eBay Business the Smart Way: Maximize Your Profits on the Web's #1 Auction Site / Edition 3

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"With over 200 million registered users and net revenues in the billions, eBay is indisputably the world's most popular online auction site, an international marketplace that runs full speed ahead, 24-hours a day, seven days a week. This unique and ever-growing realm offers virtually limitless opportunities for those ready to take advantage of it -- but to make the most of eBay, you need the right knowledge, timing, and techniques to stand out from the crowd.

Now completely updated in a third edition, eBay Business the Smart Way gives you the inside track to online auction success. Still the most comprehensive eBay guide available, this trusted resource gives you clear examples, bulleted checklists, and valuable ""insider"" tips to help you:

Set your business up legally.

Build credibility and brand recognition.

Pick the best business model for your needs.

Choose the right type of auction for each selling situation.

Use the latest software to manage auctions, inventory, business processes, and accounting.

Hire employees and even get help without hiring employees.

Learn just enough HTML and Web design to make your spot on the Web look phenomenal.

You'll find out all you need to know about licenses, shipping, taxes, and liability, as well as how to create a storefront website, find products to sell, and save expenses by buying business supplies on eBay. Plus, this expanded third edition includes brand new chapters on security concerns and legislation affecting multi-state sales tax, as well as the latest information on PayPal, Andale, Google, Froogle, and eBay-owned features including eBay Stores, Skype, Turbo Lister, Shopping.com, and much more.

The book is a tremendous timesaver that lets you focus more on selling your products and less on business processes, helping you to contend with an increasingly crowded and competitive marketplace, escalating online theft and fraud, and continuously changing tax legislation and updates to the site. Whether you're new to eBay or an experienced seller seeking to take your online auction business to the next level, eBay Business the Smart Way lays out straightforward, easy-to-understand guidelines and strategies that combine good old-fashioned common sense with state-of-the-art Web savvy techniques.

Comprehensive, practical, and completely up-to-date, this latest edition of eBay Business the Smart Way is the essential key to running a low-risk, high-profit online auction business. It's the one book you need to get the most you can out of this exciting, one-of-a-kind online arena, and see your profits soar."

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Editorial Reviews

From the Publisher

"Praise for Joseph T. Sinclair's Previous Books:

eBay the Smart Way

""Check out eBay the Smart Way...for a wealth of tips on growing your business."" -- eBay magazine

""A solid primer for buyers and sellers on the world's No. 1 open market."" -- The Pittsburgh Post-Gazette

""This is a well-written, comprehensive guide."" -- Australian Personal Computer

"" ‘Must’ reading for anyone considering buying or selling on eBay."" -- The Bookwatch

eBay Business the Smart Way

""Whether you're thinking of selling or buying online, or are already doing so, this is an easy-to-read, highly informative book that covers eBay from soup to nuts."" -- Barbara Weltman's Big Ideas for Small Business newsletter

Web Pages the Smart Way

""I followed Sinclair's chapter by chapter approach over the course of several weeks, reading and experimenting whenever I had a few moments. Et voila! I am (almost) a Web expert. It was simple."" -- BookPage"

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Product Details

  • ISBN-13: 9780814473948
  • Publisher: AMACOM Books
  • Publication date: 11/28/2006
  • Edition description: REV
  • Edition number: 3
  • Pages: 544
  • Product dimensions: 6.80 (w) x 8.90 (h) x 1.90 (d)

Meet the Author

Joseph T. Sinclair is one of the world’s foremost eBay experts. His previous books -- including eBay the Smart Way (now in its fourth edition), eBay Motors the Smart Way, Building Your eBay Traffic the Smart Way, and eBay Inventory the Smart Way -- have earned media attention worldwide. He maintains a website, baysidebusiness.com, to update readers on significant changes in eBay policies, rules, and features, and writes an eBay blog at baysidebusiness.com/blog. A successful online entrepreneur himself, Mr. Sinclair is based in the San Francisco Bay Area of California.

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Table of Contents


I. Introducing eBay Business 1

1. Introduction 3

Who Should Read This Book? 6

eBay’s Place 8

eBay’s Competition 10

You’re in Business Now 11

Customer Service 11

Find Your Niche 11

Be Prepared to Work 12

State of Retail 13

Call to Action 14

II. Getting Started 21

2. Setting Yourself Up Legally 23

Sole Proprietorship 23

Partnership 27

Corporations 31

Hybrid Business Forms 34

Virtual Businesses 34

And Then You Grow 35

Taxation 36

Resources 36

Conclusion 38

3. Business Details 15

Sales Tax License 15

Business License 18

Regulations 18

Employees 19

Independent Contractors 19

Insurance 23

Bank Accounts 24

Tax Number 24

Merchant Credit Card Account 25

Trademarks 25

Accounting 26

Branding 27

Inspiration 33

Resources 35

4. Equipment, Supplies, and Space 37

Hardware 37

Software 39

Internet Access 40

Home Router 41

Long Distance Service 42

Business Machines 44

Office Furniture 45

Office Supplies 46

Office Premises 46

Storage, Packing, and Shipping 46

Home Office Tax Deduction 47

Inexpensive Home Office 48

On the Road 50

5. Borrowing Money 53

Business Plan 53

Savings 56

Credit Cards 56

Relatives 58

Angels 58

Banks 58

Other Lending Sources 63

Lenders for eBay Businesses 66

Resources 66

6. Amnesty for Criminals Like You 67

The Case 67

The Situation 69

The Agreement 72

The Reality 75

Pandora’s Box 80

Summary 81

III. Conducting Business 83

7. Selling on eBay 85

Types of Auctions 85

Listing an Auction 88

Taboo Items 96

Illicit Practices 100

Your Marketplace 101

Passive Endeavor 101

Text-Box and Banner Advertising on eBay 102

Power Sellers 103

The Heart of the Matter 103

8. Auction Details 105

Advertising 105

Placement 115

Timing 115

Valuation 118

Linking 118

About Me 118

Final Details 119

Where the Work Is 120

9. Photography 121

Taking Photographs 121

Digital Cameras 128

Image Services 130

10. Using Image Software 135

The Digital Darkroom 136

Image Editing 137

File Formats 142

Summary 143

11. Pricing 145

Prices 146

eBay Research 146

Online Research 147

Analytic Research 149

Offline Research 150

Appraisers 150

Trial and Error 152

Selling Strategy 153

12. Special Auctions 155

Special Section Auctions 156

Separate Auctions 157

The Reality 163

Non-eBay Marketplaces 163

13. Fulfillment 167

Drop Shipping 167

Normal Operations 169

The Digital Goal 190

14. Receiving Payment 193

Merchant Credit Card Account 193

If You Can't Get a Merchant Account 196

Money Orders and Cashier's Checks 197

Checks 200

Online Payment Services 201

Cash on Delivery (COD) 203

Bidding Qualification 203

Don’t Sell on Credit 203

What Should You Do? 205

15. Finding Inventory 207

Basics 207

Hot Tip 221

Go for It! 221

IV. Handling the Unpleasant 223

16. Dealing with Buyer Fraud 225

Fraud 225

Remedies? 234

Some Afterthoughts 236

Pawnshops 237

17. Security 239

Equipment 241

Software 246

Passwords 250

Accounts 252

Social Engineering 255

Free Email 257

Safe Transactions 258

Case Study 258

Backups 260

Counterfeits 263

Disaster Plan 264

Security Checklist 264

Summary 266

V. Making It Work 267

18. Software Features 269

Auction Management Software 269

eCommerce Software 273

19. Software Assistance 275

eBay's Programming Aids 276

PayPal Extended 280

Andale 281

Broadband 287

Auction Management Services and Software 287

Custom Programming 290

Accounting Software 290

20. PayPal Today 291

Extended Services 293

Website Services 294

Summary 296

21. Expanding Your Market with Datafeeds 297

Datafeed Markets 297

Craig’s List 305

Summary 306

22. Selling Internationally 307

Selling 308

Buying to Sell 315

Buying 317

Merged Markets 317

New Yankee Traders in Force 318

23. Customer Service 321

Feedback 322

Credit Card Chargebacks 322

Guarantees 323

Warranties 325

Payment 325

Escrow.com 326

Bonding 327

Square Trade 328

Authentication Services 328

Returns 329

Communication 329

Full Information 329

Software 330

Offline Customer Service 330

Experiment 330

Know Your Customers 331

Not Just This or That 332

VI. Operating Smart 333

24. Storefronts 335

What Is a Storefront? 335

Informal eBay Storefront 337

eBay Stores 338

An eBay Business 343

Marketing 345

Website 347

eCommerce Software 349

Bonding to eBay 353

About Me Webpage 354

eBay’s Hidden Market 355

Summary 360

25 Determining Your Profit 363

How Are You Doing? 363

Expenses 368

Profit 371

Your Time As a Resource 371

Summary 374

26. Developing a Strategy 375

Building a Product Profit Model 375

Finding Inventory 380

Commodity Products 383

Value-Added Products 388

Time 392

Not the Same 392

27. Education 393

eBay University 394

Books About eBay 395

College Extension Courses 395

eBay Audios 395

eBay Videos 395

eBay WBT Tutorials 396

Business Seminars 396

Business Books 397

Web Development Tutorials 397

Web Development Books 397

Community 398

eBay Live 398

Summary 400

VII. Other eBay Business 401

28. Selling Services on eBay 403

Advertising 404

What to Sell? 405

Strategy 410

Elance 412

Buying Services on Elance 416

Summary 416

29. Integrating eBay with Offline Retail 417

Trial 417

Combined Accounting 418

A Special Business 420

Customer Service 420

Summary 421

30. Using eBay for Marketing 423

Compared to What? 423

The Plan 424

Other Businesses 427

Summary 429

31. Consignment Selling and Other Businesses 431

Consignment 432

Other Businesses 437

Use Elance 439

32. Buying on eBay 441

Normal Buying 441

Buying for Your Business 441

Organizing Your Buying 445

Guarantee 449

Services 449

Software 450

We Have Stories 450

33. Marketing Media 451

Blog 451

Podcasting 455

Summary 457

Appendix IThe Top 10 Tips for Beginning an eBay Business 459

Appendix IIThe Top 12 Tips for Seasoned eBay Businesses 461

Appendix IIIThe Top 9 Tips for Business Buyers 463

Appendix IVCross-Promotion Example 465

Appendix VHTML Tutorial 467

Defining a Webpage 469

Markups Alphabetically 471

Anchors and Hyperlinks 494

Example Webpage 495

Viewing the Webpage Source 496

eBay HTML 497

Summary 498

Index 499"

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First Chapter

eBay Business the Smart Way

By Joseph T. Sinclair


Copyright © 2004 Joseph T. Sinclair
All right reserved.

ISBN: 0-8144-7267-2

Chapter One

Auction Details

Selling effectively on eBay is a matter of managing the details. To some degree you can automate your eBay procedures with an auction management service. Even so, you need to manage the details in setting up such automation.


Your auction ad is your key not only to selling in the first place but to getting the maximum bid you can get for an item. The fact that your item sells profitably is almost meaningless if it would have sold more profitably had you advertised more effectively.

Certainly advertising is an art well beyond the scope of this book. However, eBay advertising gives you an advantage over other forms of advertising such as display ads in newspapers and magazines. Volume of information matters; hype doesn't. Volume is easy; hype isn't.

Complete Information

The Internet is an informational medium, not a hype medium. Website visitors' expectations are different from newspaper and magazine readers' expectations. Space in newspapers and magazines is expensive. You have to keep things short to stay within a reasonable advertising budget. You're forced to use hype to catch the reader's attention. You don't have enough space to inform a reader. Readers expect hype.

On the Web in an eBay auction ad you have all the room you need to tell the story of the item being sold. Space is not at a premium. Website visitors expect to be informed about the item.

Think about it. A potential bidder cannot see, hear, feel, taste, or smell the item offered in an auction as he can in a store. He cannot casually talk with a sales clerk as he can in a store. Therefore, he seeks a substitute. A good substitute is plenty of information (text) and something to look at (photograph) in an auction ad. The information has to describe the item completely, going even so far as to list the product specifications and features in detail. A photograph is effective even if it's just a photograph of the box in which the item is packaged.

Easy to Read

The information must be easy to read. Text is easiest to read in a column with normal size serif type and normal writing style. On the other hand, text in one huge paragraph as wide as the webpage is almost unreadable, and you will lose a percentage of your prospective bidders with such an ad. But, if you divide up the text into multiple paragraphs, set it in a column (using the HTML TABLE markup), and make the type large enough, every reader will be able to read your ad easily.


The normal size for type is from 10 to 13 points. The browser default is 12 points. Set text in a column that's 9 to 11 words wide (a table about 450 pixels wide). This is optimal for reading at the default type size. Make sure the color of the type contrasts with the color of the background. Low contrast makes reading difficult. Black type on a pastel color (white is a little harsh on the eyes) makes a good combination.

Typesetting Guidelines

By following a few simple guidelines, you can make your text look professional.


Use italics for emphasis and for customary uses, such as for book titles (see Figure 8.1).

We had started out of Mexican Hat about 3:30 PM. By the time we started down the trail off the mesa, it was about 6:00 in the evening. The shuttle of vehicles between the trailheads at Slickhorn Canyon and East Slickhorn Canyon is about four or five miles, and you can make good time driving it in good weather. We carried ten gallons of water in each vehicle (five in each of two containers) as recommended in my pamphlet Desert Hiking Essentials.

Figure 8.1. Proper use of italics.


Use bold for headings, headlines, and even for warnings. But do not use bold for emphasis. It makes reading more difficult (see Figures 8.2 and 8.3).

We had started out of Mexican Hat about 3:30 PM. By the time we started down the trail off the mesa, it was about 6:00 in the evening. The shuttle of vehicles between the trailheads at Slickhorn Canyon and East Slickhorn Canyon is about four or five miles, and you can make good time driving it in good weather. We carried ten gallons of water in each vehicle (five in each of two containers) as recommended in my pamphlet Desert Hiking Essentials.

Figure 8.2. Improper use of bold.

Warning: Never start a trek into a canyon where water sources are unknown without taking enough water to last two days with a comfortable margin.

Figure 8.3. Proper use of bold.

Bold Italic

Use only as a substitute for bold.

All Caps

Don't use "all caps" (text made up entirely of capital letters). It's difficult to read. All caps is an old typewriting technique, no longer necessary. And don't use all caps for headings or headlines either (see Figure 8.4).


Figure 8.4 All caps are difficult to read.

Superscripts and Subscripts

HTML supports superscripts and subscripts. Use them when appropriate.


HTML supports bulleted lists. Use these to dress up your text and make it look professional (see Figure 8.5).

You will need the following 7.5 minute topographical maps for the Slickhorn trek.

Slickhorn Canyon East

Slickhorn Canyon West

Pollys Pasture

You can obtain these maps at your nearest US Geological Survey Office.

Figure 8.5 Bullets are handy to use, particularly for advertising.


HTML supports numbered lists. Readers find numbered lists useful and readable (see Figure 8.6).

You will need the following 7.5 minute topographical maps for the Slickhorn trek.

1. Slickhorn Canyon East

2. Slickhorn Canyon West

3. Pollys Pasture

You can obtain these maps at your nearest US Geological Survey Office.

Figure 8.6 Numbered lists are handy too.


To create boxed text, use borders. Use boxes for special instructions or sidebars. You create boxed text by putting the text inside a one-cell table with the border showing (see Figure 8.7).

You will need the following 7.5 minute topographical maps for the Slickhorn trek.

1. Slickhorn Canyon East

2. Slickhorn Canyon West

3. Pollys Pasture

You can obtain these maps at your nearest US Geological Survey Office.

Figure 8.7 A border around text draws attention to it.

Type Size

One sees a lot of small text used on the Web. It looks neat, but it's hard to read. Use the browser default size (12 points) instead. If you use type much larger than 12 points, people will also have trouble reading it easily.


Use rules (straight horizontal lines) to divide your auction ad into sections if appropriate. Using headings is better, but sometimes rules are OK also.


Don't use underlines in Web pages. An underline signals a link. Using underlines will confuse your buyers.

Flush Left

Keep the text flush left (lined up on the left side). If you use flush right, the text will be difficult to read. If you center all the text, it will be uncomfortable to read (see Figures 8.8 and 8.9).

We had started out of Mexican Hat about 3:30 PM. By the time we started down the trail off the mesa, it was about 6:00 in the evening. The shuttle of vehicles between the trailheads at Slickhorn Canyon and East Slickhorn Canyon is about four or five miles, and you can make good time driving it in good weather. We carried ten gallons of water in each vehicle (five in each of two containers) as recommended in my pamphlet Desert Hiking Essentials.

Figure 8.8 Flush right text is difficult to read.

We had started out of Mexican Hat about 3:30 PM. By the time we started down the trail off the mesa, it was about 6:00 in the evening. The shuttle of vehicles between the trailheads at Slickhorn Canyon and East Slickhorn Canyon is about four or five miles, and you can make good time driving it in good weather. We carried ten gallons of water in each vehicle (five in each of two containers) as recommended in my pamphlet Desert Hiking Essentials.

Figure 8.9 Centered text is difficult to read too.

Creating Efficiencies

The fact that information in volume sells items has two realities. First, it's easier and less expensive to provide effective written information than effective hype. Just supply the facts, all the facts. Second, a volume of readable information takes time and effort to produce. What can you do to reduce the workload? After all, you have a lot of items to sell, and you can only do so much for each.


Use a template for your auction ads. It doesn't have to be fancy. It should place the text in a readable column. You don't have to reinvent each new auction ad. You merely fill in the template with information, and the ad is ready to upload to eBay (see Figure 8.10). Auction management services provide a variety of nicely designed templates for you to use. Even eBay provides templates now.

Figure 8.10 Simple auction ad template created by author with HTML.


Use links to manufacturers' websites for additional information. This is permitted by eBay and is a good way to provide potential bidders with features, specifications, and even narratives on products. Be sure to check the link to make sure that it works.

Manufacturer's Information

If you can't link to a manufacturer's website, you can try to find the manufacturer's product information (including photographs) in digital form. Then you can copy and paste it into your ad. Likewise, you can save and paste a manufacturer's logo into your ad.

You Are Liable

I mention these two processes with some reservations. First, using a manufacturer's information without permission is a copyright infringement. Second, using a manufacturer's logo without permission is a trademark violation. You are liable if you do either. However, out of the millions of auctions on eBay each week, a significant percentage of the auction ads do include either a manufacturer's information or a trademark or both. Few, if any, of the sellers obtain permission to use either. As a practical matter, it seems a safe and even a reasonable practice until a manufacturer complains.

And, indeed, some manufacturers do complain. eBay's VeRO program may shut you down when your auction ad contains copyrighted text or a trademarked logo. Thus, you need to tread carefully. If you do get shut down, you will know that whatever you used, should not be used again.

If you can't find a manufacturer's information in a digital format, you can scan an advertising brochure or a product package and put it in your ad as a photograph. The ad will take somewhat longer to download, but it's better than nothing.

If you attempt to use a manufacturer's text and logo to lead people to believe you are the manufacturer, you have crossed the line. You are guilty of fraud and may be subject to criminal sanctions.

Fellow eBay Members Don't use the product information created by fellow eBay members with whom you are competing. That's not fair and violates the spirit of the eBay community.


Boilerplate refers to text in a contract or document that is used over and over again in similar contracts or documents. In other words, it's the part you don't have to rewrite. You need to use boilerplate in your auction ad. What should it include?

Marketing Information

Always use your eBay auction ads to market your eBay business. It's a great opportunity you can't afford to miss. Promote your website first, if you have one. You can't include a link to it (eBay outlawed that a while back), but you can publish your email address (which includes your URL) and even talk about your website (in the text).

Promote your business. Tell about your history, your success, and what you sell. Surprisingly, bidders want to know more about you. Information increases their comfort level with you. They will read about you. Don't overdo it, but do something.

Some of the auction management services automatically provide a display menu with a few of your other auctions on it for inclusion in your auction ad (at the end) in order to boost overall sales via cross-selling. eBay provides this service now too. eBay also includes links in the head of the auction listing, which do the same thing. This works as long as the other auction items are similar or relevant. Otherwise the items may not interest buyers. But it shows that with a little imagination you can use your auction ad for something beyond just selling one item.

Close to the Line If you promote your website in your auction ad, you are walking close to the line. Check with eBay rules to see what is permissible and what is not.


There are a few things you have to tell bidders in every auction ad. How they can pay for the item. That's a constant. How the item will be shipped. That's probably a constant, too, except in the case where the winning bidder wants faster shipping. And how much the shipping will cost. That's a variable, but the wording can be a constant except for the exact amount, which will change with each item.

This is a good place to tell bidders anything else you want them to know in regard to how they can do business with you. Some sellers include elaborate rules in their boilerplate, and they expect bidders to follow such rules. Each time they get burned by another winning bidder in a new way, they add another rule.

It makes sense to me to have several simple guidelines for the people you are about to do business with. After all, it's your auction, and you're expected to take the lead in making the business arrangements. An extensive set of rules, however, is a little too enthusiastic. What will happen is that winning bidders will ignore them, and that may lead to a genuine misunderstanding that you may interpret to be a total violation of your rules.


Excerpted from eBay Business the Smart Way by Joseph T. Sinclair Copyright © 2004 by Joseph T. Sinclair. Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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