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Welcome to The Auction Spider PowerSellers Newsletter Archive.

Rather than re-post the numerous emails/newsletters that I have already sent out, what I thought I would do is start the archive from "scratch" and post the Newsletters here as and when.

The website is getting a new makeover and we're already hard at work on the "NEW" Auction Spider search engine which will be offering a whole range of new features including statistics and charts you can use with your Hot Item searches.

Also because email filters tend to eat anything and everything these days, I'll post the Newsletters here on the website which makes it easier for all involved.

What I'd like to chat about today is a situation that recently happened to me on eBay and if you are not careful, can quite literally put you out of business overnight, but I'll also show you how to get out of the situation and turn it to your advantage!

Market dominance and Product Saturation.

If you want to effectively PowerSell on eBay and start pulling in the big bucks, there are 2 things you need to understand:

1. eBay is a competitive battlefield and the shrewd/clever seller gets the sales.

2. You need to achieve market dominance for the items you sell - or at least be in the top 5 sellers for those items!

You need to get smart and at times pretty ruthless regarding your competition - it only goes to say, that the top sellers in your chosen areas are watching you closely and when you start becoming a threat to their sales, they will react accordingly to keep you in check.

Lost sales = Lost profit!

Also you need to remember that eBay is a very fluid marketplace and the top selling items today may not even be looked at next week!

Successful PowerSellers are PROACTIVE and not REACTIVE!

What do I mean by that? Simple, you need to keep one step ahead of your competition or at least match them. Yes, I do know that at times this can be very hard BUT if you have the marketplace knowledge, all you need are an array of tricks up your sleeve that you can use to spice up your listings and wipe out at least ¾ of your competition.

Now the following example is true and happened to me recently on eBay. It actually shows you that even us PowerSellers slip up from time to time BUT using marketplace knowledge and a few PowerSeller tricks, you can turn what seems like a nightmare situation completely around to your advantage and get the buyers back on board.

The recent situation that happened to me involved a new and very naïve Seller who saturated one of the categories I sell in with just one type of product - Goretex Jackets and Trousers. Now Sellers come and go and although there were other Sellers in this category selling the same items, there was enough room for us all to make a good profit and not trip each other up and overall I was dominating the category for sales - up to that point!

Now, when someone “crashes” the party and floods the market with the same products you are selling, the result is always the same - it drives down the overall profit margin of ALL Sellers because Buyers have so many choices of the same product to choose from, so when one item starts getting bids, all the buyers do is move onto the next one available. It is even worse when multiple identical items all finish within an hour or so of each other, you get a kind of Buyer cascade effect.

As you’ll see below literally overnight my profit margin on the Goretex Jackets and Trousers went from around +300% per item to in some cases making a 50% loss!

Now it was almost impossible to be proactive in this situation because I'd taken my eye off the ball and the listings had run their course - If I'd seen them sooner, I could have been proactive and not reactive!

Because the Seller came out of the blue and was obviously happy to make a small profit on each item, his naivety did not allow him to see the damage he was doing to the rest of us and more importantly the profit he could be achieving. He was acting more like a "Bull in a China shop", than a savvy Seller.

I had to take immediate and drastic action to protect my interests - not so much get rid of this Seller (eBay is a free for all) but get myself back on top of the market and get the profit margins back up.

OK, here is the situation explained in full AND exactly how I got myself out of it and back on top again in true PowerSeller style.

The Problem

As already mentioned I was selling Goretex Jackets and Trousers which come in 4 sizes - S, M, L and XL. Now I sell the items separately and thus had 8 (4 Jackets and 4 Trousers) auction listings all due to finish on a Sunday at 20:00 hrs.

The auctions finished as scheduled but the resulting sales were a disaster! I made a loss on 4 items, just about broke even on 2 and made a very slight profit on the remainder! Talk about being wiped out overnight!

Obviously there was a new seller on the block as these products are still Top Sellers so I knew someone else had cornered the market. So using The Auction Spider Search Engine I found the new Seller very fast and started analysing his auction listings.

What I found was a complete surprise as the new Seller had swamped the category with Goretex Jackets and Trousers and had about 32 auctions running simultaneously and ending within an hour from first to last item!

To make matters even worse and really complicate the situation, the new Seller had copied my listings word for word and was even using my photo to sell his items! The words “cheeky bugger” are a polite way of expressing what I actually thought!!

What this Seller had actually achieved was to take the top 4 potential bidders completely out of the game as there were now 4 identical items they could bid on, all finishing within the hour. This will naturally lower the end price and profit margin for the new Seller but when you add my auction listings as well, buyers had a choice of 5 identical items to bid on which all finished within an hour of each other.

Now this Seller had done his homework and apart from using my complete listings to sell his items, he had lowered his postage charge to undercut me - this naturally attracted the Buyers away from me.

The PowerSeller Solution

I contacted the Seller and informed him about copyright theft etc but received a very rude email back informing me that anyone can sell on eBay and that you can’t copyright anything on the internet! Boy, I had my work cut out here and thus eBay were informed due to this Sellers breaches of my Copyright as per eBay Terms and Conditions.

I also realised that I could actually benefit from this Seller and turn the situation to my advantage as well due to the low price the items including his were now selling for.

As expected, eBay intervened and the Seller had to change his listings/descriptions and photo - The Sellers new listings were very different and the photo was not very good - they were basic and clearly showed the Seller had no idea about the items he was selling.

Now there are only 3 Wholesale Suppliers here in the UK that sell the Goretex Jackets and Trousers and I have accounts with all 3 - I basically knew his cost price for the items and he was starting his auctions at ½ cost price (the same as mine).

Next, I used one of my eBay buying aliases and made an offer to buy some of his kit at just over suppliers cost to see what his reaction would be, I also started bidding on some of his items using my alias.

He accepted my offer for the "buy it now" and I won a few of his auctions at just over wholesale cost - this guy was after the quick sale and was not keeping an eye on the numbers. Also because of the flood of items he had on ebay, the end prices were extremely low - Buyers were spoilt for choice.

Next, all I had to do was re-list his kit, lower my postage charge BUT I also offered a free bonus of matching Goretex Gaiters with my Goretex Trousers and a Cold Weather Hat with my Goretex Jacket - both the free items cost about 1.00p from wholesale but the chance of a "free item" will always attracts the buyers - and it did.

The Result

Within 2 weeks, my profit margins were back to 300% and even higher in some cases, I had market dominance again for the Goretex Jacket and Trousers and the other seller has drastically cut back on his listings. Why?

Buyers, are always after the bargain - that's what the eBay Marketplace provides. By lowering my postage charge and offering the Free gifts, a Buyer is going to get more for their money and is more likely to place a bid with me. Also, the new Seller is not watching his bottom line and after eBay/Paypal charges etc is not making much of a profit at all on his items.

Now when the price starts going up on my items, why don't the buyers just cascade down onto the new Sellers items and bid on them at a cheaper price. Some do, but many more will stay with me because of the item listing itself - I have product knowledge and fully explain the pros of buying my items. The new Seller has a 5 line brief explanation - it is too vague and raises questions and uncertainty to a Buyer.

Now please don't get me wrong, I do not mind competition at all - in fact it's what makes eBay a challenge and at times fun. However, when another seller is blatant about copyright theft and is more than happy or naive enough to swamp the Category and reduce all other Sellers listings to peanuts - action needs to be taken.

Remember you're on eBay to make money!

The bottom line is, as a PowerSeller, you need to keep an eye on your competition and try to undercut them or attract the Buyers in other ways. Analyse your closest competitors listings in extreme detail - what are they offering that you don’t?

Get smart and get ruthless.

Once you know the competition, start offering postage discounts, offer a free (low cost) item etc as a bonus or gift - this always attracts Buyers. If the competition is new and naïve enough to swamp your category with identical items, then try buying from your competition and then re-sell the items.

If this doesn’t work schedule your auctions to end just before or just after his/hers but add a free bonus or discount etc to attract the Buyers away from your competition.

I hope the above, gives you some food for thought and remember, in a marketplace as big as eBay you need stay alert and keep as many tricks up your sleeve as you can to out perform your competition.

Above all - Don’t panic or give up.

Selling on eBay is not hard, but selling for profit can be extremely difficult at times. Keep your cool, analyse the situation and turn it around to your advantage - there is always a way.

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