster: Kevin Harmon
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I got started on eBay because I didn t want to pay full price for an expensive purse for my wife for Christmas 2002, Harmon recalls. I joined up, and I found a really nice purse for two-thirds the price it would cost in a store. I thought Huh, that s interesting. Maybe there s something to eBay. So I sold some things out of my closet, to see how the e-mails work and how My eBay works. So far, the story is probably one you are familiar with. You start out selling your own possessions, and you move on by finding merchandise to sell in bulk. What s special about Kevin Harmon s story One thing is that he decided to sell something that s in high demand. Another is that he wasn t reluctant to find as many items as he possibly could.
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You Need a Solid Breadth of Product to Sell Well on eBay
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Once I got the hang of selling, I looked for things I knew well enough that I could resell them. I am a movie buff, so I decided to try to find DVD and VHS movies. I went to local flea markets, buying stuff I thought I could resell DVDs, wacky stuff. That got me off the ground. There are 15 flea
CHAPTER 11: Automate to Ramp Up Sales
markets within 15 miles of Charlotte, North Carolina, so that kept me going for a while. But I needed to find larger suppliers and variety. That s the problem with eBay: It s two miles wide and two inches deep. You need a solid breadth of product to sell well on eBay. There are at least 45,000 DVDs and 200,000 CDs, so I knew there were lots to sell, if I could find them. I started a big search and scoured the Internet to find suppliers. Another secret to Kevin s success: the realization that people don t like to click on link after link on eBay when they re shopping. They want to find a single store that has thousands of different items for sale rather than going through thousands of stores, each with a handful of items. As you can see from his eBay Store which has the easy-to-remember name Inflatable Madness LLC he carries as many as 38,000 DVDs and around 100,000 CDs (see Figure 11-1).
FIGURE 11-1 This seller focuses on breadth of inventory in a few popular categories.
Secrets of the eBay Millionaires
Our Model: Virtual Inventory We Don t Own Until It s Sold, and National Distributors
When you ramp up and start putting thousands (or tens of thousands, or even hundreds of thousands) of items for sale on eBay, the question naturally arises: Where are you going to store all this stuff If you don t ask the question, your spouse or your children surely will. There are two different solutions to this problem, and Kevin Harmon uses both of them. I started my office in my house. I had one bookshelf that held 200 DVDs, and I remember at that time, I was freaking out with how many DVDs I had. (Now I have 200,000.) When I ran out of space, I moved to an 800-sq. ft. office. Then, I moved to the office next door and took over both spaces. Now we re in a 2,000-sq. ft. warehouse, and we re moving to a new space. The key to such growth is having lots of merchandise to sell, and that, of course, depends on finding the right suppliers. Through our distributors we can offer as many as 300,000 items, says Harmon. There s a whole lot we could offer; it s just a matter of finding what sells on eBay. Finding what sells requires research in eBay s completed auctions, which Harmon conducts on a regular basis. It s also a matter of pricing lower than the competition. In the case of CDs and DVDs, Harmon knows he s competing with the many brick-and-mortar stores that sell movies and music. He realizes that the only reasons someone would make a purchase on eBay are price and selection: He has to offer items at a lower price than the competition, and he has to offer unusual, even strange items that people can t find easily, such as the movie shown in Figure 11-2. Ninety percent of our items are more expensive than a brick-andmortar store. Someone could indeed buy a DVD for $16 in a physical, retail store and they would pay $21 through me if you include shipping. I m taking advantage of the laziness of the world. The average big-box store like Best Buy has 2,000 titles. We have 200,000 titles including many unique, rare movies. You have limited movie selections in the local store, so you go online. My business works because I found a lot of products to buy the right type of products. eBay is a site where you have to sell at competitive wholesale pricing, and then you just offer everything under the sun. The Inflatable Madness LLC business model doesn t require Harmon to store every one of the items he sells in his warehouse, however. Like many eBay PowerSellers, he uses drop-shippers: suppliers who sell merchandise and hold on to it for the owner; when a purchase is made, they pack and ship it as part of their services. The eBay seller never actually sees them. Our business model is twofold virtual inventory we don t own until it s sold, then national distributors.
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