INTERNET commerce entrepreneurs Amanda and Matt Clarkson (pictured) caught up with Brisbane Business News to share how their online store went from bust to boom.
How did you manage to avoid financial collapse?
Our former Sovereign Business established in 2006 was destroyed during the 2011 Queensland floods. We lost $80,000 in stock that was uninsured and could not recover from the loss as it was not financially viable to rebuild that particular business.
We wanted to rebuild from this setback and decided to start a new eBay store from scratch. The business was launched from a standing-start in November 2011 under a completely different category.
We applied our strategies and systems to create another successful and profitable business, turning over $38,000 a month and target FY12 revenue of more than $400,000.
Did you simply copy the former business model?
About 95 per cent of sellers just copy what other people do, but if you want to make an amazing income and have a home business you need to be educated about what you are doing.
Do not invest money in stock until you know with some certainty it will sell. We use simple formulas to decide if there are enough pieces of pie to stake a claim in before spending money on goods such as extension cords or plug accessories.
We look at the market and how many sellers we will be up against, comparing apples with apples and branded with unbranded as well as the cost of sourcing products and exactly how much profit can be made each day.
What opportunities exist for entrepreneurs?
There is money to be made in about two-thirds of the total 50,000 categories on eBay, including sub and main categories.
There are still hundreds of untapped markets. Most people want to make $500-1000 a week and there is enough money to make on the internet. Some people we teach at our separate Bidding Buzz internet education business are making millions of dollars in net profit each year.
What is a common mistake made by inexperienced sellers?
Spelling errors can make it hard for people to find goods, since a title has to use relevant keywords so buyers can find them in the search results.
In the early days we sold internet marketing CDs and left the letter ‘r’ out of the word ‘internet’. We found if the title was spelt incorrectly people would not find them easily.
However, there are also exceptions as we still sold the item and made a return of $130. Maybe buyers found us through the categories but this is rare.
How should sellers communicate with their customers?
Communicate openly and respond to customers quickly when they have queries and questions. Understanding how annoying it can be if customers do not receive a timely response, I am on eBay all day and can answer questions within 10 minutes and make the sale.
I am often asked silly questions from people who do not think before writing or know at all what they are doing. I always respond in a professional and friendly manner because these people just want attention.
You can set up automatic answers to general questions about postage and packaging. It is possible to automate 90 per cent of the business so the user only needs to spend about two hours a day.
Do you prefer buy it now, discounting or auctions?
I choose a mix of auction, buy it now and best offer according to our exact formula for understanding which listing method can make money.
Discounting is commonplace among people who do not know what they are doing or how to add value. It often leads to price wars, which I do not agree with it as they are not the only ways to make a sale. Nobody wins a price war at the end of the day.
What recent changes should sellers be aware of?
Previously sellers were able to buy their way into top rankings, but this can no longer happen.
The new changes mean that sellers who know their game and have highly positive feedback will be featured at the top, while unprofessional sellers will be knocked out of the game.
How should businesses respond to the online sales boom?
Retail has really suffered and increasingly taken their products online and to mobile platforms.
This trend will continue as the top 2000 eBay sellers in Australia grew profits by 38 per cent in 2010 and more than 45 per cent in 2011, creating 157 millionaires that turn over more than $1 million a year. More retail stores will be compelled to go online.
For your chance to win a copy email [email protected] with ‘Making Money’ as the subject.
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