Subscribe    RSS Feeds    Twitter            Contact Us 
Web Site  
728_header.jpg (23748 bytes)
 Home   EB Blog   AB Blog   Letters   Podcasts   ABTV   Forums   EPIS   PR Service   Classifieds   Ecommerce EKG   Service Ratings   
Service Ratings 
   Auction Sites
   FP Marketplaces
   Inventory Management
   Payment Services
   Storefronts & Carts
   Sniping Services
   Wholesale/Dropshipping
   Email List Hosting
   Consignment Services
   Ecommerce EKG 
   Auction Calendar
   Collectors' Links
   eBay Promo History
   Bookshelf
   Fraud Resources
   Drop-Off Store Laws
   ABTV
   Ecommerce Resources
   Photo Tips
   Marketing Inserts
   Yellow Pages
   Advertising

EcommerceBytes-Update, Number 15 - June 03, 2000 - ISSN 1528-6703     Previous | | Next

Commission - Impossible? Brokering Items for Profit

By David Steiner
EcommerceBytes.com

June 04, 2000
 



If you've been selling online for any length of time, you've undoubtedly had a friend, family member or colleague say, "Hey, I have this (fill in the blank) that might be valuable. How about selling it for me on eBay?"

This immediately causes the little man in my head to whip out his calculator and lecture me, "Let's see, this is going to cost me a $2 listing fee and an eBay commission. Then I have to go and get the item, take a picture of it, make sure it works properly, describe it, post the auction, communicate with a buyer, pack and ship it...all for the 5-10% commission my friend thinks is appropriate?" Hmmm...

Usually, I put the brakes on the conversation right there. I patiently explain that I don't really broker items, but that I would be glad to help them navigate the online auction site of their choice so that they can sell the item themselves.

OK, call this avoidance. Also, the little man in my head doesn't like to be bothered a lot.

However, if you're a little more motivated than the two of us, and you've learned to sell successfully on any of the multitude of online auction services, then you have developed a marketable skill...a skill that can make you money by offering this service to others. It seems pretty straightforward, but along with brokering items for people comes a whole new set of logistical problems.

Factor #1: Setting a price for the brokered item
It's not as simple as selling your own item. You now have to make sure your client is satisfied with the selling price.

According to LizArtz99@aol.com, who sells over 90% of her items for other people, "The main and foremost difficulty is that the client always assumes their items will bring the kind of price they think it will, and it's normally a much higher amount than is realistic. It's hard to make people understand that their items are not going to bring them new wealth."

Ljoh774019@aol.com has a minimum selling price of $19.95 for her brokered items and says, "Be comfortable communicating with the person you are listing for. Be upfront with expectations of what the item will bring at auction."

A good idea is to do a completed auction search of the item and let clients see what they might expect to get for theirs. Explain that there are a lot of variables when it comes to getting a top price. Picture quality, timing (some items sell better at different times of the year) and competition (you may list your item and find that 5 others go up at the same time) are a few.

Factor #2: Listing the item
Most sellers I spoke with were insistent on having the item on premises so that they could inspect it themselves. Never take someone's word about the item's condition. Once you're satisfied with the condition of the item, research it carefully and write the auction description. It's a good idea to send the description to the client to look it over before you actually post the auction. They may be able to add some good information. But remember, they asked for your auction expertise, so if they balk at something in your description, explain why you did it, but don't change it if you feel strongly about it.

Factor #3: Communicating with the Buyer after the Auction Ends
This is tricky if you don't have the item at your site. Otherwise, you handle it like any other auction. If the item is still at your client's home or business, and they are shipping it, then you have to coordinate between the buyer and your client. Take pains to ensure that payment is made in a timely manner, and that shipping is expedited as well. You're not really an advocate for either party. Consider yourself like an air traffic controller, trying to safely land two planes simultaneously. You are trying to mediate the best possible transaction for everyone involved.

Factor #4: How do I handle refunds?
You know them, you hate them, but you handle them the same way you would for your own auctions. Make sure your client is aware up front that there's a possibility that a buyer might return an item.

"If the person I am dealing with refuses to offer a refund then I will not sell for them," says Judy F., who at various times lists about 50% of her auctions for other people. "This is where it gets a bit risky, as it is YOUR feedback that can be affected."

Also be prepared to pay for your own mistakes. If items get broken or lost while in your possession, it's your responsibility to reimburse the client.

Factor #5: How much commission do I charge for handling the sale?
The sellers who I spoke to charged clients between 10% and 35% for their services. Judy F. has her formula all worked out. "Depending on who I am selling for I charge between 25-30%. Also, I expect the listing fees right at the start and the selling fees right at the end. These fees are NOT included in my commission as I am charged these fees right at the start and end of the transaction."

LizArtz99@aol.com charges a flat third plus listing and final value fees, but other sellers find 10% satisfactory and some even use the barter system with their clients. Whether it's 10% or 35%, make it worth your while. You are taking responsibility for the entire transaction and your time is valuable. It's also YOUR feedback that's on the line. If you feel that you're not being paid enough, you won't put your best effort forward, and you will be shortchanging your client.

These are just a few of the things to be aware of if you're selling for other people. One last tip - if you don't know your client well, consider using a private auction, where names of the bidders are not made public. This can avoid a rather nasty situation where the client may try to circumvent you in the deal. According to Nancy, seller 007 on eBay, "I have had consignees skate the deal right under me by contacting the high bid through another source after the auction was over."

The benefit of brokering is that you'll probably never lack items to put up for auction again! In fact, you probably won't be able to keep up! The drawback is that you've made the already involved auction process even more complicated by adding another person to the mix.

One common piece of advice from all of the sellers was to set the terms of your agreement with the client UP FRONT. Get it in writing, if necessary - commission structure, refund policy, etc. - all the points that your client should understand before going forward.

Says LizArts99@aol.com, "Even if you're the best of friends. Make sure you cover all the bases. That way, there will never be any misunderstandings. Otherwise, it won't be worth your time, and you are the one doing all the work."

I can hear the little man in my head taking out his calculator again.

About the author:

David Steiner is President of Steiner Associates LLC, publisher of AuctionBytes.com and the EveryPlaceISell.com merchant directory. David, a former television producer, handles business development and advertising for AuctionBytes. You can reach him at dsteiner@auctionbytes.com


You may quote up to 50 words of any article on the condition that you attribute the article to EcommerceBytes.com and either link to the original article or to www.EcommerceBytes.com.
All other use is prohibited.

Email Newsletter icon, E-mail Newsletter icon, Email List icon, 
E-mail List icon Sign up for our Email Newsletters

Email this story to a friend.

Previous | | Next



 EcommerceBytes Blog 
 AuctionBytes Blog 
 Letters to the Editor 
Related Stories 
Related Stories
  • Getting the Most out of an Estate - December 18, 1999, Issue #4
  • Commission - Impossible? Brokering Items for Profit - June 04, 2000, Issue #15
  • Second Hand Rose - July 15, 2000, Issue #18
  • Online Auction Consignment for 'Offline' Owners - October 21, 2000, Issue #24
  • myEZsale Consignment Service - November 04, 2000, Issue #25
  • Letter from Reader - December 02, 2000, Issue #27
  • Avid Collector Turns Into 'Mystery Seller' - May 19, 2001, Issue #38
  • Mining Inventory - June 30, 2001, Issue #41
  • eBay Creates Directory of Brokers - February 15, 2002, Issue #259
  • Online Auction Management Tools: Help with Consignment Sales - November 17, 2002, Issue #83


  • AuctionBytes-Update Archives 
    You can read past newsletters going back to 1999 - click on a year and you'll be taken to all 24 issues from that year, which you can read in full-text!

      AuctionBytes-Update - 2010
      AuctionBytes-Update - 2009
      AuctionBytes-Update - 2008
      AuctionBytes-Update - 2007
      AuctionBytes-Update - 2006
      AuctionBytes-Update - 2005
      AuctionBytes-Update - 2004
      AuctionBytes-Update - 2003
      AuctionBytes-Update - 2002
      AuctionBytes-Update - 2001
      AuctionBytes-Update - 2000
      AuctionBytes-Update - 1999

     

    About Us      Privacy Policy      Link to Us      Partners      Our Writers      Write for Us      Press        Site Index

    Copyright 1999-. Steiner Associates LLC. All rights reserved.