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Tuesday, February 16, 2016

Expanding Into Alternative Markets As Sales For February Pass $1,500

We have just passed the half way mark for February, and after a quiet week last week, we had sales of around $800. Then the weekend was relatively good, and today we sold a $1 Jubilee for just over $400, bringing the total to just over $1,500, so I'm happy.

I have been concerned for a few weeks now that the E-bay sales are not increasing by quite as much as I had hoped, given the amount of material that I am adding to my store on a daily basis. The store now stands at almost 3,500 items, in contrast to just over 900 when I started full time in July 2015. I anticipate that when all my inventory is listed there will be between 10,000 and 20,000 items listed. I started researching why the less than stellar sales growth might be happening and I found all kinds of possible explanations online, some of which I talked about in a previous post. However, there are some that are not the result of nefarious practices, and are actually quite plausible:

1. E-bay has too many listings, so the chances of my items being seen by a casual shopper is almost nil.

2. Very few of my items are coming up in best batch when a customer searches listings for "Canadian stamps".

3. Nearly all my sales are to customers doing specific searches and repeat clients.

4. Google hit e-bay hard by removing many items from organic searches in the past 2 years.

On any given day there are over 150,000 item listings for Canadian stamps. Not all of these are new listings of course. The actual number of pages though that represent new listings for just one day is generally in the neighbourhood of 100-150 pages, each containing 50 items. There is still no way in e-bay to filter by catalogue number, so someone who wants to do a general browse of all the listings for that day has to scroll through between 100 and 150 pages of listings. Easily 70% of these are post 1952 modern stamps. So a collector who is only interested in pre-1952 material has a daunting task ahead of him or her in searching the listings for the day. Consequently most don't search this way. Many will use the default best match for their searches. Those that do look at newly listed items will probably only scroll through 10-15 pages at most before giving up.

What that means for me is that it is highly unlikely that anyone casually searching through new listings is going to see my listings. Most of my traffic then will come from people organically searching either on Google, or on E-bay itself, or people visiting my store. If that is true, then all I am really on e-bay for now is an inventory management system rather than traffic generation. Most of my items are not coming up in best match because I don't offer free shipping and my prices are high relative to other sellers.

It became clear to me that it would be ill advised to continue to rely on e-bay as my sole source of traffic. So I began to research alternatives to e-bay. I wanted alternatives that would have:

  • Little to no monthly fee to operate a store or to list, and 
  • Would allow me to import all my listings from e-bay and keep them synchronized, so that as items sold on a site, they would automatically be removed from the others. 
Which brings me to another drawback of e-bay: it is really not geared to sellers of "long-tail" merchandise like me. What is meant by "long tail"? Basically it is hard to find items that are not priced competitively because they are hard to find. Most sellers on e-bay are selling stamps at below market prices in the hopes of selling them very quickly. Many do succeed at this and are very busy. Why am I not doing this? Well because businesses like that build very little goodwill and are only as good as their latest auction, since they do not build a reputation for having a stock that can supply a collector's needs. Their only point of differentiation is price, and competing purely on price is a race to the bottom in terms of long term profitability. Stamps are about as long-tail as merchandise gets - it takes time to sell them at the market prices. Sure, anybody can sell them quickly if they are willing to charge 30-50% of market. But where is the long term profit in that strategy? What I am trying to do is become known as the go-to place for Canadian and British West African stamps. To do that, I need a deep stock that can supply almost any collector of these countries with what they are looking for. To amass such a stock, I need to be able build it with purchases and keep enough items in stock until I have had time to build the stock to a level where it can be maintained and expanded continually. If I charge too little, it will cheapen the product and I won't ever be able to build that stock to the point that will enable me to establish that kind of reputation. 

E-bay heavily favours sellers who close lots of sales quickly because it means more fees for them. I question the long-term viability of this strategy though as a seller who has very marginal profits will eventually leave e-bay and not pay them any fees, but I digress. So they bump the cheaper listings to the top of the pile in best match and they also favour sellers who offer free shipping, which is absolute suicide in my opinion because it means lots of people will buy a single 99c item and then you have to pay between $0.85-$2,50 to send it to them. If you are having to eat that cost then you can pretty well count those sales as pure loss leaders because that is all they are at that point. I charge minimal shipping in the range I just mentioned. I find most serious buyers are not put off by this and what it actually does is encourage customers to buy more items so as to spread of the shipping cost amongst them. I think having a low shipping charge actually increases sales since a person will try to buy everything from one or just a few sellers to avoid high overall shipping costs. 

As it turns out I found a web-page listing 27 alternatives to e-bay! So I spent most of Friday last week investigating each one and signing up for two new venues. Based on my research, the following venues look highly suitable for what I am trying to do:

1. Bonanza 
2. Delcampe
3. E-crater
4. Etsy
5. Cqout
6. E-bid
7. Ioffer
8. Amazon Marketplace
9. Tias
10. Storeenvy
11. Webstore

Now I know that all the above have bulk import from e-bay features, with the possible exception of E-bid, which in 2015 did not have this feature but may have now. I still have to investigate all of them except for Bonanza, Delcampe and Etsy. Cqout has a large stamp category, so I know that there is traffic on it. The others have thin content for stamps, but may have some buyers. I will be checking them out over the coming weeks. 

Bonanza looks absolutely amazing! There folks have thought of everything, giving me a zillion marketing options, a webstore using my domain name, and being very well laid out. There is tons of technical support and I can even add Youtube videos to my store, which is fantastic because I was planning on beginning to produce them in the coming months and now I can link them to a store. They had many negative reviews online, but I suspect that is simply because they are new and their developes have yet to work out all the kinks. That's fine with me - if I can find a venue where I can communicate with people who have a clue and understand my objectives as a seller, I will stick with them. Why not? It only costs me $20 a month. The problem with e-bay is they have almost completely outsourced their customer support to the Phillippines and the person you talk to knows absolutely nothing that can help you as a seller. All they know are e-bay's policies and rules. In contrast, at Bonanza they can tell you which advertising campaign is best for you based on what type of merchandise you are trying to sell. 

Delcampe is a collectibles website that now apparently has 800,000 members. I have been buying on Delcampe for years, but never seriously considered opening a store there. One of the reasons was that prices there seemed lower than e-bay, so I didn't think I would get much traffic. Also, because there are no listing fees it is flooded with cheap material. However, I have recently read a number of reviews from former e-bay sellers who say that they now sell 10 times as many stamps on Delcampe than they ever did on e-bay. So based on that and the low fees, I decided to give it a try. The synchronized import is already in progress and should be finished tonight. So I look forward to seeing how it all looks. 

Etsy is expensive ($0.30) per 4 month listing and it is very artsy. But I think it will be an excellent place to list the modern artsy stamps that I have in very large quantities, where the price point is within what Etsy buyers are used to paying and the listing cost can be spread over a large number of listings. 

So all in all, I start the third week of February with some excitement and optimism. 

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