Small-Town Fundraisers Learn Lessons in Selling on eBay
By Greg Holden
Everyone wants to make a profit selling on eBay. But can organizations that are defined as not-for-profit successfully raise money by holding online auctions?
For the citizens of Atkinson, Nebraska, the answer is a resounding yes. In August and September 2004, volunteers raised more than $12,000 to benefit a variety of causes around town (pop. 1,244). The money went toward the Atkinson Community Foundation, which is helping to fund a local school, a senior center, a new library, and other improvement projects.
But organizers admit they could have cut the $3,000 they incurred in eBay fees and other expenses through better planning and simply avoiding pitfalls that now seem obvious.
"The first time we listed our sales we quickly realized we did not have enough manpower," says Patti Sklrda, a secretary and volunteer who helped with everything from digital photography to packing items like an automobile fender. "The second time, we did a lot better." The "second time" came after eBay ended many sales due to listing and bidding mistakes.
Atkinson didn't hire a Trading Assistant to help the fundraisers prepare descriptions and manage sales. From the outset, the townspeople decided to run the sale themselves. A coordinator was appointed, a storage space for donations located, and local high school students were recruited to help with packing and shipping. As many as 10 percent of the town's population took part. Ninety-year-old grandparents served food for the volunteers, and elementary school students posted flyers around town. Although the group's efforts met with success, they ran into a few pitfalls they urge other nonprofits to avoid:
eBay Insertion Fees
Because they initially planned to begin 1,000 sales at once and wanted to minimize insertion fees, all items were listed with starting prices of 99 cents each and no reserve. This meant that some high-value items (for instance, a Nordic Track exercise machine) that attracted a single bid only sold for 99 cents. Selectively setting higher starting prices and adding a modest handling fee would have improved profits.
Sklrda and her coworkers were surprised when they received 400 email inquiries after their first batch of sales went online. The number of questions could have been reduced by adding more details to the original descriptions, she says.
The volunteers didn't always specify shipping charges in the sales descriptions, and didn't make use of eBay's Shipping Calculator, which enables buyers to calculate shipping themselves. This led to disputes over whether shipping was "free" or not. On occasions where a shipping fee was specified, the volunteers failed to take into account the weight of boxes and shredded paper. In some of those cases, items had to be sold at a loss because volunteers felt they could not overcharge for shipping.
The volunteers who took the photos weren't always the same ones who responded to questions from potential bidders. Responders were forced to walk to the group's storage facility to inspect items in detail in order to provide answers. Next time, they say, more photos will be provided to those who handle email, and each photo will be labeled with the eBay item number so answers can be provided quickly.
Appearance of Shill Bidding
The most serious problem, though, resulted from having many volunteers working on the project. Many volunteers using a variety of computers posted sales descriptions, including some in the high school computer lab that could be accessed by many people. In many cases, buyers unwittingly used the same computers that posted items to place bids on those sales. To eBay, this looked like shill bidding; as many as 100 sales were pulled by the auction site and had to be relisted.
The event had plenty of successes as well, thanks to the number of vintage collectibles that townspeople pulled from their homes. A vintage Remington shell box case that was expected to bring no more than $10 attracted a high bid of $300. "There was a U.S. cavalry bridle bit, and I thought, "that old thing, it'll bring $25." It brought $175."
The Atkinson volunteers are discussing whether to hold a second fundraiser this summer. If they do, they'll only list 100 or so items at a time to reduce the number of potential inquiries they receive; rather than starting 1,000 sales at once. They'll also estimate shipping costs carefully, and find more helping hands for packing and transportation.
For now, Patti Sklrda is taking a break from online auctions. She hasn't sold on eBay since the fall of 2004. "I do not want to sell another thing!" she says.
About the author:
Greg Holden is EcommerceBytes Contributing Editor. He is a journalist and the author of many books, including "Starting an Online Business For Dummies," "Go Google: 20 Ways to Reach More Customers and Build Revenue with Google Business Tools," and several books about eBay, including "How to Do Everything with Your eBay Business," second edition, and "Secrets of the eBay Millionaires," both published by Osborne-McGraw Hill. Find out more on Greg's website, which includes his blog, a list of his books, and his fiction and biographical writing.
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