Wednesday, January 4, 2012

Our eBay Year - 2011

As promised, this is my post about how our eBay business did last year.  It may be an incoherent rambling kind of post - I'll at least try to keep some structure.

2011 was a good year, compared to 2010 & 2009.   Things kind of slipped in 2010, so 2011 was a very good year compared to 2010. 

Our gross was 23% higher than in 2010, and our net was 28% higher than in 2010.   My first thought was that our expenses must have been lower, but that's not the case.   There's an old adage, it takes money to make money.  Well, eBay, PayPal & just about every other business in existence has a very regressive type of fee structure.  The less you sell, the greater the percentage you have to pay in fees, the less money you get to keep.  When you sell more, the reverse happens, you pay less of a percentage in fees - it's an amazing thing when you finally cross that tipping point.  Our expenses were a lot, at least in my opinion, and the difference in the percentage increase between gross and net I attribute to increased sales.

This increase in net and gross income came in a year that we've offered free domestic shipping on virtually everything we sell.   This is our first complete year offering free shipping, and  it doesn't seem to have hurt the bottom line.   I track our shipping costs very closely, and it's a major expense.  In fact it's our second highest expense every month (and year) without fail.  Only our eBay fees are higher.  Free shipping only works if you know your costs, and can increase your sales.  It worked for us.

Internationally, we charge a flat rate, based on the item sold - postcards will be less than Cabinet Photos, for example.  Also, we charge less on items we send to Canada, simply because it costs less.  I've learned over time how much it costs to ship to the various locations, and roughly how long it takes to get there, in most cases at least.

I've come across sellers who refuse to sell internationally, and that's fine, but I don't understand it.  Possibly the items we sell, postcards and photographs, aren't high on the scamming list.  Whatever it is, our problems have been very minimal.  I can only remember one incident - in 2010 a person from Italy (yes, Italy), claimed he never received his item.  It had been a month, so I refunded his money without any kind of argument.  I did put him on our blocked buyers list though, because without going into detail, I had some suspicions.   And that is it - we've been selling internationally for over 5 years now, and that's the only issue we've had. 

Our international sales accounted for 10% of our transactions, and 17% of our gross income in 2011.  I don't know how that stacks up against other sellers, I don't know if that is good or bad or neither.  But we're glad to have it.

In December 2011, we had our biggest single order for photos & postcards in our history - it was significant to us, and it was going to Poland.  I packaged it up carefully,  sent it off December 17th, and crossed my fingers.  We received feedback for it this morning, and finally uncross my fingers.  We haven't really had any bad experiences shipping internationally.

Speaking of international sales - our highest sales for 2011 went to Canada (by a wide margin), the UK, Poland, Germany, France & Australia, in that order.  The only surprise on this list is Poland - and that was because of that one very large order in December.  In 2011, for the first time we sent items to Peru, Thailand, Turkey & the Ukraine.

I track lots of things.  Our best months in 2011 were, in order, Nov, Jun, Dec, Oct & Jan.  We tend to sell more items in the middle of the week - Tues, Weds & Thurs., I'm not sure what I can do with that info, but there it is.  I know our average and mean daily dollar amount for the year. I know the average amount we receive per transaction, and can split that out between auctions and fixed price.  I know the average number of transactions per day, and the average number of items sold per day.  I know how much we spend on postcards & the various photo types vs how much we're able to sell them for.  I know how many items we've listed vs how many we've sold for the year.   I know what postcards subjects are most popular (believe it or not I track about 137 different subjects).

Photos are a different matter.  I know which types have sold best for us, but subject matter is a different story.  People who collect photos are not looking for the same thing as people who collect postcards.   Photos are somehow more vague, and not as easy to put your finger on.  Photos are more of a feeling, at least for me.

The big change for us this year was the domestic free shipping.  We also offer expedited shipping, and a 30 day return no hassle policy.  If we sell you something and you don't like it when you receive it, just return it and we'll refund your money.   We're basically doing what eBay wants us to do in this regard, and in return (in theory) we should get a bump in the "best match" search results.  I don't know if it had anything to do with our increased sales or not.

Here's another couple of things driving our sales, and oddly enough, something I'm not tracking.  We're getting a lot of repeat customers.  People returning multiple times over the year to buy things - that is a very good thing.  And we're also getting a lot of multiple item purchases, and that is also very good.  When someone buys several items at once, it adds up quickly. 

We also do our best when it comes to customer service.  Package nicely, ship quickly, answer questions, communicate and so on.  I think excellent customer service is the most important ingredient in winning repeat customers.  And it doesn't happen overnight. 

So 2011 was better than 2010 (and also 2009).   We hope 2012, which has started off pretty well, will be better than 2011. 

1 comment:

Patti Anne said...

Good wrap up!