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EZ Money-Maker #2: "Selling Pans To Prospectors"
Strategy: To
sell to the sellers the supplies, tools and equipment they need to sell more
Timing: The
best time to use this strategy is when the 'gold rush' is on- CR's are at 80% or better and there has been a lot
of media coverage of people making money on the Internet, especially eBay.
This strategy is commonly called, "Selling pans to prospectors"- and for good reason. Most gold prospectors
never made any real money, but the merchants selling them the pans, wheel barrels and other tools they needed sure
did!
There are people selling things like bubble wrap, packing tape, peanuts for packing and boxes to sellers and mail
order houses on eBay. They do very well.
Can you think of other things that could be auctioned on eBay to small businesses or others who need special "tools"
for their jobs and businesses?
How about software to help automate their selling or a service that follows-up with their buyers after the sale?
Let's look a little closer at the way this works and how to really make money doing it:
"Who's Selling What On eBay? Would you believe...?"
Reverse engineering is a process that very few manufacturers will admit to doing--but they all do it. This is how
it works:
You buy a competitors product and take it apart to see how it works, and what secrets it contains and how you can
apply what you've learned to your own business. It's done in almost every industry, so why not Internet auctions?
Here we go:
In January 2000 eBay announced the award of their first "Shooting Star". A Shooting Star is awarded to
anyone with a feedback of 10,000 or more. The award was given to "Parrothead88" (not referring to the
shape of his head but to his eBay user ID).
Imagine! A positive feedback of 10,000!
Anyway, what lessons can we learn from this man? What brought him such stardom and notoriety? Let us look closely,
friend, at his success...
As of the date of this Report Parrothead88 has over 14,390 feedbacks! Even more amazing is that 19,000 are positive
(14,400 from unique users) and only 10 are negative!
In the month of January he received 1,497 positive feedbacks! That's 48.3 per day...including Saturday's and Sunday's.
What is he selling? Let's take a look at his auction listings ending today at:
http://cgi6.ebay.com/aw-cgi/eBayISAPI.dll?ViewListedItems&userid=parrothead88
Ok...go ahead and look, then come back here. Ummmmmmm....1,2,3 buckle my shoo…
Back? Good! And what do we see? Hummm... stone coasters, bubble mailers and…and…packing tape?
In January when I 'spied' on his auctions this is what I found: Most of his auctions still had 4 days to go...but...if
he were to close his auctions out that day he would have gross sales of $822.61. But, for the sake of argument
...he is only half way through his auctions for this period...he will probably get 50% more orders on his dutch
auctions. That puts his gross sales at about $1233.91. These auctions started on Feb-06-00 and will ended on Feb-16-00.
He has posted some new auctions that will end on Feb-21-00.
Now, if you look carefully at what he's doing he is selling the same items over, and over again. In other words
HE DOES NOT HAVE TO RE-CREATE WHAT HE IS DOING ON EACH AUCTION (what I call an "eBay Platinum Success Principle").
I'm sure he is using a template or boilerplate html listing. All he has to do to start and auction is submit the
template, maybe make one or two changes...and he's done!
Also, if you look closely there is a 5 day period between the ending of his auctions. My guess is that he needs
that 5 days to fill all his orders. I'm assuming that he has a spouse or friend who helps him...but maybe he's
on his own or has several employees…I don't know.
At this point we have some understanding of what he's doing, what he's selling and what his BASIC strategy is.
There's a lot more to this guy's operation than meets the eye. (I have never ordered anything from him...but I
WILL...because I want to see what ELSE he is doing! You should too. Learn from others- don't steal their ideas,
but learn from them.)
First, my guess is, most (maybe not all) but most of the orders he is getting from his eBay auctions are BRAND
NEW customers of his. Most of his customers are probably eBay sellers themselves, or have a mail-order business
that uses his mailers, bubble wrap, etc. Here's where his little enterprise gets really interesting...
If he was smart...really smart... he is capturing the name and address of every eBay customer he gets and follows-up
with them on a regular basis to SELL THEM MORE OF WHAT THEY JUST BOUGHT. Did you get that? He also advertises his
web site at:
http://www.bargainsgalorestore.com/ where he is taking orders for the SAME stuff he's selling on eBay.
And my guess is that, once he makes a sale, that customer gets frequent mailings from him for a variety of other
products. His customer acquisition costs are almost zero. Ebay generates NEW customers for him, at the same time
he is selling stuff like crazy, and he gets additional sales (AND more profitable sales) from his repeat customers
who bought from him originally on eBay!
So, why is he successful? He's not selling anything very expensive...or valuable...or collectible...or something
that you couldn't find walking down the street to the corner store...BUT...he is selling something *sellers need*
on eBay.
The lessons to be learned here?
1. You can do the same reverse-engineering analysis on anyone selling anything on eBay or other auction sites;
2. Capture every customer name you get from eBay (even if you don't or can't sell them anything else right away-
the NAMES are valuable);
3. Think about future sales and maximizing value for your customers...don't concentrate just on the immediate sale;
You are more creative and brilliant than you think (OK, not relevant to this strategy but...it is a lesson to be
learned, isn't it?) |
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Entire Contents © Copyright 2001 by David Vallieres. All rights reserved. |