Transcript Using Business Intelligence to Increase CLV

The Turnover Principle
Step Three:
Strategic Selling!
The Turnover Principle
Investigate to find out
what sells and the
profit you can make
Sell consistently
and stay ahead
of changes in the
market
Find products from
reliable suppliers
with maximum
profit margin
Selling Should Start with STRATEGY!
1. High Volume: Listing Success Rate (LSR)
Strategy: A higher volume of sales yields greater profit in the long
run, even if the profit per listing is less. This strategy is great for
bulk items.
2. High Profit: Average Selling Price (ASP)
Strategy: A greater profit per sale yields greater overall profit in
the long run, even if the conversion rate is lower. This strategy is
great for small inventories or less common items.
3. Balanced: LSR x ASP
Strategy: This strategy tries to strike a balance between
increasing conversion rate and earning more per sale in order to
get the greatest profit in the long run. This strategy is great for
selling common items at non-bulk rates.
Strategic Selling Tips
• Expand Slowly and Cautiously
– Some sellers on eBay readily attempt to sell anything you can imagine,
however, it is often more profitable to focus in on something that you can
specialize in and do better than any other seller.
•
Gauge Product Demand
– Demand is the key to eBay business profitability.
– Timing is extremely important.
– Learning to pick a hot product before it becomes hot is a valuable skill that
comes from knowing that market. (Research, Research, Research!)
– High demand and low supply translate into higher prices. As demand
increases, supply will eventually overtake it and prices will gradually move
downward. At the end of a product’s popularity, liquidation stock in the market
will cause prices to basically bottom-out. This will happen very fast, often in a
matter of weeks not months or years.
More Strategic Selling Tips
• Gauge Product Supply
– A careful analysis of the competitive landscape is always important before
jumping into a new market. If the market is already saturated with sellers who
have better pricing and access to product than you, you may want to look
elsewhere for more profitable business ventures
• Marketability
– Clearly it won't matter what products you sell if your customers aren't buying.
• Profit Margin
– The best selling products won't earn a seller much if their margin is too small.
• Some questions to keep in mind while selecting products for resale.
–
–
–
–
Would you buy it and use it yourself?
Can you see yourself getting excited about this product or service?
Would you sell it to someone you know?
Is there a real need for the product in today's market?
Selling Strategy Building Blocks
Best
start time
Buy-it-now
Highlight
Bold
Keywords
Shipping
options
Best
ending time
Best
listing
duration
What is the Selling Strategy of My Competition?
Analyze market factors and individual sellers in
each category that have captured a large share
of the market with fewer listings and then:
• Imitate
– Follow best practices that are working well
• Innovate
– Use research to surpass average market successes
– Use research to anticipate market changes and react
quicker than the competition.
Track Your Product Life-Cycle Changes
Demand
Early
Life-Cycle
Middle
Life-Cycle
Late
Life-Cycle
High
Decreasing
Low
Supply
Business Implications
Low
Product is very expensive early on in the product cycle,
but if your sources can get you sellable product with a
window of opportunity before it is available to the general
marketplace, some of the highest margins to be made on
eBay are to be made here.
Increasing
Selling here is where most traditional businesses
compete. Higher margins come from efficiency, good
supply relationships, and volume discounts. Sellers must
constantly be aware of the upcoming shift to the end of
the product life-cycle
High
Selling here is tricky, risky, and timing-intensive. The goal
is to buy product in volume just as it hits liquidation
channels but before demand has dried up as the result of
market saturation or the public's anticipation of the
replacement product.
Generate Strategic Selling Goals
Profit Margin
• BEST
• BETTER
• GOOD
Volume
Communication is Key to Long Term Selling Success
• Start with accurate listings, efficient
shipping, and fast response time to
queries
• Create a professional “About Me” page
and direct customers there
• Create a professional Webpage and
direct customers there (links to a webpage are
allowed from your “About Me” page but not from your
listing)
Customer Service is Another Key to Long Term Selling
Success
• Answer questions in 12 hours or less
• Use timely invoicing procedures
• Expedite shipping & feedback
• Establish clear, fair policies (e.g. returns, warranties
guarantees)
• Offer options whenever possible (payment/shipping)
• Communicate, communicate, communicate!!!
Takeaways of the Turnover Principle:
Correct Implementation of the Turnover Principle will allow an eBay seller to:
– Remove the guesswork from selling successfully on eBay
– Understand the market they compete in or hope to compete in
– Make and implement effective strategic decisions
– Develop on-target business plans & strategies
Researching, sourcing and selling is to
remove the chaos of running an eBay
business and replace it with sound
strategies!
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