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If ebay ever realise that they are not making enough money then they can simply sell the stuff that they are smoking - it has to be good stuff.

I'm referring to the new rule that you cannot have different payment methods for different countries.  Why the heck not?  I can think of several reasons why it must be allowed.

The first problem is cheques, I allowed Australians to pay me via cheques as there were no fees involved; but if a cheque arrived from overseas then I returned it with a brief note explaining why I cannot accept it.
That reason is simple, it costs a fortune!!
My mother used to run a magazine subscription service where she took credit cards from readers all over Australia and New Zealand.  One day a cheque arrived from a New Zealander for $80 (a normal subscription fee), my mother decided to cash this cheque and it took 3 weeks to clear (local cheques take 3 days to clear), but that wasn't what nearly caused my mum to have a heart attack - that was caused by the $50 international clearing fee (she lost heavily on this transaction but we all learnt from it).  She has never accepted another International cheque.

By the way - international money orders are just as bad, it takes weeks to clear and has huge fees associated with it.  I have no problem accepting local money orders though as it costs me nothing.

Next option is Direct Debit, this is really hard to do for International buyers and in most cases buyers will look elsewhere for their item.  Most of my sales were in the $2 - $20 range so a buyer wasn't about to pay a $20 fee to transfer money overseas.  Side note - to transfer money overseas from Australia you need to go to the bank unless you have set up your account for this.

The other option is Paypal (which ebay is forcing all Australians to use as of May 2008 - Big Brother here we come).
Now Paypal charge around 2.5% per transaction, this goes on top of ebay charges of around 2-4% (prices have changed since I was trading full time on ebay).  So using Paypal effectively doubles my fees so I really don't want to use it unless I have to.

When I sold on ebay I offered several methods of payment.  Australians (40%) could pay via Money order, cheque or direct deposit (most of my regulars paid via this method).  For international buyers (60%) they could only pay via Paypal.  This method worked fine and kept my expenses down.
This is no longer acceptable according to ebay's new terms.  My question is simple - Ebay has always claimed that they are simply a 'market facilitator' who doesn't get involved in transactions, so why are they now?  And to what extent will they be getting involved?  Ebay has opened a can of worms with this which means the real question is - can they handle it?

If saving a dollar here and there sounds pedantic then I need to point out that I was doing around 400 transactions each week - so each extra dollar charged by Paypal or ebay equated to a $400 loss each week.

I wrote the following articles in late 2006 for an online newsletter. I was asked to write these article to explain ebay for small business owners and how it could help them.

My online ebay course can be found at www.learninternetauctions.com

An Introduction to ebay

By James Clifton

One of the big buzzwords in the media and the Internet at the moment is the word ‘ebay’; but what is ebay?  Simply put ebay is an international auction site where people put their collectibles on and the potential buyers bid on the item.

Well that’s how it was in 1995 when it all started but now it has grown.

These days we have the option of buying an item outright if the seller puts a price on it that they are willing to accept (and therefore avoiding the problems of an auction, mostly waiting a week for the auction to finish before the item is paid for).

 It’s not only about collectibles now either, with an estimated 104 million listings at any one time you can be sure that any item that you are looking for will be there.

I remember looking for a comic book that my brother and I had a huge fight over, we were 10 & 12 respectively; now, 15 years later, we look back and agree it was a funny time.  So we went onto ebay to find a copy; straight away we found 2 copies (which we promptly bought for $1 each) – we bought both copies so we didn’t have another fight over who owned it!

 The question I get asked most is ‘Can I make a living on ebay?’ and I always give a diplomatic answer about how you only get out what you put it.

Ebay is not an answer, it is a business tool.

It took me 5 years to learn that lesson, ebay is a tool like any other tool you use in business.

From a personal example, I had a plumber friend who made his living unblocking drains with a tool called an ‘eel’.  He could do the other things that plumbers do but concentrated on this one tool.

So yes, you can make a living by using one tool (ebay) but diversification, and using many tools, makes sure that not all your eggs are in one basket.

Scams and how they affect ebay

By James Clifton

 I teach ebay, but part of that course involves teaching about scams and how to avoid them.  You wont’ be on ebay too long before someone sends you a fraudulent email.

 So what does this email look like?  It looks like a real email from a real company (for this article we’ll use ebay as an example, but it could be your bank).

This email explains that your account has been suspended because of a “potential security issue” and that you need to log in to verify who you are in order to re-activate your account.

 The email will have a button in it that you can click in order to log in; but here’s the trick, the link is not to eBay’s log-in page but on the scammers web server which is displaying an exact replica of that page.  If you log in you have just given your details to the scammer!

 This is more commonly know as ‘phishing’ and is the way that scammers get your details; what they do with those details is numerous and I can guarantee that they are all illegal.

On my web site www.thebestscams.com I explain Phishing in more detail and what scammers do once they have your details.

 The best way to get around these scams is Knowledge.

If you get this email from ebay then simply delete the email and type www.ebay.com into your web browser – DO NOT CLICK ON THE EMAIL.

If the email is supposedly from your bank then delete the email and ring your bank; 99% of the time the bank will tell you that the email was false (I have been doing online banking for 8 years and my bank has never emailed me, they always ring me).

Remember - DO NOT CLICK ON THE EMAIL, delete it.

International sales & payments

By James Clifton

 The best thing about ebay is that your shop is now open to the world.  Customers from the USA, England, Europe (or anywhere else with an Internet connection) can now buy from you 24 hours a day.

 Once you have the sale you will need a method of receiving payment.

 If you are a Bricks and Mortar store then there is a good chance that the bank has given you a merchant account which allows you to accept credit cards from anywhere in the world.

 Unfortunately the majority of sellers on ebay don’t have a merchant account.

 The most common method on ebay is Paypal.  I will add that ebay owns Paypal so on ebay it’s the ‘preferred’ method of payment.

 So what is Paypal?  It simply transfers money between Paypal accounts after withdrawing the money from your credit card.  (Paypal accounts are free to create, you will need a credit card though).

The advantages of this is the fact that the seller has no need to see the buyers credit card (and if the seller doesn’t have credit card facilities why would they need to see the credit card number anyway?); this will make the buyer more comfortable as they only need to give their credit card number (once) to Paypal and that can be used for all their purchases on ebay.

The only drawback is that the seller must pay a 2.5% surcharge to Paypal each transaction while it is free to use for the buyer.

The next option is ‘Paymate’ which works the same as Paypal but shares the cost between sellers and buyers.

Paymate also offers the ability to transfer money via bank accounts, this is free between Australian accounts (if you use internet banking you can do this yourself and the money is transferred quicker).  The advantage is that you can receive money from overseas bank accounts but this costs the seller $9.90 and the web site gives no indication on how long the money takes to clear.

International money orders are very expensive and not that great, the advantage is that the buyer pays the $20 fee for the money order.

The last method is a Telegraphic transfer, in this way the buyer transfers the money into your bank account and they pay the $20 fee.

 Please don’t accept personal cheques from overseas buyers, you are charged up to $30 (depending on bank) and it can take up to 6 weeks to clear.

Ebay and scalping

By James Clifton

 The Ashes this year will be big news, and not just because of the cricket action on the field.  This year the news includes scalpers and in a big way as well.

 If you go through ebay listings for ‘Ashes tickets’ then you will see there are over one hundred listings (116 as I write this article).  Currently CA (Cricket Australia) is trying to get ebay to stop the resale of tickets while ebay has refused, stating the fact that it is not illegal.

Meanwhile the Australian Government has said that it may bring in laws to force sellers to display the identity numbers of the tickets while selling them; this is so CA can cancel the tickets if they wish (or any other promoter that sees their tickets being sold on the Internet).

Ebay has stated that they only facilitate a market place and cannot be held responsible for any items that are traded on their site.

So what does all this mean?  Ebay’s motto seems to be Caveat emptor, which is Latin for “let the buyer beware”.

For buyers this is a scary thought, you would think that if you bought a ‘Louis Vuitton’ handbag then that is what you will get, but the amount of fakes from Asia is astounding.

As a seller you need to overcome this obstacle.

 The ebay feedback system is the method that ebay claims stops dodgy sellers; but this can be easily manipulated by those with a good understanding of how it works.

The biggest problem with the feedback system is that you get feedback for both sales and purchases, so a person with a large feedback score may have never sold an item before.

Who benefits from all this?  Those with good customer service!  I’m not referring to those with a high feedback score; I’m talking about repeat customers.

If you believe that the Internet is a faceless marketplace that needs no personal touch then you will be missing a lot of sales; even though you can’t see your customer face-to-face there is still email with which to communicate with.

Treat your Internet customers well and they will return, just as in real life.

Learn from porn

By James Clifton

The Internet started for the general public in about 1994 (it had been around since the 1960’s but only for academics and military personnel).

When I started in 1996 I often compared my first five years on the Internet to the old Wild West of America; the more I think about this claim the more accurate I believe I am.

Since then the Internet has evolved into order with people having wised up to the tricks and pitfalls of being online.

In the old days people believed that running a store was easy and that the old rules of retail didn’t apply.  Most people believed that the store with the lowest price would ‘win’.

They were WRONG!

Stores simply wanted you to send them money and they would send the goods.  If you sent a seller an email to ask if the item had been sent yet then you were considered a nuisance! 

It took about 6 years (from personal experience) before things got better on the Internet and customer service improved.

And where did this ‘revolution’ start?  It started in an online industry that was making a $10 billion yearly profit.

And this industry is?  … Porn.

Love it or hate it Porn is the most profitable industry on the Internet, far outselling anything else.  In fact it makes more profit than Microsoft!

Pornography was profitable from day one, which caused a lot of competitors to appear; and there were a LOT of competitors.

The irony of this is that porn kept making huge profits while the industry experts claimed that nobody would ever make a profit on the Internet (that comment now ranks up there with the head of the US patent office claiming that man would never fly).

So all those that were not in the porn industry were not making money, but some wised up and realised that if porn could make money then why couldn’t they?  They proceeded to look at the porn industry in order to work out how it was making money; and came to the startling realisation that the porn industry was using ‘real world’ tactics to remain profitable.

The main lesson learnt was that ‘customers’ aren’t very profitable – it’s ‘repeat customers’ that make you the money!  You always encourage new customers but the old customers are the ones that are the most profitable.

So how do you turn a ‘customer’ into a ‘repeat customer’?  Simple - Customer service.

Customer service was really missing when the Internet started.

Companies realised that if they had a customer service department it raised the cost of business but it took them a while to realise that the increase in sales was worth it.

Morale to all this – treat your online customers the same way you treat your real customers.

Finding a bargain on ebay

This is an article I wrote for ebay and was put on the ebay site.

Found a bargain on ebay? It’s a nice feeling when you find what you want for a good price. Before you buy though there are a few things you should look out for.

I remember once I was searching for a Digital Video Camera and found one on ebay for $5.
Bargain of a lifetime I thought.
A lesson I learnt from experience though is to always read the fine print; and in this case it threw up a few surprises.

I’ve sold over 3,000 items on ebay so I know a bit about postage costs and I estimated that the item would cost about $12 via registered post or $9.70 express post. So you can imagine how shocked I was when the local postage cost was $80!!
So this camera is now $85 instead of the $5 I thought it was.

I kept reading though for any more unpleasant surprises – and found one more.
This item required insurance - $20!
When I insure my items I pay about $1.80 to $3 depending on the item. So where is this $20 coming from??
So now this camera costs $105, not what I expected!

So why the high postage costs? The item was supposed to be located in Sydney but in the fine print the item is coming from Asia, hence the high postage costs.

So, is the item worth $105? Reading the feedback for this item I would say no, nobody was happy with it for the price they paid.

But the description states that if someone is unhappy with the item they can return it for a 100% refund – so if buyers are unhappy they should simply return it shouldn’t they?
Read the description more carefully and you will see that a 100% refund only covers the BUYING price (Please note that this is in line with ebay’s policy). You don’t get a refund on the postage or the insurance, so you get a refund of $5 only. And to rub salt into the wound you need to pay the postage cost to send it back to Asia!!

So what are the Golden rules for looking for a bargain?
Read the fine print.
Check out the postage costs, are the items combined? Is there a postage cost?
Should you insure it? Remember that Australia Post delivers 98% of items quickly BUT the flip side is that 2% of items get held up and maybe lost.
Don’t assume anything!! Don’t assume postage will be combined unless it says so in the description, if there is no postage cost then don’t assume they will charge a reasonable cost (some people make their living on ebay by overcharging on postage).
Check the feedback of the person, this is critical to find out how honest they are and how happy buyers have been with their service.

Don’t get all paranoid after reading this article though, 99% of transactions are as honest as the day is long. Happy ebaying.



Copyright James Clifton 2007-2010