Your eBay & eCommerce Questions Answered (#2)

Another week has gone by and that means another round of eBay and eCommerce Q&As, where I answer the top questions from my readers this week.

In today’s post I’ll answer following questions:

• How much money I need to start importing from China?
• Does Easy Auction Business works in Australia?
• How to position & sell PREMIUM quality products on eBay?
• Branded packaging – is it worth the hassle?
• 3 Ways to increase your customer satisfaction on eBay!
• Is VAT being charged on both branded and un-branded goods?
• Can I ship goods directly to customers from China?

If you have a question you would like me to answer, you can get in touch here.

Please note: I do not edit your questions so there may be a few grammar mistakes here and there, especially in questions sent in from non-native English speakers.

Let’s get started!

Firstly thanks for all the advice and info you put up online. I love the blog and have learnt more on here than I could imagine.

My question is probably not the most exciting however I would love to hear your honest opinion.

I have spent the last few years trying different business ideas and although I have not earned millions of pounds I haven’t lost out. Most of my experience has been gained from buying and selling at auctions along with a few e-commerce ideas.

I currently work full time in a decent paying job that I generally hate and I would like nothing more to build a small empire that can replace my current wage so I can quit.

My plan is to import from China and sell on the UK/European market (I know there is thousands of others doing the same). I have researched some good non branded products, checked sales patterns in the UK, made contact with suppliers and freight forwarders, ordered samples and researched some more.

I am ready to place my first order and I have a small amount of finance.

My question is how much finance is generally needed to satisfy the cash flow? I know it is a bit of a ‘how long is a piece of string’ question but I am just curious as to a ball park figure for setting up a small import business?

I’m afraid it really is a question of “how long is a piece of string”…

There are people who start importing with just a hundred pounds and there are others who start with tens of thousands. The amount of money you can invest in stock doesn’t necessarily guarantee you success BUT it plays a very important part for several reasons:

1) When you have a very small budget, you’re limited in what kind of products you can import. A small budget means you can’t really use sea freight cost-effectively and this rules out all bulky items. With a budget of less than 1000 pounds your only option really is to look for very small, ideally lightweight, items that can be sent via courier services.

2) Buying power. This is obviously the most important thing. You see – the way most big eBay sellers operate these days is:

• They identify a good product;
• Import it from China in real bulk DIRECTLY from manufacturers;
• Sell them off on eBay using a GTC listing, building up a huge sales history and ranking well on eBay’s first page of search results.

Now, to order any product directly from the factory and secure the best possible price, you have to order in real bulk. This will vary greatly based on what kind of products you’re sourcing but in general, for very cheap items (few pounds), we’re talking about thousands of units. With more expensive items it can be a few hundred but still, you’ll need at least a couple thousand pounds to invest in stock.

The more you buy in China, the lower price you’ll get.

One way to avoid this dilemma is to use trading companies instead of factories. Trading companies, though having higher prices, will deal with much smaller quantities, often with MOQs of just 1 or 10 units. This is a good way to start importing from China even if you’re not able to order the huge quantities required by factories.

All in all – the more money you can invest in stock the better BUT even if you don’t have huge capital to work with, you can still:

a) Start an importing business with small/cheap items.

b) Use a trading company instead of going directly to the factory to get lower MOQs.

When your business grows, your buying power will too and you can then switch to factories to get even lower prices and improve your bottom line.

I am very interested in your Easy Auction Business product and need some information from you.

I noticed you’re in the UK I am in Australia – what differences are there for me here? I know the Internet is worldwide and your tips and method are possible the same across the board but prior to making a purchase of your product I wanted the insight from you and confirmation that our method will work regardless.

I appreciate your time and advice.

My EAB course really does work worldwide. As long as you have access to an eBay marketplace and can use PayPal, you can use my system to build a profitable eBay business.

Australia is a very interesting market as it’s kind of isolated in terms of suppliers/wholesalers, which is a good thing! From the research I have done for my Australian 60DBP customers, many niches are still un-saturated in Australia and have very decent margins.

It’s similar to the US to UK comparison with the difference that in the UK competition is bigger and there are not that many un-tapped markets left.

Sure, Australia is a much smaller market in terms of population, but still – it’s more than enough to turn most niche businesses into a full time venture.

I would recommend you get a Terapeak subscription (they have data for Australian eBay too) and just start doing some research. A good starting point would be to analyse the BEST SELLERS in the US and UK and see how well they perform in Australia.

My EAB course will guide you through this process step by step! Once you have identified a potentially profitable niche/product, you’ll then learn how to source these products from China, the US or any other country that suits that particular product.

To sum it up – the system works in exactly the same way in then UK as it does in Australia. If anything, EAB will work even better in Australia as there are many more un-tapped niches to explore! The only real difference would be in terms of tax rules but you can learn more about that from some local resources.

First of all would like to thank you for such a great information source, your website. Some articles I found very helpful, and easy to implement into the business.

Would like to ask your advice, and would really appreciate your help in the beginning of the successful way for our company.

1. As we will be selling European product on eBay, would like to know what do you think the best strategy to go into the market with product no one offers, in terms of brand and quality. There are plenty of low quality products out there, but we have 100% Italian or French made products, with high quality and uniqueness.

2. Did analysis of market, sales, product and so on. But will little extras, for example colour bubble mailer/draw attention immediately, thank you sticker, etc make a difference? Does it make sense to make packaging stand out from competition even it will double the cost of supplies?

3. What 3 things you can suggest to invest money into that will put a smile on customer’s face when he/she received the product?

Thanks for your questions!

1) You want to make sure that you say it loud and clear – this product is PREMIUM quality, made in Italy and NOTHING on the market compares to it. Point this out in both the listing title and description.

Product pictures will play a big role in this so make sure you get super high quality images from your manufacturer/supplier.

If that’s not possible, outsource product photography and get professional pictures taken. The final images should look almost like they’re from an Apple iPhone ad – that good.

Compare the quality of materials and functionality with Chinese, and other brand equivalents. Do it inside your listing description, using side-by-side images, text and tables. So that people instantly SEE the difference!

If possible, offer an extended warranty for your product – this instantly says that you’re confident about the quality of your products and the price is higher for a reason.

2) IF you plan on creating a long term business here, with repeat customers, your own online shop and so on – then even the packaging does matter, yes. Premium class products require premium packaging… if not premium – at least good quality, standard packaging but definitely NOT something cheap!

If you’re after one time sales, this, of course, doesn’t matter that much.

3) Another great question! I’d say that anything that surprises a customer, in a good way. Usually it’s a free gift that goes along nicely with the product ordered so anything that complements the product. So yes, a free gift definitely works, even if it’s simply some candy!

Check out my FREE Gifts on eBay guide here for more information and tips.

Then of course – packaging and the way everything is presented (clean, no odours, invoice included etc.) are important in creating the impression of a premium product.

Lastly, next day delivery also helps keep your customers satisfied! Especially when they make an order @ 2PM and receive it the following morning. Everyone likes to be treated well, even eBay buyers, so make sure the service you offer is always one step above the competition.

Hello Andrew,

Just an easy question, is it for all products VAT has to be paid even if the product without brand? For example electronic spare parts?

Thank you!

Yes, it doesn’t matter whether the product is branded or unbranded, you still have to pay VAT and import duty.

There are some product groups (like kids clothing) that are VAT exempt, which means you won’t have to pay VAT on your imports. Read more about VAT except products on HMRC’s website here.

Hi Andrew,

I read through your information, great read! I wanted to make sure I wasn’t missing a step.

I located a wholesaler in china with goods I want to purchase. I am starting my conversation with a fulfilment centre in China which charge for shelf space and roughly $2 for each item they are going package and ship.

The fulfilment centre will send it directly to the lucky auction winner/buy it now purchaser. There shipping appears to be cheaper than if the products ship to me and then I ship to purchaser.

If my LLC is in The States but I purchase the products from china and ship form china, what kinds of taxes am I responsible for. Assume all products are under $20. Do you see any flaws in my strategy or anything important that I might have left out?

Yes, unfortunately there’s one BIG flaw in your plan – customer satisfaction.

On the paper it all looks good but with 99% certainty I can guarantee you that you’ll run into the following problems:

1) Mistakes made by the Chinese fulfillment centre. Wrong addresses, wrong products sent out etc. Even the best automated UK/US fulfillment houses will mess things up from time to time but when you do this in China, chances are it will become a real issue, especially when you take into account the expense such situations create.

2) Long delivery times. If you can use EMS or another courier service, this won’t be a problem as these services deliver goods from China to USA in 3-6 business days. But if they’re cheap/small products and you plan to send them via China Air Mail, think again about how that will affect your buyer’s experience.

China’s postal service can take up to 30 days to reach USA PLUS expect many packages to go missing during transit as they’re not trackable.

The only reliable and cheap way to send small packets from that part of the world is to use Honk Kong Airmail. It’s way more reliable compared to China post and delivery to USA/Europe usually takes around 10 business days or less.

So if you can find a fulfillment company with high working standards in Hong Kong then your plan would probably work out. If not, I wouldn’t risk executing this strategy, as you’ll simply lose your eBay account due to the amount of negative feedback you’re bound to receive.

Not talking about all the customer support hassles you’ll be dealing with! “Where is my order?” will become your most heard phrase!

That’s it for today! I hope some of these questions & answers help other people too.

If you have something specific to ask, get in touch with me here!

Thanks,
Andrew.