When I started writing about eBay and online auctions, it was common for small-scale individual sellers to have a full-time eBay business supplemented by website and online storefront sales. Now, things have flipped around. Websites and multiple storefronts are the centerpiece of most small online businesses. Auctions can supplement website sales and drive more customers to your fixed-price sales catalogs.
For Astrid Boyce, an auction site called Tophatter performs a variety of functions that boost sales for her Etsy storefront, Astrid Boyce Beads, where she sells beads, lampwork and jewelry supplies.
"I use Tophatter daily," says Boyce, who can be found at Tophatter.com/saints. "I co-host a community auction called Saints Beads n More Monday through Friday. I am part of a group of sellers who work as a unit to support each other and promote our auctions and sales. My clients on Tophatter receive my business card with their purchases and they know that if they want more of a particular item they can always contact me through Etsy as well as through Tophatter. Tophatter also offers me the opportunity to do promotions such as free shipping or sales for my Etsy store when I send out products."
With each of her Tophatter auction listings, Susan Berry includes the following note: "Can't wait for the auction? Find more at Oshun Spirit Earth Friendly Goods! Visit www.oshunspirit.net, enter code TOPHAT10 at checkout and take 10% off products and services, with discounted combined shipping automatically applied."
Tophatter, for its part, distinguishes itself from other auction and sales venues such as eBay by the fact that it offers live auctions. Based in Palo Alto, CA, it was founded by Ashvin Kumar and Chris Estreich and launched in January 2012. More than a million users have signed up in its first year.
"We decided to build a platform that was fun and entertaining, and would keep buyers coming back," says Tophatter's Chief Operating Officer Andrew Blachman. "We've focused first on live auctions, because auctions are exciting, and the experience of being in a live auction room with 200 other people with paddles flying is thrilling. You don't get that kind of rush from buying on eBay or Amazon today."
Tophatter encourages its sellers to link to their online stores or sales listings anywhere online, he adds. "Buyers can discover interesting items and sellers in our featured auctions, and we have no issue with them buying direct from those sellers off of Tophatter. That's part of what makes us unique - for sellers, we're a great marketing vehicle to get exposure to a new audience."
An estimated 90 percent of all items posted on Tophatter actually sell, says Blachman. Still, the most successful Tophatter sellers use the site as a marketing platform, he adds. In part, that's due to the uncertainty of the auction format. You can't tell if you'll get the profit you want from the high bid. One Tophatter seller examined this issue on her blog.
To prevent losing money on an item, Blachman recommends including good photos and setting a comfortable minimum bid. The site charges listing fees of up to $2.75, and sales commissions range from 5 to 13 percent.
Astrid Boyce says she gets an adequate profit from her Tophatter sales. "There are different ways of making a profit. If you can increase traffic then you can keep prices low on individual items. While I sell some of my items (such as my euro beads) for more money at Etsy, my standard lampwork beads have the same price at both venues. The volume of beads I sell at Tophatter allows me to keep my prices where they are. I am in a unique situation. Being an artisan I can do exact math on materials, time, and output."
But Susan Berry acknowledges that it can be tough to make a profit on Tophatter auctions. "I see Tophatter as an ad venue that sometimes pays me to use it,'" she says. "Once upon a time I saw it as a profitable marketplace, but those days went the way of pay-per-play and seller-status quotas. It's tough to take it seriously as a consistent selling venue; it's very time consuming for benefits gained." She hired an assistant at $10 per hour to manage it as "an advertising cost."
Jewelry, fashion, craft supplies, beauty and accessories that appeal to women tend to do well on Tophatter, according to Blachman. "Our audience has been mostly women, so our major categories tend to reflect that, though we're now seeing increasing numbers of men on the site, and categories like electronics and collectibles are growing strongly." Most items sell in the $20-$50 range, though a ring once fetched $2,000.
But immediate sales aren't the only benefit to using Tophatter. Astrid Boyce says it's a great way to get new customers and to provide them with high-quality customer service, which she says is in short supply.
For Susan Berry, "The ONLY benefits are long-term... name recognition, product awareness, and for mining customers to my website."
Tophatter's Blachman sees the site as a "valuable proposition for sellers who may have trouble getting their Etsy shop or website noticed. On top of that, you get exposure to a room full of buyers who can connect with you. On Tophatter, sellers can reach hundreds of users in a real time environment, while making a profit on the sale of their item. Sellers shouldn't expect to sell in high volume, but they should expect great exposure when they're on the auction block."
You can find Tophatter FAQs on Help.Tophatter.com.