One of the reasons that selling on platforms like eBay, Amazon, and other online marketplaces is so appealing is that you don’t need to worry as much about driving traffic back to your own site.
Worried that you’ll need a nuanced marketing strategy to attract customers? Since these platforms have already done a lot of the heavy lifting of getting customers in the door, you probably won’t have to spend as much to reach your target market.
That’s the good news. But you’re probably also facing stiff competition, and the profit margins can be thin. To be successful, you need the right tools to grow and scale from maybe 30 to 40 orders per day, to more than 200 orders per day.
So, how do you become an Amazon or eBay top seller and build a profitable business?
To learn more, we spoke with Jim Sinclair, who has been one of our customers for years. Jim started selling auto parts on eBay in 2011. His eBay store, 123AutoParts-Store, has a 98.7% rating and over 60,000 reviews. He’s been a top-rated seller for last 10 years on eBay Motors, won the eBay Motors Highest Mobile Sales Growth Award in 2015, and has reached $3 Million in annual auto parts sales on eBay and Amazon.
Needless to say, he’s an expert in the industry. In 2016, Jim took the software he built for his own use as a marketplace seller and made it available to anyone selling auto parts on the marketplaces. His tool, Channel Spyder, solves all of the pain points he experienced as a seller.
Don’t rely on conventional wisdom
In marketplace sales, conventional wisdom only goes so far.
“What’s common sense in a regular retail world, in your brick-and-mortar or dot-com […], doesn’t necessarily fit with what you have to do in a marketplace,” says Jim.
Being successful is less about building brand loyalty or recognition—areas traditional businesses are deeply concerned with.
Instead, it’s about optimizing specific levers. This might mean having fast order fulfillment, same-day shipping, the lowest price, or the best ratings from customers. But, you also need to have a deep understanding of the marketplace systems so you can use them to your advantage. It also means adopting marketplace software and tools that can help you be more efficient.
If you want to scale up and have a competitive advantage in the space, there are three key factors you need to have in place:
- A solid, competitive pricing strategy
- Effective marketplace software and tools
- A system for fast, helpful email responses
We’ll go into how to put strategies in place for each of these factors next.
Look for ways to reduce costs so you can reduce prices
How can you price competitively (and still make a profit) in a space like eBay, where buyers are looking for products at the absolute lowest price available?
You can’t necessarily cut down the cost of the physical product you sell. However, you can negotiate in certain areas and set up systems to reduce your labor costs. This allows you to offer your products at a lower price—a clear benefit in online marketplaces.
Negotiate with shippers and suppliers
As a first step to optimizing your pricing strategy, start with the basics.
“Marketplace buyers tend to buy from the lowest-priced seller,” Jim says. “You can help meet this need using the economies of scale to negotiate better costs all around with supplies, vendors, shipping carriers, etc.”
Look for efficiencies in your systems and workflow
Second, Jim recommends taking a look at where you can personally reduce costs.
Where do you spend the most time? What can you streamline or accomplish faster by putting new systems or tools in place? Can you spend less time managing listings by using inventory management and multi-channel listing software instead of doing it manually?
Try drop shipping
If you don’t already use drop shipping, you should consider it. It will be difficult to scale if you continue to be involved in packaging and sending everything out yourself.
Drop shipping cuts out the time and labor associated with finding, packaging, and sending out orders. It’s an important part of being competitive, as it allows for lower prices.
“A lot of sellers I talk to are new sellers, and they’re telling me, ‘I can’t understand why my competitors are able to sell for so much less than everybody else,’” Jim says. “Next to their use of technology, one big reason their competitors are selling for less than everybody else is because they’re not touching the parts. Labor is your highest cost of goods sold. The big ecommerce sellers don’t have the labor of stocking, tracking inventory, re-stocking, pulling, packing, and shipping product.”
Minimizing (or completely eliminating) your time spent on order fulfillment is a huge step toward reducing your labor costs. Jim says that once you have drop shipping in place, your tasks will revolve less around warehouse work, and more around data entry and customer management.
You’ll be able to spend more time on areas like figuring out how to improve your conversion rates, optimize your listings, and manage your business’s health overall. Fortunately, these are areas where it’s easy to add tools that will help you manage your operations better and become more efficient as well. We’ll get to those tools next.
Use tools that streamline operations
In the traditional world of ecommerce, selling seems straightforward.“Fifteen years ago, if you wanted to sell online, the process seemed straightforward; you buy product, store it in your warehouse, and list that stuff on your website,” says Jim. “A lot of people still live in an old-school ecommerce world, some evolved version of a brick and mortar retail store.”
However, online marketplace sales are a little different. Coordinating drop shipping, managing multiple listings each with their own product data, responding to customers on multiple platforms—it’s more complex.
So, to succeed across Amazon, eBay, Walmart, Newegg, and so on, it’s important to seek out inventory management and multi-channel listing software that will make you more organized and efficient.
Multi-channel listing software and inventory management
One of the biggest areas that you’ll devote attention to as a marketplace seller is your product data. In marketplace sales for auto parts especially, organizing and managing your product data and vehicle fitment is a huge undertaking.
“[For] eBay motors, for example, you’re going to put in your year, make, model, engine, trim of your vehicle, and it will tell you the parts that fit your vehicle,” says Jim. “One product might fit 500 different vehicles, year, make, model, engine, trim combination. So, it’s just a lot of product data.”
Not only that, but if you sell on multiple marketplaces, you’ll be managing listings in multiple places. This doesn’t just mean uploading many listings (and all the associated product information) on multiple platforms. It also means keeping track of what is for sale where, what has been sold and what is still available, and countless other small details across multiple marketplaces.
While you can initially do all this manually, it is impossible to scale and become a top seller this way. It’s hard to keep your labor costs low when you’re spending countless hours on data entry and monitoring, after all. Plus, Jim points out that if you’re not taking the time to customize your listings and are using the same product data as everyone else (such as the exact same parts descriptions, and so on), your store isn’t going to stand out.
How can you solve this problem and cut down on your time spent managing your listings? Jim recommends using a multi-channel listing tool to help you manage your data and listings in bulk. “Effective use of technology is where that competitive advantage comes in,” says Jim.
It was for this reason that Jim created Channel Spyder, an inventory management tool that allows for easy management of drop shipping, as well as channel listing tools like bulk listing creation, monitoring, and managing bundled sales.
By using a tool like Channel Spyder, you can manage all of your listings in one place, instead of having to manually go into each and every one, on every platform. Plus, Channel Spyder can route orders directly to your drop shipping suppliers, which cuts out another step on your end.
While Channel Spyder is uniquely suited for the needs of auto parts sellers, there are other options for multi-channel listing software. The important thing is to find one that works for you and take advantage of it, rather than trying to do it all by hand.
To be able to truly scale a multi-channel ecommerce business, automation is essential. Otherwise, you’ll reach a point where it just can’t be done manually.
“In automotive, the average seller that I have using Channel Spyder is listing upwards of 300 thousand listings on a single store,” says Jim. “We’re not talking about one or two thousand products that you can hire someone to create listings for—we’re talking about 300,000 unique listings. And I’ve got some sellers that are up into the millions of unique listings across multiple channel stores. So, that’s a lot of products listed out there, and a lot of things to be updated. It just can’t be done effectively without the right technology.”
A shared inbox tool
Managing many listings on multiple marketplaces means you’ll be receiving lots of buyer messages and order notifications. These messages will go to the inbox you have set up on each marketplace. You’ll have to log in, respond, log into another one, respond, rinse, repeat.
Ultimately, the major time suck for marketplace selling is administrative. It’s tasks like entering and editing data, monitoring listings, and communicating with customers.
Jim sees it time and time again with Channel Spyder customers. “Most of my sellers are drop shippers, so, they connect up with the 10, 12, 15 different drop ship warehouses that Channel Spyder is connected with. They never touch the parts, they never see the parts. They’re just data managers where they’re just listing product data out there. They’re handling the customer support, and the customer service.”
“This is where email management software like Outpost is very valuable,” says Jim. “Buyer communication is very difficult to automate, so human hours have to be put in. The idea is to minimize those required human hours.” With Outpost, sellers can view all email coming and going from all mailboxes in all online stores, all on a single screen. There’s no need to log into multiple inboxes or use different browser windows.
Anyone else on his team can log in with their own unique account information too, so multiple people can work out of the same inbox without stepping on each other’s toes.“A tool like Outpost allows a seller to sell with multiple eBay stores, multiple Amazon stores, multiple marketplaces—and handle all the communications seamlessly,” says Jim.
Using a tool like Outpost is another way to keep operations efficient while you scale. You might still need to add more team members as you grow. But, by using Outpost, you can keep your team lean and small.
Beyond being able to read and reply to all your marketing messages in one inbox, a tool like Outpost gives functionality like saved templates and auto responses, which are hugely important. “Using email templates and auto responders is a really big part of building a scalable business,” says Jim. “Using email templates in a tool like Outpost allows one staff person to handle hundreds of emails per day.”
Using complementary tools to help automate and streamline processes also gives sellers better visibility into what is happening inside their businesses.“Sellers can have Outpost open on one screen and Channel Spyder open on another screen,” says Jim. “They can have the visibility into their orders, and visibility into their communications. Management can standardize responses for consistency and quality control with buyer communications coming from multiple different staff people.”
Respond quickly and completely to email messages
When you’re selling on eBay and Amazon, you don’t have a ton of opportunities to interact with your customers.
But what about when they reach out to you with a question or concern about a listing, or want to return a purchase? Responding quickly and making sure your emails are clear while still containing all the necessary information is essential. Plus, it’s sometimes required in order to earn the status of top seller. One of the best ways to build trust is to make sure you’re easy to reach if something goes wrong with their purchase.
Your response time doesn’t just help you get good reviews and provide an enjoyable customer experience, though. To become a top seller on eBay, for example, you need to be able to resolve all cases. So, if a customer has an issue (for instance, if they ordered the wrong part), you need to be able to resolve it for them—quickly. “You need to make sure that you do not have any cases closed without seller resolution,” says Jim.
“Quickly” isn’t just a general idea here—with eBay, you have 24 hours to respond to the buyer’s complaint. Similarly, Amazon Seller Central’s Performance Metrics determine a late response as any response longer than 24 hours. “So, the buyer says, ‘Hey, you shipped me the wrong part,” and you have 24 hours to reply,” says Jim.
Here again, Jim highlights the value of using email management software that puts all your email messages in one place. “That’s where Outpost comes in handy, because it’s bringing everything together,” he says. “You don’t have to worry, ‘When was the last time I logged into this store or that store?’ Outpost gives you all the messages with the time they came in. You know exactly how old all your messages are in virtually real time.”
To speed things up, Jim recommends creating saved template responses to common questions or concerns that can be sent out immediately when a customer has an issue. “You want to have templates ready and staff trained to use them, so messages can be read and replied to quickly and efficiently,” he says. “Buyers get their answers quickly, and store ratings stay high.”
Another reason email is the preferred customer communication method? Having your responses in writing is especially important in marketplace sales.
“It’s encouraged by the marketplaces that you document in writing all of your communications with the buyers,” says Jim. In case there is a defect or an issue, it’s necessary to have documentation. So, building your customer service process around email and having a replicable system of reusable templates not only helpful when it comes to saving time, but also to protect your business.
For these reasons, Jim recommends using email as your primary customer communication tool. “Avoid going to the phones if you can. Email is not only more time efficient, but it’s also preferred by the marketplaces for any conflict resolution, should they need to step in,” he says.
The real competitive advantage: Using technology to create the efficiencies you need to scale
Ultimately, Jim says it’s important to be open to new technology to help you scale your ecommerce business. It’s the most important factor that can predict the success of a marketplace business.
“When it comes to online and marketplace sales, the competitive advantage comes from a willingness to work with all available technology,” says Jim. “The sellers with an aptitude for using technology have the potential to do well and compete with the big players online.
“I would say to anyone who is already in marketplace sales and wants to scale their business: Start with a willingness to look forward, see things you’ve been doing for years, and learn new ways to do them.”
Editor’s note: Thanks to Jim Sinclair of Channel Spyder for contributing! Jim can be reached at 800-898-1049.