This guide will help you decide whether or not you're ready and/or willing to put in the time and effort needed to have an eBay consignment store. Mine has been in business for over a year now, and hopefully, I can help you avoid some of the same mistakes that I made early on.
This guide came about in part due to a question I had seen over on the Blogs. I kept running out of room trying to answer the question fully, and thought this would be a better place for it.
There are many things you should take into consideration before jumping in and starting an eBay consignment store. Settle in, grab some coffee and read onward! Also, if you find this guide helpful, please vote below!
Do you have eBay selling experience?
Selling on eBay can happen on a variety of levels. Many thousands of people do just fine with basic knowledge available here on the site for free. Others have been self-taught on most of it. If you have not yet sold anything, I would recommend taking some small, easy to ship, not very valuable items from your home to 'practice' with. Get a feel for how it works. See how much time is involved with selecting the item, photographing it, cropping and sizing the photos, writing a good description, monitoring your listing(s), answering questions, waiting for payment and preparing and delivery your package for shipping.
Family and friends also make great first 'clients'. You can practice some of your expected techniques on them, without worrying about offending them.
If you're unsure of where to start, search for a local eBay Education Specialist. These eBay trained members will teach classes on how to begin selling on eBay; some also teach advanced selling. You can search for one here: Education Specialist Search.
Are you a Trading Assistant?
The Trading Assistant directory is a great way for people to search for you. There are some basic criteria for joining, but no fees to do so. Potential clients can search this directory to find someone to sell items for them. You can check it out here: Get Started as a Trading Assistant!
Do you have a Business Plan?
Even if you are looking at doing this from home, a business plan is an excellent way to sit down and lay out what you'd like to achieve. If you are looking at doing this professionally, a business plan will be required if you need to get any type of a loan for the business.
When I was ready to write my plan, I found a generic template on Microsoft's website. From their main page, click on Office (on the left), then Templates. You can do a search for 'business plan'. (No one plan they have will be perfect for you. They are just guides; feel free to add or delete as the information applies to you. They are just intended to be a platform for you to start with.) They also have many other very helpful templates that may come in handy in the future.
Do you want to do it part time, or would you like this to be a full time job?
If you just want this to be something you do here and there, some of this Guide will not pertain to you. Some still will, though, so please keep reading! If you are interested in making this your full time job, most everything will. This is a good question to start with, as it will greatly affect how you go forward from this point in your plan.
Do you want to do it from home or from a retail/warehouse building?
Having a retail/warehouse space for the business has the potential to be a great way to bring in customers, since they'll see your building. They'll feel a little more free to stop in with questions or just out of the blue. Keep in mind, though, that what seems like just a rent payment quickly escalates when you factor in all other costs. Also be sure to include your monthly eBay fees when factoring what you can afford. Full time sellers often have monthly eBay fees of $400-$1000, if not more.
Example: I had looked at having a 1500 sq. ft. warehouse space for the business. The rent was $1,000/month. By the time all other expenses were factored in (heat/air, electricity, phones, high-speed internet (dial-up will NOT work!), security system, and any taxes/maintenance/insurance fees from the landlord) the $1,000/month quickly became closer to $2,200/month.
If you have the space available (basement, room solely for the business, garage, outbuilding, etc), running the business from home can be an excellent way to save on costs. Also, depending on how your business is set up, you might be able claim your work space, as well as a portion of heat/cooling, internet, etc on your taxes. (Please see a tax professional for how this best applies to you, as I am not a tax professional; I pay one very well to handle that aspect for me!) You should also consult with your local city or township offices to determine if home bases businesses are OK where you live.
What sort of business hours do you want to have?
Obviously, as a retail business, you'll have to have business hours. These will have to encompass a time when people are out of work, so they are able to bring you the items you'll be selling. Being open 9 or 10 hours a day will most likely mean having to have employees, who then increase your costs, as you'll now have all sorts of extra taxes to pay.
If you choose to do this from home, it's also a good idea to have set hours. You can be a little more flexible though; if someone can't make it at a certain time, you can always have them come over a little later (assuming you'll be there, of course!). Some clients will think that because you work from home, you should be available whenever you're home. You may have to just switch on the answering machine at the end of the workday and let things wait until tomorrow. Most people, though, will understand that your day isn't whenever they want it to be.
Have you thought about your fee structure?
Selling things on consignment means that you get a portion of the sale price in exchange for doing the work of selling. Most people who sell on consignment charge between 25% and 45% of the sale price as their fee. Most will start out with a certain fee for items that sell under $500, then lower that as the sale price increases. You will find that the consignors that have the highest percentage fees are those who have a retail store and employees to pay for.
As a seller, you will be charged a fee from eBay just for listing your item (Listing Fee). You will also be charged a fee if your item sells (Final Value Fee). If the item does not sell, you are still responsible for the Listing Fee. For this reason, many consignors will, in addition to the percentage fee, also charge their clients $2-3 for each item listed to cover the Listing Fee and any other upgrades that are included (Gallery Photo, Bold, Extra Pictures, etc).
Have you thought about what to include in your contract?
As a full-time retail store, a part-time do-it-from-home or any level in between, it's a very good idea to have a contract that outlines what you expect from and will provide to the people who leave their items with you. Some possible topics include: how soon after receiving the item you will list it, when should the client expect payment, what happens if their item doesn't sell. You may also wish to include a clause releasing you from liability in case of fire/flood/etc.
Have both you and your client each sign two copies; one is for them and one is for you. Keep that in case of future problems. If you can work it so that they get a copy each time they drop off items, with those specific items listed on it, that's even better.
Do you have a minimum expected sale price you are willing to accept from clients?
When I first got started, I would take just about anything people asked me to sell, just to have something to be selling. A lot of that was items that were selling in the $2-10 range. While items at that price range do sell, it's often not enough to make a reasonable profit. As a consignor, you'll be custom writing most all of your auctions. This takes time, and time, of course, is money. Custom writing a bunch of auction for $2 items is not cost-productive.
Most consignment stores that I've seen have a $10 minimum expected sale price, though I've seen them at high as $50. Decide what works best for you (and the area you live in) and go from there.
How do you plan on tracking your inventory?
As more and more items come in, you'll need a way to keep track of what belongs to who and where it is in the selling process. (Has it been listed? Sold? Has the client been paid for it?) I've seen Excel spreadsheets that have been set up to handle this. A notebook would be a fine place to start too. I remember seeing customized notebooks in The eBay Shop for buying or selling. I believe it was called I Sell on eBay Binder.
If you want to get fancy and buy into a franchise, they will provide software to handle most everything, though this will increase your starting investment in your business by about $80,000. I got lucky with my tracking system - my husband write software as his day job, and he was able to write me something that works for my needs.
How do you plan on advertising?
Let's face it - if people don't know you exist, they won't be able to bring you stuff. Business cards, of course, are a great starting point (as a Trading Assistant, you'll have access to a template that you can use). Local papers are great for an ad. Put up flyers at local businesses. Most importantly, talk yourself up! Not everyone will take the bait right away, but they might mention you to someone else who will.
Do you have any accounting knowledge?
If you are selling full-time, expect to spend a full day each week keeping up with all of the myriad details involved with bookkeeping. From bill paying to client paying to shipping supplies purchase - all of this information must be kept up with. Trust me on this one: it's a whole lot easier to keep up with it from the start than it is to play catch up later!
Come the tax season, are you comfortable enough with handling the business taxes? Depending on how much you sell and how your business is set up, you'll have to either file business taxes or you may be able to claim it on your personal taxes. Again, this is something you should consult with a tax specialist for; my knowledge is limited to what my accountant has told me.
Are you the type of person that can run a business?
We all have those moments at work where we think we'd be a better boss than our boss is, right? Are you prepared to take all of that responsibility? Is your personality the type that can keep up with all the details the business will require of you? I'm normally a procrastinator - if it's a job that can be put off, I'll put it off. Over the last year, I've discovered that this is not acceptable in business, and had to undergo a drastic rethinking of how I normally work.
Having the business will require a great deal of your time. It doesn't care that you don't feel like working; there are questions to be answered from potential buyers, items that need to be shipped and 101 other details to see to. Having said that, it's also important that you don't let business consume all of your waking hours. It's a great thing to be able to set aside the business at a set time, and enjoy your family, life and everything else that isn't eBay.
Are you prepared to offer customer service to two sets of clients?
As a consignor, you'll be responsible for the happiness of two different set of people. You'll have the clients who bring you items and want you sell them for thousands of dollars. You'll need a way to respectfully re-align their expectations with what is much more realistic.
You'll also be responsible to the buyer who has bought things from you. They'll want an item better than described, shipped same day for little to no extra payment. Clearly state your shipping policies in your auctions and then stick with them. Be truthful in your listings. If there's a flaw, mention it. You'll need your buyers to be happy, as people will be much more likely to continue buying from you if your feedback is excellent.
-------------------
As a final few notes: be sure to check and see if you have any local competition. If your area is swamped with these stores, it may be more difficult to get a client base. Deliver what you promise to your customers. Most people are very understanding of a delay, as long as you communicate with them. And most of all: have fun! eBay is not a requirement for anyone! It's a place to meet new people, make some money and enjoy yourself!
Orignal From: Are you ready to start an eBay Consignment Store?
Keine Kommentare:
Kommentar veröffentlichen