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Bonanza | Red Ink Diary

Posts tagged “Bonanza”.

The Early Bird Catches the Worm

It is that time of year again, the last lazy days of Indian Summer beginning to be overtaken by chilly evenings and crisp mornings that say winter is coming.

As of today we are 57 days away from Black Friday, November 26th, traditionally the day in which retail stores hope to make enough sales to put them “in the black” for the season.

Bearing in mind that online seasonal sales often start to pick up in October, ideally you should be well into preparations for the (hopefully) busiest season of the year.

I like to target September 30th as my completion date, This gives me time for corrections, fix-its for omissions and fine tuning my listings. This year I am behind, but working on it.

Look!

Check your inventory! Be sure to physically locate old stock items you have listed. It does you no good to make a sale and have to refund your buyer because you can’t find it.

Check your inventory of packing supplies: labels, tape, bubble wrap, padded envelopes, business cards, any enclosures used, boxes (free from USPS) and envelopes, ink etc. Your suppliers are keeping stocks at lower levels than normal, due to the economy, just like you are. Make sure you have enough to get you through the season.

If you need to place a top up order on seasonal items, do not dally. Choice is already limited and inevitably there will be shipping delays.

Revise your pricing, make at least four searches, Google, Google Shopping, (these give different results because Google Shopping results are from submitted feeds) Bing and eBay. Note comparable prices, including shipping, and also the number of returns you get for the different search terms you use. Apply this knowledge to your titles and the first 150 characters and spaces of your item description. Remember prices may need to move up as well as down.

Stop!

If you sell on your own website, for maximum SEO, you should suspend listings you are reworking from your feeds for at least 24 hours. Most search engines give preference to fresh listings, merely duplicating does not work as well as rewriting everything from the title down.

I like to work from the oldest listings to the newest. On Bonanza you can do this very easily by selecting ‘display newest’ and going to the last page.

Bonanza has improved the ‘duplicate listing’ function in the ‘edit your listings’ screen since last year. The traits, tags and attributes now duplicate also, this is a good thing! Another improvement is that the duplicate listing becomes the newest listing, so once you have checked that it actually has duplicated (don’t ask how I know this) you may delete the old one and go to work on the new one.

The Google

Google is enforcing their “no duplicate listings in feeds from one merchant on multiple venues” rule. Giving your items different titles, prices and descriptions will not fool them. They will suspend you. Pick which items you want to sell on each specific venue that submits feeds and do not duplicate.

Any additions to the checklist will be welcomed in the comments!

Y’all come back!
Henrietta!

Dealing with Change

In my last post I summarized fee changes on my primary sales venue which I believe will impact my business. Like many people I really really do not like change. If I allowed myself, this aversion could lead me to make changes to my business on an emotional basis. This is not a good way to do business especially in a difficult economy.

A girl and her dog examining the books carefullyI need to know where I am going before I can start planning a trip. Running a business is no different.

You need to have a plan but just having a plan is not enough, things rarely go the way you want or expect them to. It is so easy to make a plan stuff it in a file and then go off and do your thing but the smart person will reassess their business and their plan on a regular basis. That way you may be able to prevent unpleasant year end surprises.

If you keep detailed books you can see where you have been, those same books can give you some insight as to what the future holds but it is important to understand that insight does not equal a crystal ball.

Step One - Set Goals

  • Assess impact of fee changes
  • Find ways to cut costs & increase margins
  • Look at pricing
  • Increase sales!

Step Two - Assess impact of fee changes

I made a copy of my accounting spreadsheet for this year, adding an extra column showing how the new fee structure would have affected my business if it had been in effect all this year.

This is not a perfect strategy because there are assumptions involved. The ratio of sales volume from Amazon, Bonanza and my website may change. If my website sales increase there is no fee impact. If my Bonanza sales increase I will pay fees but a sale is a sale is a sale.

There is no guarantee next year will be a replay of this year but it is a good rear view mirror and much more objective than relying on emotion colored by my inherent aversion to change.

Now I have facts, not guesses. At my average sales price even if every transaction had incurred a fee I would have paid less in FOV with the new fee scale. My gut instinct that this was a huge increase was wrong.

How about that?

Y’all come back!
Henrietta!

Bonanza, Is The Honeymoon Over?

diecut and embossed Victorian bride and groomOur third anniversary was in July so the honeymoon is probably over. We get along pretty well although there are the usual petty irritations which arise in any relationship but so far nothing serious enough to contemplate leaving. However, at the beginning of this month, September, there have been changes which will require a rethink of the way in which I have been doing business on the site.

The next few posts on Red Ink Diary will detail my thought processes as I assess and execute my revised business plan.

A little over two years ago I wrote about the constraints of my business. I said

“Because I live on an island my choice of product is limited. I must pay freight on anything I buy to sell unless I drop-ship. Freight alone can eat profit margins. What I have sold for years is low ASP (Average Sales Price), but lightweight.”

Back then I sold greeting cards, die cuts for decoupage etc. To make a long story short, the change in peoples’ mailing habits and corresponding decrease in sales made it evident I needed to find a new product line. I have tried several, simultaneously, with varying degrees of success. My best sellers on Bonanza these days are patterns. ASP is $9.00 and to be competitive I offer free shipping within the USA and Canada.

As a charter seller or old timer on Bonanza I have never (in three years) paid a commission or Final Offer Value (FOV) fee on sales under $9.99. Items selling between $10.00 and $50 used to cost me $1 or 2%. This has changed for me as I now pay 50c for any sale under$14.30 just like the vast majority of other (newer) sellers on the site.

Edited for clarity 9/12/2011:
Bonanza does not charge a per item fee. The fee is based per transaction with a minimum fee of 50c. If I sell one item at 99c the fee is 50c. If I sell three 99c items, one $4 item and one $7 item the fee is still 50c.

Please note I am not complaining, Bonanza has no listing fees and the FOV fees are very reasonable. There was plenty of notice of the impending change and there will be no further changes through 2012.

So wheres the beef?

Two beefs:

  1. Bonanza makes no allowance for shipping included in the price. None. Items which charge shipping receive a credit of up to $10 against FOV fees but those shipped ‘free’ do not.
  2. Tight margins on sales, this of course has nothing to do with Bonanza and everything to do with the economy.

Reality check

eBay; due to it’s severely skewed search, high incidence of hinky buyers and ever more complex rules and regulations is not a viable option for my business these days but I still use it as a comparison. Lets do just that.

  • Bonanza is a fixed price venue, therefore my spreadsheet compares sale fees only.
  • Insertion fees for a fixed price listing on eBay would increase costs further.
  • Bonanza does not charge listing fees.
  • Both venues appear in Google product search.
  • Payment processing fees are equal.

Click image to enlarge.

As you can see, for my $14.30 item eBay is 372% higher or $1.86. After adding in the 50c for 30 days fixed price insertion fee eBay’s cost of sale is $2.36 or a whopping 472% higher.

Fortunately there are other options
Y’all come back!
Henrietta!

Welcome To The New PayPal

On November 1st 2010 PayPal’s newly renamed Purchase Protection policy expanded to putatively ‘cover’ buyers no matter where they shop. PayPal is not just for eBay anymore. You can enjoy the protection of the “faster safer way to buy” anywhere PayPal is accepted, from Auntie Zuleika’s tiny website to venues like Etsy or Bonanza.

As you can see, two scenarios are covered, an item is not received or the item bought is ’significantly not as described’, known as SNAD on eBay.

Sounds wonderful!

Buyers can sleep better at night cradled in the beneficent arms of PayPal the Protector (insert superhero background music here.) Sellers everywhere will undoubtedly reap the blessings of increased sales volume from confident and secure buyers. PayPal, aw shucks, will just be happy doing a better job all around.

How can this be a bad thing?

Primarily because for small sellers PayPal functions as prosecutor, judge, jury and executioner. For example, the old empty box scam lovingly detailed below, in which PayPal is unwaveringly likely to decide in favor of the zero feedback buyer while ignoring all evidence to the contrary and an impeccable multi year sales record from the seller.

Add a beautifully written primer (def.#2) on how to scam the system for neophytes (def.#3) to the great game of get something for nothing and a door into a world of grief is opening for sellers on all the venues they fled to from eBay’s punitive policies, exorbitant fees and ham handed micro-management.

The fly in the ointment for buyers, ‘putatively’ explained

It should be noted that these protections do not apply when shopping with the big boys, who would not tolerate this nonsense for a New York minute.

Real buyers, as opposed to crooks, are unlikely to know how to differentiate between the protected transaction and the unprotected. We wonder if they would even know where to find the eligibility requirements. (Look for section 13.2) The crooks already know exactly what they are doing.

For a seller overview or comparison of the three versions of Payflow which are exempted from the Purchase Protection Plan see this Red Ink link. Note that all the exempt payment channels are a la carte subscription models; generally inferior in fraud protection (that is another post) to comparable commercial merchant processing products; but cunningly (def.#1,2,4) priced to entice the unsophisticated entrepreneur.

By an amazing co-incidence, increased merchant movement (where possible) to their a la carte payment processing system will substantially increase revenue for PayPal.  Just multiply a fraction of the number of sellers currently using PayPal by $30 per month ($360 a year), whooo-eee!

In summary
Only you, dear seller, can assess the degree of attractiveness your merchandise has for crooks and only you know the amount of dollar loss you can afford or are willing to tolerate. Other factors for consideration are the alternatives available to you and the cost of those alternatives.

This year we expanded and upgraded our product line and the PayPal loss potential has, I believe, increased in a direct ratio to the increase in ASP.

As a low volume seller on Bonanzle Bonanza and my own website the cost of a standard Merchant Payment Processor is not yet a viable option, nor are they all totally problem free.

I have removed PayPal as an option on Bonanza and will find the money somewhere to have someone install Google Checkout on my Zen Cart. I have been ‘going to do it’ for years, it is time to stop procrastinating and just do it.

Y’all come back!
Henrietta!