Email provides an effective way for online retailers to encourage repeat sales, but eBay sellers and small merchants often overlook email marketing or may not know how to begin. Others may be wary of running afoul of eBay and Amazon.com's strict policies on customer contact.

The practice of email marketing is also fraught with peril due to anti-spam initiatives. List-hosting services and Internet Service Providers come down hard on companies accused of sending spam through their servers, whether or not the accusations are true. Unfortunately, recipients of email are sometimes too quick to click on the "report this email as spam" button, catching legitimate emails in the anti-spam net. Therefore, separating your email marketing from your Internet Service Provider and your web-hosting service is always a good idea. In other words, don't use your email client (such as Outlook) or your website servers to send mass-mailings to customers.

A benefit of using a list-host service instead of do-it-yourself campaigns is that reputable services are experienced in dealing with these issues. They require their customers to adhere to best practices, and they communicate with Internet Service Providers to get their companies "white-listed" to help get clients' emails through to their intended recipients.

The best policy with email marketing is to allow customers to "opt-in" to your list. Provide customers with the opportunity to sign-up for your mailings on your website and during the checkout process. You might also include a mention in your signature line in emails and on discussion-board posts.

If you are just getting started with email marketing, you may choose to email your past customers once and give them an opportunity to opt-in to your mailing list. If they don't choose to opt-in, then don't add them to your list. Some retailers choose to add past customer names to their lists and then allow them to "opt-out." This is more apt to bring accusations of spam from recipients, however.

Of course you need to provide every person on your list with the opportunity to easily unsubscribe from future mailings, and you'll notice that reputable list-hosting services have this built in to their services.

eBay and Amazon sellers will have to be especially careful about what names they import into their lists without prior permission from the customer. Here is a recent reminder Amazon sent its sellers:

"Amazon.com prohibits merchants/sellers from using customer information, such as a customer's e-mail or postal address, for any marketing or promotional purpose whatsoever."
http://www.amazonsellercommunity.com/forums/thread.jspa?threadID=143708

Jennifer Canty, founder and CEO of Dyscern (http://www.dyscern.com/content/view/55/54), recently began gearing up her email marketing efforts. She said that when she attended the Internet Retailer conference in June, everyone was touting the benefits of email marketing.

Jennifer founded Dyscern in 2002 selling MP3 players and PDAs on eBay from her basement. Now Dyscern operates out of a state-of-the-art facility in Virginia and processes several thousand handheld computers and MP3 players per month. She said she had first started giving customers the chance to opt-in to mailings beginning in October 2006, and said she would not feel comfortable mailing to customers who hadn't asked to be on her mailing list.

Canty said she did not have the resources to begin an email marketing campaign until she hired a full-time vice president of marketing earlier this year. "Without having someone to really focus on it, I don't see how you are going to be successful, because it's really critical what you're communicating to your customers," Canty said.

Complicating matters for email marketers in the US is the CAN-SPAM Act. The FTC website outlines the requirements you must follow according to the law, which became effective January 1, 2004 (http://www.ftc.gov/bcp/conline/pubs/buspubs/canspam.shtm). For instance, did you know you must include your valid physical postal address in each mailing?

Once you decide to begin building a list, you'll need to find a service to help you send your mailings. Email list-hosting services generally charge either a flat monthly fee based on the number of names on the list, or by the total number of emails sent during the month. In July, AuctionBytes wrote about how to select an email list-hosting service (http://www.auctionbytes.com/cab/abu/y207/m07/abu0195/s02).

Consider checking vendors to see if they have forums where users discuss issues and share tips, they can be a great resource in evaluating a service and in getting support once you've begun using them. Also check to see if the service provides reports on open and click-through rates.

If you have your past customer data in your email client, you can usually export them to a CSV file and import that into the database of your list-hosting service. For example, in Outlook Express, you can go to File>Export>Address Book and export the names into a CSV (comma separated value) text file and then clean up the list. Then take your CSV text file and upload it to the list-hosting service.

Here are some examples of services that have pricing plans appropriate for small businesses.

Topica
http://www.topica.com
Topica has been around for many years and always offered a free solution as long as you didn't mind having advertisements appear in your emails.

Vertical Response
http://www.verticalresponse.com
Pricing is based upon the number of emails that you send. You can either "pay as you go" on a per campaign basis or you can "buy in bulk" and subtract from a total amount of credits as you mail. There are no contracts, startup costs, monthly fees or hosting fees. If you send 1,000 emails, it costs .015/email, or $15 per thousand; pricing decreases with volume.

Constant Contact
http://www.constantcontact.com
Constant Contact charges a monthly fee based on your email list size and there's no per-mailing charges. A list of 500 names costs $15/month, a list of up to 2,500 names costs $30/month. You can create an unlimited number of email campaigns for lists with fewer than 50,000 names.

eBay Stores Mailing List
A "basic" eBay Store allows you to send out a total of 5,000 emails/month for free, and $0.01 per email over that amount. Buyers can sign up to receive your email newsletters when they add you to their Favorite Sellers list or if they click the "Sign Up to Store Newsletter" link. eBay has a tutorial on how to get started. The email marketing program qualifies for eBay's Store Referral Credit program, be sure you understand how this works (http://pages.ebay.com/stores/email-marketing/tutorial).
http://pages.ebay.com/help/specialtysites/email-marketing.html

Note that eBay is hosting a workshop on Tuesday (November 20, 2007) with Lisa Suttora, founder and CEO of WhatDoISell.com and author of "What to Sell on eBay and Where to Get It" (McGraw-Hill), who will discuss "how to use Email Relationship Marketing to engage your customers, foster buyer loyalty, and grow your business to new heights" (http://forums.ebay.com/db2/thread.jspa?threadID=1000589439).

My Store Rewards
My Store Rewards was created for eBay sellers as a way to build a list of opt-in customers to whom sellers could encourage repeat business through mailings advertising discounts for repeat sales. The service expanded and now integrates with CRE Loaded, osCommerce, Zen Cart and with PayPal. Once the service gets your buyer's opt-in permission, it sends them regular marketing emails. It charges sellers a one-time fee equal to 1% of the buyer's purchase total (excluding taxes), capped at $1. See website for further details.
http://mystorerewards.com

Share your own experiences with email marketing on the AuctionBytes blog:
http://blog.auctionbytes.com/cgi-bin/blog/blog.pl?/pl/2007/7/1185066885.html

And visit the AuctionBytes website for a list of email list-hosting services pricing and links to their information pages (be sure to tell them you saw them in AuctionBytes):
http://auctionbytes.com/cgi-bin/charts/chart.pl?Email_List_Hosting_Services