e-skills UK Guide
Selling online
How to sell through e-auctions and other web sites
Imagine having instant access to a huge marketplace through the click of your mouse. For some small businesses this has become a reality as they established a route to market through the online auction providers. These sites produce a low cost infrastructure for selling products that would have been unheard of a few years ago.
If you are interested in selling online using your own web site, rather than an online e-auction site, then you may be interested in the Online transactions and Designing a website Guides.
Selling products online can help a small business make money.
What is an online e-auction site?
An online e-auction site is a web site used for the buying and selling of goods and sometimes services. Probably the best known site is Ebay but there are a large number of other sites, many of whom provide a service for a particular buying or selling community. It will always be a good idea to research the various sites to determine which one would be of most benefit. A good idea may be to see where your competitors are being successful in selling their products and follow their lead.
The site will normally allow you to place a description and photograph of your item. You then place the item up for sale and allow people to either buy it immediately or take part in an online auction and bid an appropriate price. Most items have a final sale date after which the item is removed from sale. This can be a useful tool to help drive the bidding process.
Most of these sites will charge a product listing fee, followed by a % of the final sale price if you have been successful. If setting listing and selling products is too time-consuming for you then some sites offer a “trading assistant” service where someone will list and sell your products for you, for a cost. This is probably not a suitable service for small businesses.
Small businesses that find e-auction sites successful can also build their own branded sites that use an e-auction site to provide the selling facilities. We talk more about building your own selling sites in the Online Transactions and Designing a website Guides.
e-auction sites that may be of interest to small businesses include;
Will an online e-auction site work for me?
Many small businesses use these sites as their exclusive route to market. You will need to assess whether this is practical for your business.
The sites are ideal for products that are;
- Non-perishable
- Can easily be dispatched by post or courier
- Are priced cost effectively
- Are likely to be bought by an online customer
Although some people sell high value items through such sites, including motor vehicles, most of the products are fairly low value. You will also need to think about your customer community. If you are a plumber you are unlikely to be able to sell your services via an online auction site. If on the other hand you are selling stuffed toys or books then these sites may be ideal. In addition you need to consider how many of your customers are computer literate and will be likely to buy from you using the web.
How do payments work?
In theory there is nothing to stop you accepting payments in the form of cash, cheques or credit cards if you have a suitable merchant account. Unfortunately cash and cheque payments have been subject to fraud and abuse, with either going missing or cheques being cashed and goods not being sent or received.
Instances of abuse have lead the leading sites to use a third party payment scheme, the most popular being PayPal. This acts in a similar way to a credit card payment but enables the buyer and seller to monitor each others behaviour and transactions can be stopped if there are disputes. This is a charge for using this type of service.
It is suggested that most small businesses will probably be better with establishing themselves a credit card payment service. This will give your buyers a sense of security, as you will need to be endorsed and reference checked by a company offering a card merchant service. Credit cards also give the purchaser a degree of payment protection and enable the seller to process the transaction and take payment electronically, as money is credited straight to the seller’s bank account.
Here are some providers of credit card merchant services;
Selling online: Fraud
Unfortunately it is a fact of life that anytime you sell products online you are possibly going to be subjected to an attempted fraud. Small businesses need to be aware of this problem, but put it into context as fraudulent transactions make up a very small % of the overall successful online transactions.
Some auction sites enable you to establish a seller’s reputation, as they allow a customer to establish a buyer’s reputation. This is a way of building virtual, online trust. Be warned though, it has been known for fraudsters to purchase a high ranking as a buyer using online sites, so there are no guarantees!
Credit card providers will regularly provide their merchants with hints and tips to avoid becoming a victim of fraud, and there are some steps you need to undertake as a merchant to protect yourself. Probably the simplest is ensuring the delivery address is the same as the one registered with the payment card.
One of the commonest problems is someone paying for a product and then denying having received it. Unfortunately it is very difficult to prove either way. I good idea is to use registered post for medium value items and a courier for higher value items. That way you have an audit trail of signatures to check delivery, but these services will cost you a bit more.
Ultimately you will need to consider how you would deal with a “lost” delivery, bearing in mind customer satisfaction issues with genuine customers. Don’t forget, it is your reputation at risk and the internet provides a very quick way for complaints to become very public.
Equipment needed to sell online
You will need to have access to a computer linked to the internet and world wide web. To find out more about how to set this up take a look at the Getting your business online Guide. Note that if you are running a small business as a side line and have access to computers at your regular employers premises you may be in breach of company policy by accessing e-auction sites whilst at work. In addition some corporates will actively block access to e-auction sites preventing access.
It is possible to sell online using facilities provided by internet café outlets, but this would be a very inefficient way of managing your business and should only be resorted to in an emergency.
It is also strongly advisable that you have access to a good quality digital camera, linked to your computer. This will enable you to take photographs and place them on the auction site.
Selling online and computer security
We have already discussed the fraud implications of selling online. You will also need to review the computer and infrastructure that you are using to connect to the e-auction site and ensure that you have in place all of the latest security tools and patches. Never reveal your seller’s password to anyone, and be very careful about emails purporting to come from the e-auction site requesting your password. These are fraudulent emails and this is a scam. Never respond to these emails.
We cover small business computer security in a lot of detail in the following Guides - Computer Viruses and Malware, Protecting Important Data and Securing Computer Data. We suggest that you read these before selling online.
What Now
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