January 2008

1. Message from Derek Gehl
Welcome to the January issue of Bidding Frenzy.

The new year is off to a roaring start. Make this YOUR year to take your eBay business to the next level and capitalize on everything eBay has to offer. And what better way to start than to capitalize on eBay's massive traffic numbers by collecting opt-ins. Our feature article tells you how to substantially increase your eBay (and off-eBay) revenues with opt-in email marketing.

Also in this issue, details of phase one of Detailed Seller Rating penalties in the UK. Find out how you can avoid being lumped into the DSR danger zone -- and what will happen to you if you don't! (And don't think you're off the hook if you're based somewhere other than the UK... think of this as advanced warning for what's sure to be making its way across the waters.)

You'll also find out about some great new ways to promote your eBay business, open up a free portable web store, and cut down on your email chores...


2. **Breaking News**: Meg Whitman announces her resignation and turns over the reins to John Donahoe
eBay CEO Meg Whitman announced her retirement from eBay on Wednesday, marking the end of an era.

Whitman joined eBay in 1998 when the company had only 30 employees and generated annual revenues of $41 million. Fast forward to today, eBay is now a publicly-traded company worth $39 billion that's home to 15,000 employees!

"It was the right time to turn over the reins," said Whitman in a conference call with investors. "It's important that new perspectives and new eyes come to the company."

Those new eyes belong to John Donahoe, president of eBay's Marketplace Division, who will be stepping into her shoes in March.

"During the last three years, John and I have worked very closely together to arrive at this day," Whitman said in a prepared statement, "and we'll continue to work together through the transition. I'm extremely confident in John's skills."

John Donahoe has already made significant changes at eBay, including reorganizing and de-cluttering the site and creating a new revenue stream with Google and Yahoo ads.

His thoughts on the year ahead? "While eBay is not growing as rapidly as I would like," Donahoe told investors, "the brand, the traffic, and the work we did in 2007 position us well and give us strong advantages in 2008."

Donahoe has also been known for reaching out to eBay users to find out what's most important to them... and now he's got a few big changes up his sleeve.

This week, he's expected to announce a major shift in fee structure to try to stave off increasing competition from Amazon and Google. According to a New York Times article:

The new structure will reduce the initial cost of listing an item, shifting the burden to a percentage of the final sale price. Amazon only charges a fee when a sale is made, and sellers prefer this model because it has less risk for them.

EBay is also going to cut the fees for featuring photos on listings because this makes them more attractive to buyers.

In the same article he also talked about plans for improving the shopping experience by making search more relevant to the shopper and displaying results according to the seller's quality rating. These changes are already being tested, and the seller quality ranking, based on Detailed Seller Rankings, has just been rolled out in the UK. See article 4 for more detail.


3. Feature article: Sell to your customers over and over with email marketing
Email is one of the most effective and profitable tools that you have at your disposal to promote your auctions and build your eBay business. It's fast. It's personal… and best of all, it's almost free!

Use email to notify your customers and subscribers of your latest auctions. Use it to keep in regular contact and build relationships with your customers and subscribers. Or use it to direct traffic to your off-eBay website or blog.

(And since very few eBay sellers are using email effectively, you can gain a real competitive advantage if you do it right.)

The best part is that the people who sign up to receive your email notices WANT to receive the information you'll send them -- so they'll be highly responsive to your offers.

So how can you harness the profit-boosting power of email marketing?

There are a number of email management tools you can use to get started -- both on and off eBay. Let's take a look at some of your options...

a. Use eBay's email forwarding system to upsell and promote your listings (or website)

eBay has an email forwarding system you can use to upsell, cross-promote, and push your customers back to your other eBay locations and listings.

Here's how to maximize your customer communications through eBay's email system:

• Customize your eBay invoices: eBay emails winning bidders an invoice with their final total, including shipping and handling. From your My eBay page, you can add a note to this email pointing bidders toward your eBay store and other auctions.
  
  
• Customize your PayPal emails: If you use PayPal, you can also customize the automated emails sent out by PayPal with a personal message and your eBay business logo, if you have one. You do this through your PayPal Account Preferences page.

The only real drawback to using eBay's system is that these emails look just like all the other emails sent out by eBay and PayPal, so they can get lost in the crowd. Here's a sample eBay email:


eBay Store owners, on the other hand, are given much more control over their communications...

b. Take advantage of enhanced email marketing features for Store owners

If you're an eBay Store owner, your email marketing options are even greater. You can:

• Create your own email newsletter and send it to people who subscribe through a Favorite Sellers link in your auctions. Depending on your level of store, you can send it for free to up to 10,000 people. After that, it's one cent apiece.
  
  eBay provides templates for you to use when setting up this newsletter, and there are many elements you can add or customize: add your store logo, write your listing, or feature individual store or auction listings, for example. And you can create up to five different mailing lists.
  
  Plus, you can keep track of how many click-throughs you get so you can analyze the success of your campaigns!
  
  Read eBay's help file for more details.
  
  
• Use Markdown Manager's enhanced email marketing features. If you use Markdown Manager to put items on sale, you can now use it to automatically send customized emails to your Stores newsletter subscribers.
  
  (The number and frequency of these emails depends on your Store subscription limits, however.)
  
  Read more about using Markdown Manager to announce your Store specials.

As you can see, eBay gives store owners more email marketing options. (Yet another good reason to open a store as soon as you can! Article 4 from our April 2007 issue shows you why.)

But even if you don't have an eBay Store, you can still use email marketing to communicate with your bidders and customers. Here's how...

c. Build your opt-in list so you can communicate with your subscribers directly

You can collect the email addresses of your customers and auction visitors and establish a relationship directly with them. Then you can:

• Funnel them back to your auctions to buy from you againOffer more products related to their original purchases
• Direct them to your off-eBay blog or website

There are basically three ways you can maximize your opportunities to keep in touch with your bidders and customers and sell them more items. All three of these strategies are perfectly legitimate, and won't get you into trouble with the eBay "police"...

1. Make use of your existing opt-in list. You may already have an opt-in list made up of your customers and people who have added you to their Favorite Sellers list. By keeping track of which customers buy which items, you can build a picture of what they are interested in and send them details of relevant auctions.
   
   In the emails that you exchange throughout the buying process, include a line that says, "I may periodically send you details of new items for auction that you may be interested in. If you don't want to receive these emails, please unsubscribe by emailing me."
   
   Under US law, any commercial email you send must include instructions on how the recipient can "unsubscribe" to stop receiving your messages. Fortunately, there's software that makes it easy to manage your list -- you'll learn more about it later.
   
   Drive bidders from your auction listings to an opt-in page. eBay allows you to provide a link within your auction listing that takes visitors to a page on a website off eBay -- but only if that page provides more information on the auction, such as more pictures, item details, or terms and conditions... and only if it doesn't offer the same item for sale.
   
   This means that you can create a listing that includes a link to more images or a more in-depth explanation of your item -- and at the bottom of this page, you can provide an opt-in form that people can use to subscribe to your newsletter.
   
   An opt-in form is designed to capture people's names and email addresses in exchange for something you are offering them, like a newsletter. The collected email addresses are then sent to your email management program and added to your list so you can follow up with them.
   
   Collect opt-in email addresses from your About Me page. Another way you can get people to opt in to your email list is to include an opt-in form on your About Me page. Create a compelling offer by giving away a newsletter or valuable free report to encourage people to sign up.
   
   Then make sure you use every possible opportunity in your auction listings and your eBay Store to encourage people to check out your "About Me" page. For instance, tell them to go to your page to read your FAQs, learn more about the products you sell and find out about more important information, such as your shipping policies.
   
   
2. Use PayPal to create a list of previous clients you can market to. If you have been accepting payments via PayPal, you can create an instant mailing list of previous customers.
   
   If you decide to do this, your first message to your list should explicitly mention why you're mailing them (i.e., because they've purchased previously).
   
   In your first email, make sure you state that they can simply click "Reply" to be subscribed to your newsletter updates. Anyone who replies can be considered to have opted in -- and you can add their addresses to your mailing list! If they don't reply, DON'T continue to email them or you'll be sending spam.
   
   (Even once you've received permission, under US federal law, you must include "unsubscribe" instructions in EACH email you send.)
   
   To get a list of these addresses from PayPal, open your PayPal account and click the History tab, then click Download My History. You can customize the Date Range fields and Export format which you can then save to a third-party software program.

You now have an instant list of customers who have already purchased from you in the past (and statistically, are 30% to 50% more likely to purchase from you again)!

4. Manage your email lists and campaigns automatically!

When you create a mailing list of people's email addresses, you're taking a giant leap beyond almost all of your competitors.

Email marketing is one of the most powerful and inexpensive ways for online businesses to market their products and services. And the best part is that you can use email marketing software to put 90% of your email chores on autopilot so your email marketing almost runs itself!

Using email autoresponder software like iContact, you can take care of tasks like:

• Managing your "subscribe" and "unsubscribe" requests and removing duplicate addresses
  
  Creating opt-in forms
  
  Adding new subscribers to your list
  
  Personalizing each message
  
  
• Sending a series of pre-written messages, such as an automatic "thank you for subscribing" email confirmation

... all automatically!

In short, it takes care of all the repetitive email chores that take away precious time that could be spent growing your business.

For more information about iContact and to get your 30-day free trial, visit www.iContact.com.


4. Protect your Detailed Seller Ratings or pay the price: Phase 1 rolls out
In March 2007, eBay rolled out their new feedback system in the UK. Besides leaving a positive, negative, or neutral feedback score, buyers could also rate you out in four areas related to a transaction:

1. Item description Communication Delivery speed
2. Shipping charges

Your average score out of 5 stars in each category is called a "detailed seller rating" and they're all displayed in your feedback profile. According to eBay, DSRs have been left in millions of transactions. And eBay's been hinting that these ratings will play a role in determining things like PowerSeller status and listing prominence.

Well, that time has come for UK sellers. As of December 27th, listings of sellers who scored below 3.9 in the areas of postage & packaging will now show up at the bottom of the search results.

The rationale? Sellers who charge excessive shipping and handling fees turn away potential buyers -- something that affects sales for ALL sellers (and, of course, eBay).

Even though eBay says this change only affects roughly 0.5% of all sellers on the eBay.co.uk site, you'll definitely want to keep an eye on your own DSRs to make sure they don't fall into the "danger zone."

So what can you do to protect your DSRs?

Charge only modest handling charges on top of your actual postage costs. If you do charge handling, it's a good idea to let your buyers know that you charge only enough to cover packaging materials and the time spent on it. You might also consider including a shipping calculator in your listings so your buyers can see the variations in costs according to location.

It's not a bad idea to keep track of what other sellers are charging for similar items to make sure you aren't way out of whack. And periodically review your DSRs to make sure you know if there are any potential problems you can cut off at the pass.
CEO-to-be John Donahoe has indicated there will be more DSR-determined changes coming out over the next year (in the US as well)... so keep your eyes peeled and your ratings sharp!


5. Open your FREE portable web store and promote your items with the latest widgets
Widgets have come a long way since simple "hit counters" made their entrance in the early '90s. You can use these small web add-ons to add interactivity to your web pages. And you can use them to promote your website and auction listings across the Web.

If you're not familiar with widgets, they're web applications that you can put on any website by copying and pasting a small bit of code (usually HTML). Think of eBay shipping calculators, auction counters, quizzes on social networking sites, or eBay To Go, for examples.

These days there are even widgets that allow you to package your eBay inventory into your own mini e-commerce store, which you can promote across the Web. And many of them are free!

Here are three widgets you can use to sell and promote your items -- on AND off eBay...

• Shop-it. This free commerce store is completely portable. Create your own personalized Shop-it storefront (a website within the Shop-it network), fill it with your eBay store items, and start selling without having to fork over any listing or final value fees. (There are ads, however, so think of a Shop-it store as an enhancement rather than a replacement for your own web store.)
  
  Once you've created your Shop-it Store, you can cut and paste code that will allow you to easily place it in your blog, website, and social networking sites across the Web.
  
  Cartfly. It's free to set up a store with Cartfly, but you'll pay 3% from each sale. (And you must use PayPal to process payment.) This is a very simple way to sell items or a service, but there's no way to import your eBay items, so you'll have to create new listings for them.
  
  Cartfly is also portable and can be added to most of the major social networking sites and, of course, your own website.
  
  Cooqy is a free display box for your eBay items. Your Coogy box can be customized with your own store title, categories, and auction listings:
  
  


The Coogy widget lets you showcase your eBay items anywhere on the 'Net to drive traffic to your auction listings. And you can use it to show bidders what other items you have listed in an eye-catching way.

The Coogy widget is free when used on any non-eBay website or if you have fewer than 500 active eBay listings. Sellers with more listings pay a subscription fee of $4.95 a month.

There is an almost unlimited choice of widgets available online, and there are plenty for promoting your eBay listings and affiliate links:

• http://www.widgetbox.com/widget/ebay-towerhttp://www.widgetbox.com/widget/vflyer
• http://www.widgetbox.com/widget/ebay-pictures

To find new and inventive widgets to promote your eBay items, do a search for "ebay widgets" on widget directory sites like www.widgetbox.com. If you really want to learn more about widgets, here's a blog devoted to the topic: www.widgify.com.


6. UK Sellers payment options just got smaller: Do you fall under one of these categories?
Selling in the UK but don't use PayPal? Well, if you list one-day auctions or sell in certain categories, as of January 10, you need to throw in the towel and open a PayPal account.

According to eBay, fraud within certain categories is rampant and they see PayPal as the solution to reducing it. (Or is it a way to ensure that eBay-owned PayPal is kept in the loop? Coincidentally, I noticed Google Checkout's sales recently surpassed PayPal's in the UK. But that may have more to do with the size of the retailers using Google Checkout compared to PayPal.)

Besides one-day listings, sellers who list in the following categories are affected:

• Computing/Software Consumer Electronics/MP3 Players Wholesale & Job Lots/Mobile & Home Phones
• Business, Office & Industrial/Industrial Supply/MRO

If you sell items in these categories and have been holding off on getting a PayPal account, don't fret. The more payment options you can offer your customers in general, the more people you'll appeal to. So just look at it as an investment for your other auctions.

For more information about PayPal UK accounts, visit: https://www.paypal.com/uk/cgi-bin/webscr?cmd=_display-pop-fees-outside


7. eBay teams up with third-party providers to provide advanced FAQ service for high-volume sellers
Do you find you spend as much time answering customer questions as you do listing your items? If so, you'll definitely want to edit your seller preferences to take advantage of eBay's FAQ.

With eBay's FAQ you can provide up to 15 FAQs and answers that buyers will see when they select the "Ask Seller a Question" button. These appear at the top of the "Ask seller a question" form. With any luck, potential bidders will see the answer they're looking for and you'll have one less email to deal with!

If you don't sell in high volumes, you may find this is sufficient to cut down on your customer service chores. But if you're a high-volume store seller, for a monthly fee you can use an eBay-approved third-party provider to get more advanced options.

Using Hosted Support or Parature, you can:

• Create a comprehensive set of browsable and searchable FAQs that can be integrated into your listing.
  
  
• Give buyers the option of reviewing and searching your FAQs when they click on the "Ask Seller a Question" link.

For more information about these services and their associated costs, visit http://pages.ebay.com/advancedfaqs.


8. Auction of the month: Tell a story to get massive publicity and bids!
eBay is more than just a marketplace to sell products. You can use it to promote your service, drive traffic to your website or blog, and you can use it to get free publicity.

Or... you can use it for all of the above! Author and humorist Brian Sack did exactly that with his wacky auction offering bidders the opportunity to "traumatize a treasured friend or relative with baffling, mind-numbing, mystery correspondence from abroad." A unique service, wouldn't you say?

This auction attracted over 200,000 views, inspired 65 comments from prospective bidders, and ended with a final bid price of $415! Not too shabby...

So how can you emulate Brian's auction success?

Start by coming up with a unique angle for your auction, then describe it by telling a story. Here's an excerpt from Brian's auction:

You are bidding on a rare chance to traumatize a treasured friend or relative with baffling, mind-numbing, mystery correspondence from abroad.

Here's the arrangement: I will be spending the Christmas holiday in Poland in a tiny village that has one church with no bell because angry Germans stole it. Aside from vodka, there is not a lot for me to do.

During the course of my holiday I will send three postcards to one person of your choosing.

These postcards will be rant-ravingly insane, yet they will be peppered with unmistakable personal details about the addressee. Details you will provide me.

The postcards will not be coherently signed, leaving your mark confused, guessing wildly, crying out in anguish.

"How do I know this person? And how does he know I had a ferret named Goliath?"

You can read the full auction listing here. Brian used the comments his auction inspired to advertise his blog The Banterist and his book In the Event of My Untimely Demise. Besides the 200,000 people who viewed his auction listing, Brian's story was picked up by the media, including several interviews and radio airtime covering this auction.

All in all, this one little auction listing attracted a ton of FREE publicity!

Let's take a look at what else Brian is doing to take advantage of everything eBay has to offer:

• Captures attention with a compelling auction description that makes people laugh! (And this postcard auction wasn't the first one to use humor to attract lots of attention. You might remember his previous auction listing for a pair of leather pants, or as he put it: "You are bidding on a mistake."
  
  And those hilarious auction listings make people want to find out more about him.
  
  Drives traffic from his eBay About Me page to his blog, video interviews on YouTube, and even his wife's real estate website. (Brian also displays his positive feedback comments here.)
  
  Uses his blog to direct visitors to his eBay auctions.
  
  Sells his book on his blog. In fact, his listing, highlighting his zany sense of humor, is more or less an ad for his book -- if he's that funny in a product description, his book must be a laugh a minute.
  
  
• Generates advertising revenue from his blog.

It just goes to show, eBay is more than a marketplace to sell your wares... it's also a great place to market your service, attract attention, and drive traffic to your other ventures.


9. Final thoughts
The start of a new year is the perfect time to solidify your business goals. So if you haven't started nailing down exactly how you'll raise your eBay revenues in the year ahead (or finally get serious about profiting from eBay), now's the perfect time.

If you're just starting out, make sure you have your shipping basics down to improve your feedback rating and avoid DSR penalties. Or if your eBay business is already booming, open your own web store using one of the free widgets we told you about. And no matter what level your eBay business is at currently, it's always a good time to start collecting opt-in email addresses so you can follow up with your customers and rake in extra profits.

I hope our January issue of Bidding Frenzy has sparked some ideas for the success of your business in 2008. Thanks for reading, and as always, I wish you success with your eBay business.

We love getting comments and questions from our readers, and we read every one! If you have any or would like to suggest topics for future issues, please email us at:
ebaynewsletter@marketingtips.com

Wishing you big profits in 2008!

Derek Gehl, CEO
Internet Marketing Center