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Online Selling Trends 2014: Rising Cost of Shipping Presents Challenge

Each January we ask a panel of industry experts to participate in our “Online Selling Trends” series, asking them about the challenges and opportunities they see for online sellers in the New Year. This year, we also talk directly to some sellers for their perspective. For this, we turned to some regular posters on the EcommerceBytes Blog.

Today we kick off Online Selling Trends 2014 with a home-based business seller who lists computer parts and upgrades on eBay, Bonanza and eCrater. Not surprisingly, the rising cost of shipping is a major challenge for this seller.

In addition, not only is the seller, Ric, impacted by where he sells as a marketplace seller, he also faces changing technology that will have an impact on what he sells. His biggest challenge in the coming years may be finding another product line.

EcommerceBytes: What is your EcommerceBytes Blog handle?


EcommerceBytes: Describe your business in general terms (what you sell, where you sell/have sold and how big your business is)

Ric: We sell computer parts and upgrades on eBay, Bonanza and eCrater. We are a small seller operation working out of a home office with zero employees. We project our combined net sales in 2014 will be about $35,000 – $40,000. 95 % of our sales originate on eBay despite offering lower pricing on Bonanza and eCrater.

Our experience is that our items sell on eBay because buyers consider eBay to have the broadest selection of part selection in our category so they do not look at smaller venues to shop.

EcommerceBytes: What are the biggest challenges facing you going into the New Year?

Ric: 1) The perpetually changing seller environment on eBay is the most serious roadblock we face. Selling on eBay is the equivalent of building a foundation on a bed of quicksand.

2) Annual increases in shipping costs destabilizes pricing as larger sellers can afford to absorb increases. Smaller sellers can not absorb increases as well unless they are willing to sacrifice their margins.

EcommerceBytes: Name one or two things that would make your life easier when it comes to your business.

Ric: eBay is our largest volume marketplace. Our business would be greatly improved if eBay were to install management that was focused on helping sellers genuinely increase sales and focus on Main Street instead of imposing constant changes intended to impress Wall Street.

EcommerceBytes: What’s your most effective marketing tactic?

Ric: Instead of lowest possible pricing, we inflate our retail prices and utilize markdowns to bring pricing into the mid range. Buyers seemingly can not resist a bargain, so the $30.00 item marked down to $22.00 will still sell even though the same item is available from others for $19.00.

For many items we sell, we offer bundles. For example, our sound cards are bundled with audio cables and a CD with drivers and user manuals. We sell keyboards bundled with a mouse and so on. This enables us to set pricing above market average with very little additional cost.

EcommerceBytes: Free shipping or no free shipping?

Ric: We include shipping in the selling price of our items. We avoid the use of the term free shipping at all costs.

We do not sell internationally and have no intention to offer items for sale outside the US.

EcommerceBytes: What’s one thing online sellers may not know but should?

Ric: Sellers can not and should not rely on marketplaces such as eBay to establish realistic buyer expectations. Sellers need to be more proactive in setting buyer expectations. Marketplaces such as eBay establish buyer expectations based on best case scenarios and encourage buyers to blame sellers when those expectations are not met. We have found that direct communication with every buyer to establish realistic expectations results in a positive outcome.

EcommerceBytes: Will you be selling online 5 years from now?

Ric: Unlikely. The technology of our niche is changing rapidly. Computers are becoming like Timex watches – you do not fix them when they stop working, you throw them away and purchase a new one. The age of the desktop is fading quickly, as such much of what we sell will be considered legacy in the next few years as. As computing moves more toward small portable devices, the need for accessories, cables and parts declines and shrinks our market.

If we are to be still selling in 5 years, we will need to find a new category to specialize in.

Stay tuned as we hear from additional sellers and industry players in the days ahead as part of EcommerceBytes 2014 Online Selling Trends. Our thanks to participants for taking the time to share their perspective.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.