Craft Business Ideas
Issue Number 4, July 17, 2000============================================================
IN THIS ISSUE
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1. Selling your crafts at online auction sites (part 1)
2. Are you making a profit?
3. Free web hosting for your business
4. Subscription Management
5. Contact Information
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1. Selling Your Crafts at Online Auctions (part 1)
by James Dillehay
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Auction sites online provide an excellent opportunity for
craft sales. Ebay.com is the largest and most
popular auction site with over 1.5 billion page views per
month. A list of the other major auction sites appears at
the end of this article.
One advantage of getting your products up on an auction
site like Ebay is that they already get the traffic you want
so badly - like 12 million customers.
Auction customers can find your web site when you link your
auction pages to your web site catalog. This method will
boost your site’s traffic many times over. Cost to you is
little but a small listing fee to the auction site.
When beginning to sell at auction sites, spend time visiting
and reviewing the sites listed below. Check out other arts
and crafts listings as well as their related web sites. Use
the search engines at Ebay and the other auction sites so
that you understand how they work.
Types of auctions
Reserve auctions - Bidders are aware there's a reserve price,
but they do not have access to what it is. To win the auction,
the bidder must have submitted the high bid and must meet or
go beyond the reserve price. Typically, when the reserve
price is not met, the seller does not make the sale and the
highest bidder is not obligated to buy. In general, reserve
auctions are not to your advantage. Most people avoid
reserve price auctions because they have no idea what the value
of the piece is.
Instead of setting up a reserve auction, simply set up your
auction prices at a minimum amount you will accept. If the item
doesn’t sell, start again at a lower price or list different
items.
Dutch auctions - This type of auction is for selling multiple
copies of the same item. An example would be 10 mugs, 17 sets
of earrings or 25 pattern books. Sellers list an opening bid
or minimum price along with the number of items for sale.
Bidders enter the price they want to pay and the quantity to
buy. All winning bidders pay the lowest successful bid.
Private auctions - This kind of auction protects a buyer's
privacy. Bidders' email addresses are not displayed on the
item or bidding-history screens. When the auction ends, the
seller is the only one who knows the winner. Private auctions
can’t be tracked by the bidder and so, are less popular.
What auctions cost you
As a seller, you pay an insertion fee to list your item on
an auction. Insertion fees range from $.25 to $10 or higher.
When the item sells, you will be charged a value fee which
ranges from 1% to 5% of the selling price.
To get your item listed in bold print or as a featured item,
expect to pay additional charges. I recommend you avoid
spending extra money in the beginning on listing features
such as bold letters. Most people will find your auction
because they are searching for keywords related to your
product. You might attract a few viewers from a feature
listing, but your most likely prospects for placing bids
will be searchers looking for specific items.
How to sell at auctions
Here’s the steps involved in setting up to sell on the
auction sites:
1. Draft a benefit laden description of your product. Gather
all your images and text descriptions. Use graphic bullets
to emphasize each benefit or feature.
2. Determine your minimum selling price. You may have to
experiment at first. Learn what prices people will start
bidding on.
3. Set up an account with the auction site.
4. Write the URL of where your product images will be located.
Create your page at the auction site using your images and
text descriptions.
5. Link to your website if your auction prices are not lower
than prices shown on your web catalog.
6. Decide which categories your item fall under - there should
be several. Determine other areas your customers will visit and
list there, too.
7. Save all the above info in a spreadsheet or database file.
8. Enter the auction site’s "sell your item" page and fill out
the appropriate forms. Since you created the info once already,
simply copy and paste from your file into the required fields.
9. You will get a confirmation page or email with a number for
each auction you are posting. Write this number down or enter
the number in your spreadsheet or software for tracking auctions.
10. When your auction closes, contact your winning bidder or
bidders, usually within three business days. Confirm the final
cost, including any shipping charges, and tell them where to
send payment. When the bidder sends in payment to you, send them
your item.
Check out the seller's guide for more tips on selling at eBay.com. When you master the art of auction selling there, the other auction sites will be easy
to learn.
This article is excerpted from the book:
Selling Crafts on the Internet.
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2. Are You Breaking Even?
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A good recordkeeping system helps you effectively analyze
your sales and expenses to see where there are strengths and
weaknesses in the way you do business. Without this knowledge,
you might be selling thousands of pieces and still not be
breaking even.
Break-even is when your total costs or expenses equal your
sales or income. To learn your income multiply:
selling price x number of units sold = net sales
For instance, say you are a stained glass artist and your
average piece sells to stores for $50 and your expenses
average $900 per month. Here is how you would determine
the number of items you would have to sell to meet your
expenses given those figures. "Y" is the number of units
you need to sell.
$50 x Y = $900
$50Y = $900
Y = $900 / $50
Y = 18
You must sell 18 pieces a month to meet your costs of
staying in business. That's good to know. But you must also
learn whether each piece is worth making. That is, are you
making a profit?
Figure your material costs, labor costs and an estimated
hourly cost of doing business for each item that you sell.
Your hourly cost of doing business is figured by adding up
all non-material and non-labor costs like rent, utilities,
phone, etc.. Divide this sum by the total number of hours
you work in a year. The resulting figure is your hourly
cost of doing business.
Add up the material costs, labor costs and hourly cost of
doing business. If the sum of these numbers is less than
the price you are currently asking, the piece is priced
profitably. If the sum is greater than your current price,
you are losing money with every sale.
For more strategies on becoming profitable through
pricing, recordkeeping and tax advantages from your craft
business, see
http://www.craftmarketer.com/pricing-crafts.htm.
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4. Subscription Management
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