Latest eBay Sell Through Rates

[Mufasa]

I see the proverbial writing on the wall for home-based online sellers. We'lll go the same way that small family businesses and family farms have gone.

Sell-through rates of less than 40% won't generate a decent hobby business, much less a livable income, for most home-based online sellers.

The home-based online sellers I know lack the capital to commit to a larger facility or to hire the help necessary to do a high-volume business. The people I know also lack the capital to buy big-ticket inventory, and they don't happen to have desirable collectibles or classic cars just lying around the apartment or house. eBay sales are time-consuming, and it makes no sense to work very long hours when the results won't cover the bills. More sellers than buyers are joining eBay, resulting in large groups of small sellers selling to each other.

I plan to think long and deeply before investing additional money in hardware, software, inventory, or supplies because I think home-based, online businesses are just about played out.

[martha baerreis]

This is just my opinion.

I believe that the online market place no different from any other market places.

Sometimes there are more buyers and sometimes there are more sellers. It always costs time and dollars. Lots of both to get it going.

The fact is that selling anything anywhere is hard work. It ebbs and flows. When the economy is bad, lots of people start doing flea markets, craft shows, and online venues. If it was really easy, everyone would do it. But the fact is that we have to work hard acquiring inventory, merchandising it, communicating with our customer, and shipping or wrapping it up and sending it with them. Additionally, we have to do all the bookkeeping, housekeeping and all the other things around our business.

Maybe it was easy money on ebay in the 90's because it was new, but maybe it just looked easy.

Now we are in an extremely competitive environment. Some people will give it up, but the ones who stick it out will eventually find their niche, and make a go of it.

But it is never easy. At least not for me, anyway.

Martha Baerreis
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Baerreis Art Craft and Collectibles

[Mufasa]

Martha,

It isn't about "easy money" or a fast buck. It's about the viability of online sales as an income source for those who lack the capital necessary to ride out tough times or to expand into an increasingly competitive marketplace.

Congratulations on your success!

[martha baerreis]

Most people do not view what I do as a "success".

We have never had capital, but we just continue. Somehow, we always make it, though we drive old cars, live without ac, cook, and work basically 7 days a week, long hours.

Right now, we are doing a craft market one day a week, and working about 4 online venues, (and occasionally others); opening our studio/gallery 3 days a week full time, and doing "job shop" orders.

I think online is the future, but I think the effort is comparable to all the others. And we have to figure out ways to keep it going when there are no sales.

I agree with a lot of what you said, I just think it is extremely hard now, and requires the effort if we want to keep it going.

It is just what we do.
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Baerreis Art Craft and Collectibles

[classicn]

The proverbial writing on the wall says that those who don't adapt will be consumed.

Online business is strong and will continue to be so, but you have to learn how to make it work for you.

I make and sell my own products, so the profit margin is high, even with eBay's fees and Paypal's charges. I don't sell something that takes me 5 hours to make for $10, and since my products are static, I design one product and one ad and can relist it as long as the market will bear it.

I think some categories and markets are drying up, but it's up to the seller to find a new market. Years ago, you could browse your corner bookstore and pick up a $500 book for $100, then sell it on eBay. Now, the corner bookstore is eBayseller 'Cornerbookstore134'.

Keep changing. Don't let yourself fall into the mom and pop store mentality. My mom and pop hardware store went out of business because there's a Lowe's and a Home Depot within a few miles. At first I stayed at the mom and pop because they were convenient and friendly and could usually help answer my questions. Unfortunately, Home Depot has 40 people on shift at a time who can do the same thing. The mom and pop store never offered any added value, on top of their higher prices.

[woodkin]

You said it well. It is a hard fact that survival requires so very much effort while in business.

There are no guarantees...and the cosmos doesn't really care whether we survive or not.

Just be alert, aware, educate yourself about the marketplace, be willing to cut your losses and move on, be able to seperate your angst from the business, and be careful not to harm anyone. It never hurts to help your neighbor when you see a need.

Business is FUN! but one cannot take it too seriously, as it can eat you up! We have good days and bad days, but they all average out, and somehow, we survive.

We have been doing this for a living for a long time, and understand that the nature of being a small "mom & pop", craft or collectibles business will never make big bucks. In order to do that one has to go to a different level. We like where we are, would like it to be more stable, as we are gettin older, but all in all, we accept the consequences of our choices.

Good luck, and happy selling to all!

martha

[bladerunner6]

[HoldenRex]

I think the sell-through rate doesn't tell the whole story. I believe the current average sell-through rate is 40%, which is down from the 55% during the peak years circa 1999 (if memory serves). I think part of that can be attributed to the fact that many sellers can no longer trust the auction model to sell their products, and hedge their bets by starting their auctions at much higher prices than they used to. This results in a lower sell-thru rate, but may actually be enhancing their bottom line, as sellers exert more control by setting a minimum that they are willing to accept.

There is no longer a one-size-fits-all strategy that works. Some items I know are likely to get bid up to a certain level no matter where I start the bidding, so I save money by starting them low. But many, many items need to be launched at a more conservative price, or you're likely to be taken to the cleaners. You can start all your auctions at a penny and get a remarkably high sell-thru rate, but your bottom line will likely take a beating. With some items, it's better to "live to fight another day" than it is to just give them away.

Just another two-cents for the kitty,

John

[martha baerreis]

I believe the online selling world is rapidly transitioning to fixed price stores. I have been selling online since 1995, and on other than my web site since 1998. I gave stuff away at auction, (and still do on occasion) but for the last year and a half my energies have been focused on selling at fixed price through online stores. It is how I shop online... When I want to purchase supplies, food, gifts, vitamins, tools, I go online and I search, and then I buy. I am irritated if I have to spend a day driving and walking shops to do my shopping. But that is how I shop. I make the assumption that my customers are like me.

I think a sell through rate of 40% is very good, especially if you are talking about 3,7,10 day listings.

In the bricks and mortar world, sell through is considered in a MUCH longer time frame. And it is generally referred to as "turning the inventory". In most stores (gift, antique, jewelry etc) an inventory turn of 2 - 3 times a year is great! The average is about 1.5 times a year.

And the whole thing is in the frame of reference of a total inventory.

So putting one or 50 or 500 items up for auction, and expecting to turn them in 7 days is almost grandios (IMHO)

As a craftsman, in the most optimum selling venue and conditions (a high traffic, high volume art show) I have to have about 3 - 4 times the inventory I expect to sell. People always want a selection.

As a shop owner, I have to have a "mass" of inventory for the customer to choose from. They don't purchase the last one most of the time.

And as an online seller, I do not expect to sell 100% of my items. (I can, with a store, if I mark things on auction at 25% of my retail, but that is shooting myself in my foot, and means the buyer familiar with my items will wait until I say "uncle" again)

IMO, the bottom line remains that the success of online ventures is based on the same principles as the b & m world: Inventory, pricing, merchandising, customer service, value. Additionally, we base our expectations on averages, not on any given day!

JMHO
martha
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Baerreis Art Craft and Collectibles

[mbright1]

"If your item doesn't sell on eBay, with a global market and millions of eyes for that reserve price, then it's generally over-valued."

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That's simply not true, overvalued. eBay is like a store's display window, where the contents of what's on display is on a conveyor belt.

That store may be located in a community of millions, such as New York or Los Angeles, but there will only be a handfull of those citizens watching what goes past that display window at any given time. And of those folks who are looking, a certain percentage are just casual onlookers, etc.

Also because it is an auction, popular items will sometimes sell for more than what they're truly worth, and less popular items can take a real beating.

Both the offline and online world of auctions have their issues, but neither one can be compared to a regular storefront.

Value is in the eyes of the beholder, and at an auction, the hammer price is almost always not the price that the winner was willing to pay, but rather at or just above what the next person was willing to pay. And more than likely, at least one step down from its true potential.
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I have Flat Fingers... So what's your excuse?
Friends use the Back Door - eDale-Trading.com

[beckem]

I'm more concerned about the selling prices than the current sell-thru rate. 40% is easily workable if you are making a reasonable profit on the items that sell.

Looking at the prices for completed auctions, I would not consider more than half of them as real sells. I've seen the same thing at shows and flea markets where business slows and sellers start dumping at their cost, trying to recover some of the money they have invested in inventory.

Ebay is quickly reaching the point (if its not already there) where the constant listing of items at liquidation prices has destroyed the market.

[beckem]

>>>Value is in the eyes of the beholder, and at an auction, the hammer price is almost always not the price that the winner was willing to pay, but rather at or just above what the next person was willing to pay. And more than likely, at least one step down from its true potential.<<<

I wish more sellers would start listing items with this in mind. I don't believe sellers who routinely list $10 to $25 items at 99 cents realize how much this is costing them.

Example: I placed a bid of $25 on a huge lot of magazines listed on eBay and pretty much forgot about the auction assuming I would be out bid. The seller listed the mags with a minimum bid of 99 cents.
3 or 4 days later I received the congratulations email informing me that I had won the auction. Final Bid 99 cents. No one else bid.

This is a common mistake on eBay. I was willing to pay $25 for the lot. The problem with the sellers strategy is that when you list with a "cutesie" minimum of 99 cents, one bidder willing to pay $25 isn't enough. If you use the "99 cent strategy" you need TWO bidders who are willing to pay $25.00

[BURIED TREASURES]

When I list 100 auctions I consider a 12% sell through rate to be AWESOME. Most of the time it is closer to 6 or 7%. Some people would say "That is AWFUL" but they fail to realize is that my pricing model has built in the cost of the other 93% of items that do not sell so I am still making a profit, paying outrageous ebay fees and paying for the items.

The rules are simple, buy low, sell high. Nothing has changed. I just LOVE other dealers dirt cheap starting bid listings because I can really "clean up" as I snipe the auction and win for a fraction of what I was prepared to pay. Then I turn around and sell the item for significantly more which is what pays my expenses and allows me to make a profit which in turn keeps me in business.

Ours is NOT a fast paced business in regards to "turning" inventory. I consider an acceptable time frame of initial listing to sale (on a fixed price venue) to be the same as in a brick and mortar store. For me that is 5 years and online my average is probably closer to 18 months. Don't get me wrong, I still have some items online that I listed 5 years ago but I can assure you it is not much.

The internet is the most powerful selling tool on the planet. Ebay is one of those tools but because management is brain dead they are destroying their markets. I used to have ebay fees averaging $1,500 per month and ran 500 or so auctions per month. Those days are over for me now. The latest fee increase was the "straw that broke the camel's back". Now my ebay fees are closer to $500 per month and while my sales have backed off somewhat I can afford it because my fees are so much lower.

You can still get top dollar for your items (although you will have to wait longer to get it). The key is not "sell through rates" but is instead "return on investment". Anybody can give away valuable items dirt cheap. It takes planning and experience to get top dollar for an item instead. By getting top dollar a sellers profit is high enough to justify both the time spent on each ebay listing and the fees involved.

I am MUCH more selective in what I list on the ebay auction site now because the fees are so large. Because of it I have seen my sell through rate grow. The "common" stuff I just put in fixed price venues (including an ebay store) and I let it sit until it sells (which sooner or later it always does).

As long as there are sellers out there who want to give away their items I will be able to stay in business and grow my business and prosper at their expense. The smart dealers are instead looking at their bottom line instead of their sell through rates. These are the dealers I expect to still be in business 20 years from now. Sincerely, John Leckrone John@hopkinsvilleantiques.com
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http://www.stores.ebay.com/buriedtreasuressterlingsilver?refid=store

http://www.auctionbytes.com/forum/phpBB/viewforum.php?f=32

[cobaltlady]

Great post. My friend buys old toys from Ebay and puts them on his well ranked website and TRIPLES his money. As long as sellers "give away" their items on Ebay I will continue to use them to my advantage.

[JC]