Five ways to get started on Amazon and eBay marketplaces

If you already run your own ecommerce site, then it’s worth thinking about adding the marketplaces on eBay and Amazon as extra channels. However, it’s not all plain sailing, so here are five points to bear in mind.

By Chris Barling, founder & chairman of ecommerce software specialist SellerDeck

Think like a franchisee

Selling on Amazon or eBay is like taking on a franchise. They provide a lot of support, but you have to play by their rules (which are strict), with the franchiser taking a big share of the spoils. These marketplaces can let you both build and expand your businesses, but make sure you own the long term value.

Market your own site

The danger with marketplaces is that you build their business more than your own. It may be a good idea to think of the marketplaces a little like advertising, you are promoting your products and service for a price, generally the listing or commission fee.

Maximise the opportunity by including a flyer for your own website, possibly with a discount for coming direct. The fact that some marketplaces don’t allow this demonstrates how useful it is.

Understand marketplace pricing

The fact that it is so easy to start up is a double-edged sword. eBay and Amazon help to level the playing field with the big boys, which is good.

Against this is that they encourage swathes of naive traders. A lot of these are new to business and think they should compete by having low prices. They don’t last long as they lose money for a while and then drop out. Unfortunately, they are then replaced by more of the same. In the meantime they devastate everyone’s margins.

Do the maths?

To get your pricing right you first need to fully understand your own costs, so do the maths to find your margins. You cannot scrimp on things like delivery, as poor feedback will destroy your business.

Look at the same or similar products to your own and track the high and low prices over time. Keep this in a spreadsheet so you have a quick reference when setting your prices. Remember that ‘loss leaders’ are simply likely to be loss makers when most people are looking for only one item.

The only excuse to sell at low prices is to do so for a limited period in order to build up substantial positive feedback before moving to realistic prices. It’s best to either have a unique product or price

somewhat above the lowest. Never chase prices to the bottom.

Get your service right for positive feedback

Good service is impossible to over-emphasise. Unfortunately it’s all about huge attention to detail and hard work.

Customers rate you, and even when you are perfect, some individuals will still give you poor marks. If you get many low ratings your sales will be low, and below a certain threshold you will be thrown off the platform. So respond as quickly as you can to incoming orders and queries.

Good packing materials are a must as nothing destroys your reputation more than the delivery of damaged goods where everyone loses.

If you are responsible for fulfilment, pick a carrier you can trust to provide speed, certainty and quality. You will find some carriers sometimes claim to have left a card at a customer’s premises but haven’t even been there, others toss things into gardens as a form of delivery when they are in a hurry. Ask on for other merchants’ experiences on forums.

The appearance of the driver and the van, the persistence in trying to get the door answered, and their collection of a proof of delivery or leaving a card all make a massive impression. So watch them like a hawk. Offering customers a no questions refund for a reasonable period is well worth the cost as it minimises time and morale-sapping disputes and negative feedback.

Marketplaces have many upsides but you need to understand how they work and how you can make them work for your business. It’s not hard to find stories of merchants who have been cut off in their prime if you search online. That’s why we strongly advise businesses never solely rely on one marketplace.

Useful sources include:

eBay’s community forums at www.community.ebay.co.uk
Amazon seller forums at www.amazonsellercommunity.com/forums
Tamebay www.tamebay.com

For more information visit www.SellerDeck.co.uk