A seller’s guide to better ROI on Ebay

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In any business getting a good return on your investment is crucial. Selling on eBay is no different. Once you’ve invested your money and time sourcing products, creating listings and marketing them, you naturally want to maximize your return.

When it comes to improving your ROI, there’s two main ways to go about it. The first is to cut your costs and the second is to find ways to increase your revenue. In this post, we’ll look at five areas where you can do just this and improve the ROI for your eBay business.

#1 Source Smarter

When it comes to sourcing your products, it’s a fine line between getting a good per unit price and sourcing quality goods. A common mistake that sellers make, is to source from the cheapest supplier, thinking this will give them the best ROI. But, in reality, the cheapest products can sometimes cost you more. They can be riddled with product quality issues and the stock that arrives may not even be what you ordered.

So the first tip for sourcing products that are going to give you a good ROI is to go and see them. Don’t just source products online. Get over to China, visit the trade shows and get hands on with the products. Then, if you have time, travel on to the factories and see how they operate. This is going to help you make a far more informed decision on who to source from. It should also lower the risk of sourcing poor quality, costly products.

The second thing this does, is help you build a bond with your supplier. If you show that you’re professional and willing to take the time to meet, they’re going to be more receptive to negotiating with you. This means you might be able to lower their MOQ’s or even be able to get a better bulk discount. This in turn, brings down your per unit cost, giving you better margins and hopefully a larger return on your investment.

Read more about Product Sourcing right here!

#2 Reduce Your Costs

When you’re trying to increase your ROI, it’s not just a case of increasing your revenues. In fact, you can increase your ROI just by cutting your costs. It can even be the easier way to go, especially if you find an area that’s needlessly eating into your profits.

There is also plenty of areas that you can look at. You could look at fulfillment and see whether your method is the most cost effective. For example, if you’re using FBA to fulfill your eBay orders, you could work out whether it’s cheaper to use a 3PL (thrird-party logistics).

If you’re using a 3PL, it can be confusing. There’s loads of individual costs to consider and 3PLs all have different ways of pricing – by pallet, by square foot or by the number of units. If possible, try and estimate which pricing method will come in as the cheapest, and find a 3PL that operates that way.

This shouldn’t be at the expense of finding a reliable service though. A small saving and professional service is far better than a large saving and a barrage of late delivery complaints!

Another aspect to watch, is your return rate. It can be really costly to keep having to pay for return postage or have to give away products for free because of product quality issues. Some great advice on these points is to make sure that your listing is accurate and clearly explains what buyers are getting – no surprises or cause for dispute. As we covered in point one, sourcing well should also keep your wastage and returns costs down.

A final cost, and an especially important one for eBay sellers, is PayPal fees. Some sellers don’t realize that PayPal offers Merchant Rates, which you have to apply for. These are based on the amount that you sell and offer a reduced fee per transaction. For large sellers, this can even half the transaction fee – a big cost saving.

#3 Optimize Your Listings

When you create your eBay listing, the most important thing is that customers can find it. There’s no point having a great product if it doesn’t show up for all of the relevant terms. If your listing ranks high organically, then your ROI should improve. You should have more customers viewing your products and, if they convert well, more sales. 

So how can you achieve this? Well, the first step is to use an eBay keyword tool, and generate a list of relevant terms. You can then whittle it down to the four or five most important terms, which you should add to your listing title and product description. Then take care to fill out the item specifics fields accurately. This way, when a buyer filters the search results, your product will still appear. Ebay has a list of tips here, detailing how to optimize a listing for “Best Match”.

Accompany your listing should be three or four high-quality images. While these won’t have an impact on your search ranking, they will make your listings more attractive to buyers.

When you’ve finished optimizing your listing, you need to run it for a least two weeks, and then compare its performance. You can do this in the ‘eBay Listing Analytics’ section of your eBay seller account. Ideally you want to keep tweaking your listing until it ranks well organically and also has a high conversion rate.  

#4 Sell Abroad

Once your products are listed, it makes sense to get them in front of as many eBay customers as possible. That’s why it’s worth considering the Global Shipping Program. It’s a simple way to test the international waters and see if there’s demand for your product.

The process is very simple. You first need to enrole in the program through your eBay seller account. Your listings will then be shown on eBay’s international marketplaces. You also have the choice to exclude countries that you don’t want to sell to.

This method helps increase your ROI because you should be making more sales, so creating more revenue, without any real increase in costs. It could be especially good for slow moving stock, as it allows you to put it in front of a new audience, who may be more receptive to it.

eDesk has a built-in auto-translate feature that allows for seamless communication with overseas customers.

#5 Make the Most of Good Feedback

When customers buy products online, the only indication of how reputable you are as a seller is your feedback. The better your feedback, the more attractive your product offering. Likewise, having a low amount of feedback, especially if it’s bad, is likely to lower your ROI. You’ll have invested in stock but your poor reputation is going to put buyers off.

It is also interesting to consider the role that feedback plays in the algorithm behind eBay’s Cassini search engine. If it’s true that it does take the quality of feedback into account, then having a large amount of good feedback is going to be important in getting your product to rank well organically in search.

The problem with eBay though, is that the amount of sellers that leave feedback has decreased over time. This means that many sellers choose to use software, which gives buyers a gentle nudge in the direction of leaving feedback.

eDesk goes beyond this though. It allows sellers to only ask for feedback in certain situations, lowering the chance of negative feedback being left. It could be that you only ask for feedback on your best selling products, or those that have a good record of receiving five star reviews.

Equally, you can avoid situations where negative feedback may arise. This includes having the ability to blacklist buyers that have left negative feedback in the past. 

The Bottom Line

Increasing your ROI on eBay is not as difficult as it sounds. As you can see, you don’t have to make radical changes to your business. Instead, it’s a case of doing what you’re already doing, but just doing it smarter.

It’s very likely that you won’t need to take all of these steps to see your ROI increase. The best course of action is to choose a step, focus on making positive changes and when you’ve optimized it to a point of increasing revenue, move on to another one.

Alongside this, it’s well worth assessing your costs, as you may be able to make crucial savings that will have a direct impact on your ROI.

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