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Griff: Welcome Greg.
Greg: Thank you.
Griff: So what are the differences between selling products based on volume versus selling against a profit margin?
Greg: Well, you know, it’s a great question and we really try to educate people. eBay is growing like crazy and we’ve heard a lot of people say that there aren’t as many big sellers on eBay anymore, you know, there’s more small sellers, more people making a little bit of money, but not as many people making a lot of money. And we believe that one of the reasons that may be is people aren’t focusing this on being a real business. There are age-old business principles that people seem to be ignoring because it’s eBay, it’s a new thing, it’s the internet, you know, and they need to go back to the basics of business and look at things that effect how they can make more money. There are two ways to do that, sell more product and make more money on each sale.
Griff: Mm-Hmm, and when is one approach better than the other, because I know some folks are more focused on volume, others are more focused on a higher profit margin. When should a seller use either one, when is one better than the other?
Greg: There are a lot of factors that involve that. One standard example is if you can buy five products versus 100 products, you may be able to buy 100 products and get a very large discount versus if you’re only buying one or a few products in which case you’ll want to move those products more quickly. You may be willing to take a lower sale price on each of those products so that you can move through them by the end of the month. You may be able to move 20 or 30 or more products, make a little bit less on each product, but because you paid less from your reseller or your supplier, you’re going to make more money at the end of the month. People really need to focus and make sure that they’re understanding which method they’re trying to focus on. If you’re buying products that are unique, that have a higher value, you may want to really focus that on, okay, how can I simply make the most money on this one auction rather than trying to sell a bunch of them.
Griff: You know, in order, when you think about this, in order to really decide which way is best you’ve got to make certain assumptions about your buyers, not only your products yourself, but your buyers and what they are looking for. What are the best ways of finding out what those assumptions are, and if they’re true?
Greg: Well that’s the big important thing. So many people make assumptions and they don’t do anything to find out whether or not they’re true. And we’re seeing that a lot of people are thinking, and that’s why we do a lot of shows and myth-busting and things like that because people tend to just follow the pack, “I heard that such-and-such was the best way to do it.”
Griff: Yeah.
Greg: Well, that’s just not the case always and you need to really make sure that you’re looking at your product, that you’re tracking what you’re doing, that you’re not just making an assumption and doing it and not following the results. So many sellers on eBay don’t really keep up with what they’re doing, following the results of their sales and making changes and alterations. And obviously, we here at HammerTap believe that statistical analysis is the best way to verify your assumptions, to prove them right or wrong.
Griff: So you really have to be recording and tracking your business as it grows and as it moves from day to day, week to week, month to month.
Greg: Absolutely. Just as an example, we just did a real quick calculation. There’s about 34 categories on eBay right now, 7 days a week to choose from, 24 hours a day that you can close your auction, 4 different auction types you can choose from, 5 durations, 7 features, that’s 799,000 different possibilities.
Griff: (Laughter) That’s a lot of possibilities.
Greg: If you’re just shot-gunning it and you’re just stickin’ a product up here and there and trying to guess, well, it could be a long time before you get it right. And that cuts off your business. A lot of people quit and simply give up because they don’t have success and it’s not because they couldn’t be successful, it’s because they didn’t try the right way to succeed and they didn’t do that and eliminate the wrong choices and that’s where treating it like a business, finding the tools you need to track your business, to research your business, to take care of your customers. Those are the things that we believe are reasons why people are failing at their eBay business, because they treat it as a hobby and they don’t ever make that jump and say, this is a business and I’m going to treat it as such, I’m going to do research, I’m going to track what I’m doing, I’m going to take care of my customers and be like a real business.
Griff: And of course, if you’re taking that step and you’re using that strategy and you’re looking for the data, that’s the important part, that’s the mother load, the treasure chest, the gold mine that you need to find, and that’s the data itself. And of course, this ties in perfectly with having you on as a guest. How does HammerTap actually help in that respect?
Greg: Exactly. DeepAnalysis, our statistical analysis tool, we kind of see it as a code breaker. There are so many, I mean, you think about back in high school I had a buddy that had one of those briefcases and he was kind of a geek and he brought it in and it had the little three numbers on the combination, right?
Griff: Mm-Hmm.
Greg: You know, somebody snagged his briefcase one day and we passed it back to the buy in the back and fiddled there and before the end of class got the briefcase open because there’s only a few combinations. But, as each different thing gets bigger and bigger the combinations to choose from are more and more complex. You need something that can break the code and you can’t do that on your own, you can’t just trial and error it over an hour and figure it out. And it’s amazing with the tools we’ve got, we’ve got a great new feature actually that we just added to DeepAnalysis which is the year ago data and what that is is a thirty-day snapshot looking forward of last year. So for example, right now I may be interested in the Valentine’s holiday.
Griff: Right.
Greg: And I can see and look what kind of differences happened in the trends last year? What happened around Valentine’s? What kinds of things increased in sales? How can I make more money on my items? And it’s really important to understand that there is a connection between selling more products and making more money on each product, because what you’ll tend to see is the more you sell the more you saturate the market and the lower you can make on each product. And that’s just a standard business principle, that’s supply and demand.
Griff: Right, and sellers can have a direct effect on that equation by offering an oversupply.
Greg: Exactly. And they tend to do that to themselves. We see that all the time, again, people following the pack. We see that in the myth that we talked about of Sundays being the best day to sell.
Griff: Yeah.
Greg: What happens is, yeah, great, it’s the best day to buy because there are so many sellers that believe that myth that it pushes down the average sale price and the buyers are just excited to see that. But if you’re a seller you look for the differences, you look for your place to be, maybe the day before, maybe the day after, you have to understand that there is a place that I can make more money and not be just like the pack of people that aren’t making a lot of money on eBay that are just being mediocre. And I can be better if I treat this like a business and I look for those things and I don’t just follow the pack.
Griff: And again it all comes down to knowing what your business is doing, what it’s done, and knowing against the rest of the marketplace and the key word here is data. You can learn about the product that HammerTap offers at HammerTapNow.com and they offer DeepAnalysis there that is perfect for the seller who is running their business on eBay. I highly recommend it, I think you should check it out, HammerTapNow.com. there you go, Greg, there’s a good plug for the business.
Greg: Well thank you. And we are offering a special right now, it’s $1 for the first month to sign up and then $17.95 each month after that. We’re excited. We’ve got some great new features coming into the software and we’d love people to check it out.
Griff: You can’t, I mean, this is money that you can’t afford not to spend. You’ve got to check this out. HammerTapNow.com, check them out. It’s a dollar for the first month if you’re new to the product. I highly recommend it. Greg, thanks for joining us.
Greg: Thank you very much.
Griff: Always great to have HammerTap on. This segment has been brought to you by Sharpics.com, home of the D-Flector. Great product photos in a flash. You’ve got some captivating questions brewing, I just know it. We want to get to them while they’re hot. Be ready to call at 888-327-0061. We’ll be expecting you when we return with more of eBay Radio.
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