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Selling OnlineA distributor sets up shop on eBay.By Mickey MeyerLike most distributors, we are always looking for places to find new customers. One area that we've struck on at M&M Service Station Equipment Specialists is a non-traditional spot for our industry. A year and a half ago, we set up an online store at eBay, the Internet auction site at www.ebay.com. For those who aren't familiar with eBay, here's how it works. Users open an account with a username and password. Those wishing to buy items simply log on, search for what they want and begin placing bids. Sellers write up a description of their item, set a minimum price, activate the account, and other users begin to bid on it. Items are available for bid for a set length of time, at which point the bidder with the highest price has purchased the item. This type of single listing model was how we initially got into eBay at our company several years ago, when a couple of M&M employees began using eBay to sell personal items. During their forays to the site to check the status of their items, they ran across listings that were similar to what we sell. That spurred us to start buying things from eBay, like unique pieces of equipment and out-of-production parts.
Eventually, we began listing items from our own stock and had success selling decorative non-working equipment. People purchased them as collectibles. We then set up our own “eBay store,” called MVS Gaspump and Petroleum Equipment. An eBay store is different from a traditional eBay auction—it is an eBay seller's online storefront, where sellers can showcase all of their eBay listings. With an eBay store, multiple items are listed at set prices rather than being auctioned off. We use an auction-style format to generate traffic for “generic” items—things like filters, bulbs and nozzles that anybody can use. We list items that are very price-conscious, things that a user may find a little cheaper than the service company would price them. Our eBay customers often purchase products and do the install themselves in an effort to defray the cost of maintenance. We've sent several things to Canada and even overseas to Europe, which I often find puzzling. For instance, an order of light bulbs that we sent to Ireland ended up costing more to ship than the price of the bulbs themselves! Fast-Paced Sales While the revenue from an eBay sale is not very high, the return on our investment often comes from the contacts and additional sales. Often, customers we've done business with on eBay will contact M&M directly looking for other items related to what's online but not listed. People who may be new to the industry or don't have any relationship with a local distributor often check out eBay first. The eBay store gives them a way to find things that keep their service station running. Some of those leads have ended up being great customer leads. We've also sold inventory that may not have been sold otherwise, particularly some older items that had lost their value to the company and would have likely been thrown away. Actual sales from our eBay store bring in about $20,000 per year for our company. However, once all the eBay listing fees, final value fees and the PayPal processing fees are paid, which usually total up to nearly 10 percent of the selling price, the margins aren't extremely high. So while M&M's online eBay store provides a small revenue source, it also adds contact with additional customers, a source for unique products and an online presence. But don't rush out to set up your own. If you have some interest and experience with eBay to begin with, then expanding your presence may not be a bad thing. It takes a lot of time and effort, and only people who are truly into it will do it correctly enough to reap the benefits. |
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