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Working from home on eBay

Tips for starting up

How to succeed running your own sales business on eBay while also teaching your homeschooled kids how to help out, so you can afford to homeschool in the first place.

by Lori Dake

So many times, one of the main deterrents from a family considering homeschooling is the financial situation. It can get quite expensive, rivaling that of prestigious (and pretentious!) boarding school overseas. It can also cost a fraction of all those hidden costs public schools don’t tell you about until it’s too late! That isn’t what I’m referring to however; I’m talking about the other cost – the cost of many families losing that oh-so-necessary dual income.

Many families curtail this obstacle by starting their own businesses of many varieties. Family-owned businesses are the backbone of our economy, and it’s a great way to incorporate a strong work ethic in your children, as well as teach them valuable life lessons. Let’s not forget how nice it is for us grown-ups to be able to set our own schedules, just like our homeschooling kids. We started a family-run business, and if you have a few minutes, I’d like to go into detail about it!

We run an independent record label, and the fans who buy our albums are what I like to refer to as “an exclusive clientele.” Because we don’t have the budget of Capitol Records, we have to be a little more creative in getting the word out. Stripped down, running a record label isn’t a whole lot different than running most types of stores: we’re merchants, we have stuff to sell, and we need to get people to buy that stuff. The easiest way to sell any product nowadays, thanks to technology and the Internet, is on eBay and other auction-style sites. You don’t need a degree from MIT to get started; you just something to sell and a computer to sell it with.

Click here for eBay! to get details.

As with any business, you need to come up with a little seed money to begin. Most of the homeschoolers I’ve come across really don’t have a whole lot of extra money lying around, so to get that seed money, my suggestion would be to hold an online garage sale. Make this a family project from the get-go, and have your kids help you find items for sale. Read the auction site’s rules on what can and cannot be sold via their site, and then compare that to the post office’s rules on what can and cannot be mailed. If you are thinking about selling used curriculum, be sure to note which companies forbid resales. Also, just so you know, Teacher’s Editions cannot be sold on eBay, but you’re welcome to sell the text book. You can make arrangements off the site to do that.

After you’ve figured out what you are going to sell, you’ll need to come up with a description of the item, including a picture of it. (If you don’t have a digital camera and/or a color flatbed scanner, you can always stop by a friend’s home and ask, just until you can afford your own.) Ebay’s listing system is relatively easy, but the first couple of times listing, you really need to pay attention to what information the site is asking. This includes whether you actually wish to run an auction, or do like us and just use the “Buy It Now!” flat rate pricing program. People have a good success rate with each; it really just depends on what it is you’re selling.

Side note:In February of 2006, eBay jacked up the prices on listing items, and thousands of sellers fled practically overnight, feeling they were being cheated. We weren’t pleased with the increases either, but we figure it’s still an awful lot cheaper than opening a storefront that never closes, and we have millions of customers shopping with us every day of the year. We also noticed our competitors (the ones who stayed) either jacked up their prices or started getting shady with the shipping costs. The end result was us gaining LOTS of new customers, because we kept everything exactly the same. Many of the customers started dealing with us directly as well, so things got even better. As I mentioned before, there’s lots of other auction sites out there, but we stick by eBay, because they have the most amount of buyers.

Now because we’re selling CDs, brand new and shrink-wrapped, it’s important we make sure our customers are aware of this. In the title, we state the name of the band and the name of the album, and in the description part, we will state that fact, we categorize it as such and in its genre, and we also offer which record label the album originates, as well as from which country. We charge a flat rate on the shipping ($1.50 in the US and $4.00 anywhere outside, including Canada and Mexico), which includes the cost of the packing materials and the few moments it took us to wrap it, and we do not offer insurance.

While it is available and less expensive, we do not use Media Mail, because we want to ensure our customers get their item as quickly as possible. Therefore, we use First Class and Air Mail almost exclusively. Should you choose to use Media Mail, you should state as such, but offer other methods at the buyer’s expense. If we have a very large order, we may use the flat rate Priority shipping box, because no matter how heavy it is, “if it fits, it ships”. A perfect example is when we have orders of up to 40 CDs to Puerto Rico, and it only costs us around $8.00, because we used that method. And hey – Priority mail is guaranteed delivery within 2-3 days! Also, flat rate boxes can be picked up by your postal carrier, just like UPS and FedEx, so you can save yourself a trip to the post office. Check the Post Office website for more information http://www.uspo.gov

Side note:I mentioned “shady shipping costs” previously, and I want to clarify what I mean. Many times, you’ll come across a seller who is offering an item for a ridiculously low price, and you know for a fact something has to be up. Well, there’s always a catch! We’ve seen our competitors list CDs on auction for as little as a penny, but then charge $10.00 for shipping! So, even if the seller only gets a single bid, the intended selling price was retained. The problem with that is simple: when you do that, you are being deceptive and making people cringe at the sticker shock! Shady used car dealers are famous for doing just that: do you want to be compared to a shady used car dealer?

Once your item is listed, you will go through the same procedure for the rest of them. Trust me, this will become old hat in no time, so don’t sweat it! At this time, you’ll want to let people know, besides the eBay surfers, your items are available, but please do not spam! Spamming people will not get you any sales, and in fact will kill your reputation before you even get off the ground. You can gently do so by posting your eBay store or “Me!” link in your signature field, or bring it up in a conversation. Word of mouth really is some of the best advertising! I’d also suggest you take it a step further and create a website or even a blog to talk about what you’re doing!

On your first sale, you’ll be very excited, as you should be! All that hard work was worth it, and now it becomes time to ship your item. When we first started, we bought the pre-made shipping envelopes made especially for mailing CDs. They cost about $0.70 each, which really isn’t much, but when you consider we only charged $1.50 for shipping, we quickly realized we just cut into our profit, because it costs $1.11 in first class postage! We’re far from being the cheap, stingy types, but we did learn how to become a little more frugal. So, after playing with a few ways of mailing a CD and keeping it at the same weight, we came up with buying large bags of bubble wrap and boxes of 9″x13″ manila envelopes. Each envelope cut down the middle is the perfect size for mailing two CDs and a piece of swag, and the mailing cost was knocked down to less than $0.20 each!

Side note:“Swag” is a term many companies use to describe a freebie item with their logo and information on it. This would be like those free pens, key chains, buttons, stickers, calendars and such you’ve probably gotten in the past. Swag should always be included in everything you sell, which includes a catalog of your products, to remind your customers to buy from you again. In our case, we always offer a free poster with every order, which features one of the bands on our label, and has our website address on it – sometimes, we have one-time swag items we will also include, especially to multiple orders.

Once you start getting in regular sales, it’s important to remember two old sayings:

“The customer is always right” and “Give the lady what she wants.” Don’t argue with your customer, even if he or she is wrong. Be polite as possible, and find the easiest way to rectify the situation. If the order didn’t reach it’s destination, the first thing you should do is contact the buyer with the mailing address you used and verify the information. In our case, if they didn’t get it, even when the address was right, we just go ahead and send them another one. In all the time we’ve sold online, even way before we used eBay, only once has this happened. Remember, your reputation is at stake, in the form of feedback, and when you’re just starting out, that positive feedback is crucial in people wanting to buy from you in the future!

Once you’ve gotten rid of your initial items, you will want to use that seed money to buy up multiple items of “something” and officially go into business. In our case, we wanted to continue with the CD-selling thing and amassed a much larger variety of release titles. Many of those titles came from trading with other labels for their overstock for some of ours, while others we bought at wholesale cost.

Here’s where you need to think a lot about: what “thing” out there you know about inside and out? What is your passion? If you’re an artist, you probably know all about paint – different mediums, brands, quality, average price and so on. You would probably also know about canvases, too! There’s the theme of your store, and you should start from there.

Find the manufacturer of a brand of paint and contact them about wholesale purchasing. Big companies may not deal with you, but may be friendly enough to point you in the right direction. In our case, Capitol Records won’t sell us CDs outright, but will tell us of a middle-man wholesaler who will. We won’t get the wholesale price Best Buy gets, but we will get the discount any independent record store gets. And, because we have a lot less overhead, we can offer a better price! You can also go the traditional eBay direction and haunt flea markets for collectibles to sell. This isn’t my bag, but for those of you who are into antiquing, this is definitely for you!

While you are amassing true inventory and perfecting your packing skills, you need to start thinking about becoming a legitimate business. The first $600.00 you earn does not have to be declared to the IRS, so that seed money you earned is completely yours. However, anything over that is a profit, and you need to be paying taxes on it. Don’t sweat it, because when we pay our taxes, our CPA finds so many write-offs for us that we still get a refund! You also have three years to turn a bona fide profit, so if it takes you a while longer to really get your head above water, don’t worry about it.

When you establish yourself as a business, you’ll probably want to register as a sole proprietor. If the record label was run by just me, it would be Lori Dake, dba (doing business as) Rotting Corpse Records. Your EIN (tax ID number) could just be your social security number or get a free Tax ID from the IRS. Everything else is just as simple. Also, you can legitimately do that, even with the whole family involved, because family members do not have to be declared as employees, and the bulk of child labor laws do not apply. This is why most diners and small shops are husband and wife teams, and any kids can be found doing stock and running the register.

Once you’re completely established, you’ll then want to really push your store. Keep doing what you’ve been doing, but add to it by having your store’s logo on everything. This includes your catalog or swag, as well as your mailing label. You want to look as professional as possible, to ensure your customers will contact you again. Think like the Big Boys, and you’ll be one of them! This includes coming up with a professional web site to compliment your business, including your own domain name. Keep shopping around for more inventory, and be sure to keep your kids involved! The only other piece of advice I can offer is this: sometimes sales will slow down, so it’s important you’re prepared to live on an unpredictable income. Other than that, have fun being home with the kids more, and I wish you good luck!

 

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