Running a Consignment Business on
eBay
Running an eBay consignment business is just like running your
own auctionswith the additional responsibility of finding clients who have
merchandise they want you to sell. Let's take a look at what a typical
consignment business involves.
Finding Clients
To sell items on consignment, you first have to find some
clients. Now, if you have a drop-off location, you can sit behind your counter
and wait for your clients to come to you. (Although a little advertising and
promotion probably wouldn't hurt, of course.) If you're running your consignment
business out of your home, however, how do you obtain new clients?
Note
Many consignment sellers try to avoid reselling low-priced
items, for the simple reason that there's not enough money in these transactions
to make them worth their while. eBay recommends using a Trading Assistant for
items over $50 only; other TAs set their lower limit at $100. Whatever limit you
set, you don't want to waste your time selling a lot of $5 and $10 itemswhen you
could be reselling items for $100 or more.
First, you should make your business known to other members of
your community. Get some business cards made and pass them outand don't forget
to tack them up on any bulletin board you find. Consider advertising in local
newspapers, if the rates are affordable. And remember to talk yourself up to
everyone you meetword-of-mouth is often the best promotion.
You'll probably need to do some targeted hunting for business.
Make up some flyers and hand them out to anyone running a garage sale or yard
sale; there's always something left at the end of the sale that you could sell
on eBay. Another good source of consignment business is small businesses and
manufacturers in your area. Almost every local manufacturer or business has
liquidated, refurbished, or returned products it needs to somehow dispose ofand
you can help with this problem. You'd be surprised how eager these companies are to get rid of old merchandise just taking up
space in their warehouses.
Finally, make sure you're a registered member of the Trading
Assistant program so that you're listed in eBay's Trading Assistant Directory.
This directory is the way a large number of customers find a Trading Assistant
near them.
Advertising Your Business
Online
You should advertise your consignment business in all your
regular eBay auctions. You can do this by adding eBay's Trading Assistant
button, as shown in Figure 13.2, and
linking it back to your eBay Trading Assistant page. To do this, you'll need to
know your Trading Assistant number (found at the end of the URL for your TA
listing) and a little bit of HTML. Here's the code:
=XXXXX">
  border="0" height="33" width="88">
Replace XXXXX with your Trading
Assistant number, and the button will be added. Anyone clicking on the button
will be taken directly to your eBay TA page.
You can also advertise your TA business on any web page you
might have, using eBay's Trading Assistant logo, shown in Figure 13.3. Just add this code to your web page:
Again, replace XXXXX with your Trading Assistant number, so
anyone clicking on the logo can go directly to your eBay TA page.
Taking Possession of the
Merchandise
When you agree to sell an item for a client, you need to take
that item into your possession. You're in the consignment business, after all;
you need to have the item in your possession in order to sell it. Plus, if you
don't have it, you don't know for sure that it existsor that your client hasn't
disposed of it elsewhere. Remember, it's your name on the eBay auction; you'll
be held responsible if the item isn't actually available for sale.
If you're running your consignment business out of your home,
you'll probably make your initial contact with a client over the phone. One
phone call is all it takes to get a feel for the client, find out what he or she
wants to sell, and determine whether it's worth your time. You should also take
this opportunity to tell your prospective client about you and your business,
discuss fees, and work out any other details. Then, if all goes well on the
phone, you can arrange for the client to drop off the merchandiseor for you to
pick it up.
While you can try to get all your clients to drop off their
items at your home, chances are you'll have to do some merchandise pickup
yourself. Going to a stranger's home can get a little dicey, so you'll want to
play it as safe as you can. If you have a relative who happens to play football,
take him along with you. Otherwise, judge the location carefully, and if you're
at all nervous, arrange to meet the client at a neutral (and safer) location,
like a local coffee-house or fast-food joint.
Managing the Auction Process
Once you have the merchandise in your possession, selling it is
just like running any auction. You'll need to do a little research to learn more
about the item and determine the appropriate starting price. You'll also need to
photograph the item and write the item listing. There's nothing special you need
to do at this point.
Note
You don't have to accept everything that your clients want you
to sell. It's okay to turn away goods that you think you'll have a hard time
selling or that you think are worth considerably less than the client doesor
that you think may have been obtained illegally.
Packing and Shippingand Settling
with the Client
At the end of the auction, you receive
payment just as you would with any other auction. (The payment comes to you, not
to your client!) Then you pack and ship the item, and get ready to settle things
up with your client.
Once you've received payment from the buyer, you need to figure
your fees and create an invoice for the client. Start with the final selling
price, subtract your commission, subtract all the eBay and PayPal fees, and the
balance is what you pay the client. If it's an occasional client, cut a check
right then (or within the time frame specified in your contract). If you have an
ongoing relationship, you may want to arrange payment for all that client's
auctions at the end of each month.  | 
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