Misconceptions surrounding eBay

[seal006]

Advertising is not a catch-all solution though. If I were to advertise, I'd have to drastically raise my pricing which would be contradictory to my goal to offer lower pricing. It's the problem with advertising when selling pennies compared to say gold bricks.

EDIT: Well, I suppose I could drastically lower my income, but then I'd be making so little money, I'd have to shut down. Pennies aren't cheap to come by in bulk.

Ah, now we are finally getting to the heart of the matter. I love the purpose of your business. I love your enthusiasm. Let's face it though, you are a small operation, and you are thinking you have to compete with a giant like eBay. You are not competing with them. How could you. They answer to their shareholders, lots of them. You answer to yourself, and your wife if your married. I refer to mine as the CFO.

You are selling online, therefore you have eBay as the leader. In the brick and mortar world it is Walmart that the small business is overshadowed by. Unlike eBay, Walmart does not offer any solutions that can help a small business. How can you compete with a business that is nothing like yours? You need to stop worrying about competing with them, and you need to embrace them. Do not look at them as an obstacle. Look at them as an opportunity. An opportunity for you to carve your niche' and do it better than anyone else. Give better customer service.

I am starting to feel you are misplacing your frustration. To me, I think you are more frustrated with sellers on eBay. After all, they are your competition, not eBay. When you look at individual successful sellers on eBay, what are you looking at? I would note what things they seem to be doing that is working. In a business like coins, especially cents, there are no wholesale places for you to go to for product. So now you have to identify ways of procuring product as cheaply as possible. You need to look at different ways you market your wares.

I feel for you, because I am a small operation as well. My margins are not great, but I do make money on every sale. I have also learned that eBay is the ultimate advertising tool available to me. I use the heck out of that opportunity every single time I sell an item.

As the old saying goes, "It takes money, to make money." Unless your pockets are as deep as the eBay sellers you are actually competing against you will have to think creatively to get an edge. If you cannot do that, you will have to be satisfied with what you are making, or fold.

[liveandievarieties]

#1 Let's face it though, you are a small operation, and you are thinking you have to compete with a giant like eBay.

#2 In a business like coins, especially cents, there are no wholesale places for you to go to for product. As the old saying goes, "It takes money, to make money." Unless your pockets are as deep as the eBay sellers you are actually competing against you will have to think creatively to get an edge. If you cannot do that, you will have to be satisfied with what you are making, or fold.

I've watched this thread with mild curiosity and while I too could fill 6 pages with my own perspective, I'll just pick a few of the most recent comments.

#1 I am familiar with Dan's operation. When he's got a wholesale order (literally by the ton), he goes through more cents in a week than the combined membership of LCR does in an entire year. If you doubt this, ask him about what kind of volume he handles. What Dan does is anything but small, I believe he's one of the largest suppliers of copper cents in the nation.

#2 Everything I purchase for resale is bought at wholesale prices, EVERYTHING. If I bought my inventory by bidding against the highest bidder (and more than half of mine comes from eBay), I'd be bankrupt in a mattter of months. There's a fortune to be made by buying on eBay. But it's done by utilizing the knowledge that is free to us, much of it found here on LCR. Knowing markets is one way to make money. I know that I can buy this raw variety for X dollars and after slabbing, it will be worth XX dollars on eBay, or XXXX dollars elsewhere. Knowledge of where to find your inventory, what it's worth to others and where and how to sell it is key to success in any resale business.

[seal006]

#1 I am familiar with Dan's operation. When he's got a wholesale order (literally by the ton), he goes through more cents in a week than the combined membership of LCR does in an entire year. If you doubt this, ask him about what kind of volume he handles. What Dan does is anything but small, I believe he's one of the largest suppliers of copper cents in the nation.

Compared to eBay, which is the source of his frustration, he is a speck of sand. Rather than vent about eBay, why not join it. If he is indeed "one of the largest suppliers of copper cents in the nation" then he should have no problem competing. I have looked at his site. He sells copper cents for close to 2 cents each, which means his margin is at most double his money, and that is before expenses. Whereas someone like you or me, we could find a variety worth $20 while searching. That is 2000X what we invested in said coin. In today's business world, it is next to impossible to survive on doubling your money. With the cost of doing business skyrocketing every single year. It all just does not add up financially.

[Maineman750]

100% profit on an item that you have an endless supply of can well outweigh an item that makes 2000% profit if you have to spends hours,days, or weeks to find it. I made what ?, $2600 on a one cent investment, but in the end, Dan is making a living at it, where as I would not be able to do so.
I really don't think any of us know enough of Dan's operation to make an accurate evaluation of it.

[simonm]

100% profit on an item that you have an endless supply of can well outweigh an item that makes 2000% profit if you have to spends hours,days, or weeks to find it. I made what ?, $2600 on a one cent investment, but in the end, Dan is making a living at it, where as I would not be able to do so.
I really don't think any of us know enough of Dan's operation to make an accurate evaluation of it.

That was my thought. How often do you find a variety worth $20 or more? How many cents do you need to search to find it? Selling plain copper and zinc a little bit above face value is pretty easy when you have a pretty much endless supply as Roger pointed out. It is all a matter of preference. Some people make money selling varieties they find, and some make money just selling bulk cents. And both methods create a legitimate profit.

[coincollectingenterprises]

I appreciate everyone sharing their thoughts. It would be nice if I could sell for 2x face value of any copper cent I sold. Not sure where that figure came from. 68 pounds is listed on my website for $163.20 per $100 face value (1.632x face). Bulk orders are cheaper. Time-wise, it is insane how much time goes into boxing these orders up (seriously). Freight shipping makes life so much easier.

In regards to Ebay. Am I competing with Ebay or sellers? I am competing with sellers on Ebay, which therefore means I am competing with Ebay. When you buy something on Ebay, are you looking at the name of the seller or the product, item, pricing, and feedback of the seller? There are *some* people who do stick to the same seller. However, I would speculate most just simply work off of feedback rating and pricing. And if Ebay didn't exist, those sellers would have a rather difficult time competing for search-ability via online search engines.

As far as comparing myself as a small business. That's a subjective term and all I keep thinking of is "there's always a bigger fish" out there. My sales volume of copper pennies sold on a monthly averaged basis is larger than the entire Ebay volume of copper pennies sold on a monthly average basis. Does that make me a big business? I hope that doesn't make people think of me as a conglomerate like Walmart. I like to think of myself as a small business selling small pennies in big sizes

The frustration I've mentioned before is actually not at sellers at all. My frustration is that we live in a world that is so full of untrustworthy people that the concept of "buyer protection" supersedes, for many buyers, the interest of shopping around via the concept of free trade.

Is this an attack on Ebay? Of course not. Is this an attack on sellers or buyers? Of course not. This is just a statement. Yes - Bing seems to like Ebay more. Does Google like coincollectingenterprises.com more? From the extensive research I've done, for most, Yes. But given the extensive quantity of people that have visited Ebay's website and Google's algorithms to rank pre-visited sites higher than sites you have not visited yet, this hinders online businesses that do not have oodles of money to throw at advertising.

Amusingly, there are many times the Ebay advertisements showing copper pennies is actually my own auctions.

Now with all due respect to the idea of embracing Ebay versus competing with them: I refuse to do that.

The Federal Reserve prints unlimited money now via the combined practices of quantitative easing, fractional reserve banking, and infinite mortgage-backed bond buying. Can I compete with the Federal Reserve (which just as a fun fact, did you know the Federal Reserve is actually neither federal or a reserve?)? Of course I can't compete. But I am not going to embrace them just because I can't beat them. In fact, the majority of my business is centered around assisting people with re-allocating their money to try to beat the practices of the Federal Reserve.

But back to Ebay: Competition is good for capitalist markets. The things I have learned from both working inside and outside of Ebay has led to a wealth of knowledge that many of you must also possess and is quite useful.

So in summary, the transference of wealth via the movement of assets within the money supply go from those that make less money to those that make more money. The less money Ebay makes and the more money the sellers make, the better. I believe the entire business strategy of Ebay shifted a long time ago from just an auction site to a website to instill distrust in buyers against sellers. Buyer protection is plastered everywhere. I mean hey, even as a seller now, you lose your "20% discount bonus" if you don't accept returns which is part of the whole forced trust thing. Again, this is not an attack on Ebay. Ebay is entirely allowed to choose any business practice they want that is legal. It does scare me a little to see them have such a huge control of the auction marketplace though.

Did I just write Chris' six page response? haha

Again - thank you to *everyone* for their responses. I love constructive and experience-rich conversation that both agree and disagree with me. It's how we all learn from each other.

[Maineman750]

whole forced trust thing

I have to totally disagree on that point...I give my tenants a discount for paying the rent early....I would hope nobody construes that as me forcing them.

[coincollectingenterprises]

I have to totally disagree on that point...I give my tenants a discount for paying the rent early....I would hope nobody construes that as me forcing them.

Good point! Though one could make the argument your tenants aren't exactly under a buyer protection (though I suppose the landlord-tenant code is a similar pact?). I mean, a return policy versus paying early is a bit of a different thing, is it not?

[Maineman750]

Good point! Though one could make the argument your tenants aren't exactly under a buyer protection (though I suppose the landlord-tenant code is a similar pact?). I mean, a return policy versus paying early is a bit of a different thing, is it not?

Actually not....a business practice that lessens the burden (negotiations) on eBay is well worth them giving a discount. I think the big problem with any of us criticizing another business is that we are not faced with their unique problems.

And yes, a lease protects the tenant as well as myself

[coincollectingenterprises]

Actually not....a business practice that lessens the burden (negotiations) on eBay is well worth them giving a discount. I think the big problem with any of us criticizing another business is that we are not faced with their unique problems.

And yes, a lease protects the tenant as well as myself

Very good point and astute observation.