Category Archives: Business Stuff / Internet Marketing

Struggling to make money on eBay?

Is it any wonder that people struggle to make any money online? The Internet moves so fast. What worked a treat for pulling in the cash last week, is now old news. The days of being able to throw up a web page and start selling the same day without doing a jot of advertising are long gone. Equally, the days of buying pretty much anything from a wholesaler and chucking a quick advert on eBay to turn an instant profit are also a distant memory.

One of the main problems online is how easy it is for people to copy a great idea. Someone starts selling widgets on eBay, someone else sees how many they are selling and for how much. They spend some time looking for a wholesale supplier of widgets (much easier now than it used to be) and order a few. Now they start selling widgets in competition with the first seller which leads them into a price war, each knocking 50p off at a time until they have squeezed their margin right down. Oh and just to make things interesting, two more sellers have noticed how popular these widgets are and they too are now selling them and have also joined in the price war. The original seller throws his hands up in disgust and leaves the party – it’s all too much effort for no reward…

Of course, this type of competition has been going on for years offline but the process is much quicker online. So what is the answer? Well, you can make very good money simply jumping from one product to another, moving on when the market is saturated with sellers and the margins are too fine to make it worthwhile. The downside is that you have to constantly be looking out for new products to sell. This makes it a lot of hard work but the rewards are there if you are prepared to put in the effort.

If you don’t fancy chopping and changing your product line every week, you could stick to the same products but work on the basis of selling for absolutely the lowest price you can manage. You make a tiny margin on each product sold but hopefully you will be the cheapest and can therefore sell a lot more than your competitors. This is a risky strategy and even if it works, you will end up having to pack and ship huge quantities of product just to break-even. Not something I would recommend (unless you like working 20 hours a day packing up widgets!)

The Internet isn’t everything of course – you could always try selling ‘offline’! I know, I know, who does that these days? Well actually, plenty of people! I’m not suggesting going out and leasing a retail unit in your local high street but how about car boot fairs (yes they are still very popular), craft fairs and so on? I started selling offline long before the Internet was even invented – I used to take stock to school and sell it! Seriously, I liked nothing more than relieving my classmates of their dinner money for whatever the latest craze was!

Or how about simply finding something so unique that it is very difficult for someone else to copy it? Maybe you have a particular talent and can design something individual or maybe you can think of something which requires a fair bit of work before it is ready to sell, thus meaning that all those lazy ‘steal someone else’s product idea’ sellers won’t be bothered with it? A couple of years ago, I was making upwards of £500 a month from one of these very ideas. I’ve never shared it with anyone before but as I don’t use the idea myself now, I am happy to pass it on. It gives you an idea of what is possible if you think outside the box.

I came across a huge collection of old car magazines for sale ranging from the 1940s onwards. I figured that the magazines had lots of articles and adverts which car enthusiasts might be interested in, either for collections or to frame. Turns out I was right. I cut out and scanned some of the better adverts for cars such as the Jenson Interceptor, Ford Escort Mexico or the Ford Capri and listed them on eBay for a few pounds each (£5.00 including postage was a nice round figure). To say I was amazed at the response is an under-statement. These old adverts literally flew off the shelves.

I had a few weeks spare so I devoted some time to listing more adverts and articles and ended up with several thousand on eBay. It was very time-consuming BUT this meant it would be hard for anyone else to compete. Equally, all the work was done upfront – I had to cut the adverts out, scan them, file them and upload them before making a penny (again this made it unattractive to the ‘get rich quick’ merchants). On the plus side though, when someone bought one, all I had to do was put it in an envelope and post it.

The other plus side was the profit margin. I purchased over 1000 car magazines (each one containing 30+ usable adverts and articles) for £150. Just one of these adverts sold for £5.00 (less a couple of quid for postage and packing), so if you say after eBay fees etc you were making £2.50 an advert, each magazine was potentially worth £75.00! If you couldn’t be bothered cutting all the adverts out, there was a good market for individual magazines but you would only get around £7.00 – £10.00 per mag. Still a superb margin though if you consider that 1000 would be potentially worth £7000+!

In the end, it became too much work for me and other business interests took over but for a time this one, unique idea was making me some very handy pocket-money.

There must be thousands of opportunities out there to do similar things so don’t try and copy everyone else selling the same items on eBay, do something different and see how much easier it can be…

Can I Buy Your Website?

I’ve been working online in one form or another since 1998 and in that time I have built, sold and bought countless websites and domain names. From time to time, I will see a website that I like the look of and I’ll drop the owner an email to see if they are interested in selling it. Chances are, if you are reading this, that you have received such an email from me and want to know a bit more about me and how I operate before replying. Therefore, here are a few FAQs to guide you further…

Why are you interested in my website?

There could be a number of things which have attracted me to your site but, at this stage, chances are, I just like what you are doing and think that your website might be a good ‘fit’ in my portfolio. Sometimes I may see ways to improve a website which the owner might not have spotted and sometimes I think that the site is simply a great piece of Internet real estate that I would be proud to own. Either way, take it as a compliment – I like what you’ve done and I’m willing to put cold, hard cash on the table to prove it!

How much will you pay me?

Well, I’m going to need a bit more information before I can give you an exact figure but I am not here to try and rip anyone off. In general terms, if a website is already earning money, I would look to pay anywhere between 1.5x and 3x annual profits. These ratios are flexible and depend on a number of factors, for example: age of site, visitor numbers, source of traffic, type of income generated, competitiveness of the specific market, future opportunity, potential costs going forward, time required to run the website, trends of income/traffic over the previous months/years and so on.

What type of websites are you interested in?

I prefer ‘information-type’ sites – ie. websites which help an end user by providing them with information (either free or paid). I love membership sites (where a user is paying a recurring monthly fee) and I also like websites which sell digital products such as eBooks or simple software. Websites which fit into the ‘not interested’ category would be online shops selling physical products (too much like hard work) and gambling/porn sites. I am also not interested in any website less than two years old.

Traffic is just as important to me as income so a website with decent traffic but low or no income would be of interest. By ‘decent traffic’, I am thinking of at least five hundred unique visitors a day (which is actually quite a low number).

Can I stay on as a shareholder or partner if I sell to you? 

I sometimes get asked this question when an individual is reluctant to sell their ‘baby’ but they are also bored stiff of running a website. They don’t want to see all their hard work going to someone else but equally, they are fed up of dealing with the day to day maintenance. I’m afraid the honest answer to this question is, ‘no’. It complicates things going forward and I would feel obliged to run changes etc past the previous owner, which I don’t really want to do. I will, however, promise to look after your website and, indeed, my investment in it!

Ok, I’m mildly interested, what next?

Simply reply to my email and let me know! I’ll be grateful for the reply and will ask a few basic details about your website traffic and income which will enable me to give you an indication of what your site might be worth to me.

Please note that I may email you back and say that, having seen the figures, I am no longer interested and this will most likely be due to one of two reasons. Firstly, I may have underestimated your traffic levels. For example, I may have assumed that you are getting a few hundred or thousands of visitors a day but actually, it is only twenty or thirty. This is unlikely as I have spent so long working in the Internet marketing arena that I can usually tell a busy site from a ghost town but I’m not saying it doesn’t happen. Secondly, it is possible that I have underestimated things the other way and whilst I thought you might be getting five thousand visitors a day, you are actually getting fifty thousand each day and I simply can’t afford your website or I don’t want to tie up as much capital as would be required to make you a fair offer. If this is the case and I am no longer interested, I will let you know quickly and I will explain the reason.

If you want me to sign a non-disclosure agreement at any point, please let me know. If I make you an offer and it is of interest, then we can talk further. If not, no problem, we can both go our separate ways  with no hard feelings.

Thank you for your time!

How to win more eBay auctions for just a penny!

I have recently been doing a far bit of buying on eBay and in the past couple of weeks I have used a tactic which I have been using for years to win several auctions. Given how successful I find this ‘method’ even after so many years, I thought I would share it with my readers.

I had assumed that these days, my secret tactic was pretty obvious to eBayers and that it would be losing its effectiveness. My experiences over the past couple of weeks don’t support this assumption and it worked even when bidding against well established, long term/high feedback eBayers.

Ok, so this is how it works. Let’s say you are bidding on an item which is worth about £50. The bidding is at £30 with a few minutes to go. Several bidders are interested and it looks like the item is going to go for what it is worth.

When bidding on eBay, I always leave my bid until the closing seconds of the auction – some call this sniping but in fairness it’s just common sense, why show your hand any earlier than you need to? It is fair to assume that one or more of the other bidders will have put in proxy bids (so although the bidding might be at £30, they may have said they will pay up to £50 and their bids will automatically be increased as other bidders bid the price up) and it is the way people use proxy bidding which will give you an advantage in many cases.

So if the item is worth around £50 and there is a bit of interest in it, then you can probably assume that at least one bidder will have put in a proxy bid of £50. If you also bid £50 but they put their proxy in first, then they will win. So you need to bid higher than their proxy bid. For some reason most people on eBay seem to still be stuck in mindset of using round numbers when bidding. In other words, (from my experience at least), when placing bids they nearly always use a figure such as £50, £55, £60 and so on. This means that if you make the assumption that the highest proxy bid is £50, you only need to bid £50.01 to win the item and if you put the bid in during the closing seconds of the auction, your competition has little time to react and re-bid.

This might sound ridiculously simple but I have won five out of five auctions in the past few days using this method. The cheapest auction I won at £10.01 (the next highest bidder had put a proxy bid of £10) and the dearest auction I won at £260.01 (next highest bidder was £260). I was discussing this with a friend and he revealed that he had just won a car using the same technique! He bid £1601 and the next highest bid was £1600!

As I say, a very simple technique but one which is very effective and can win you auctions for just a penny!

Buying websites online

I’ve been spending some time recently looking at the possibility of buying a couple of website businesses. Why? Well, I want to expand my portfolio but quite frankly, I am too lazy to start something from scratch!

Buying an established business means I can pick up a site which has an existing customer base and income stream without doing the hard work of building the site and doing the initial marketing (which is quite often the hardest bit).

What I have discovered is that even finding a suitable website business to buy is an absolute nightmare! Although there are plenty of sites up for sale, you’ve really got to sort though the rubbish to find a gem. Not only that but there seem to be a lot of people out there who are quite prepared to try and mislead buyers if they think they can get away with it.

Fortunately I have a wealth of online experience built up over 13+ years so I am probably better placed than many people to pick up on the areas where sellers may have been less than honest. Let me give you some examples of the type of thing I have seen in just the last week…

Supplying misleading traffic figures seems to be a popular thing to do, especially with new websites. I have seen sites for sale which have only been running for a month or two which are claiming traffic of 20,000 unique visitors per month! Unless you are incredibly lucky, this just doesn’t happen. Dig a little deeper and chances are that the seller has paid for a ‘traffic package’ which will provide a stream of junk traffic to make their stats look good. I found one site which was clearly targeted at a US audience and despite only being online for six weeks, was claiming 30,000 unique visitors per month! A quick look at the Google Analytics file associated with the site confirmed that yes, Google was counting in the region of 1000 visitors per day. However, dig a little deeper and you would see that ALL of this traffic originated in China! Not good for an American site and a huge warning sign that this traffic is not what it first seems.

Take a second site I found. Basically a niche site which was selling a particular type of kitchen product. There were about 90 different types of this product available for purchase and the site claimed that all products were dropshipped direct from the main UK distributor. The products were quite expensive which meant a handful of high value orders each month. Over the past year there were around 70 orders in total. Nothing strange in that you might think. However, I noticed that as well as over 80 testimonials from customers, every single item on the site had at least 1 product review from a customer and some had up to 5! There were over 250 product reviews apparently from just 70 orders. This is completely impossible – it’s a fact that most people won’t bother with a testimonial or a review, even Amazon doesn’t have reviews for every product. Again, I dug a little deeper and found that ALL of the reviews were written in the past two months and the icing on the cake for me was that one of the reviews actually read as follows:

“I got paid a measly 5cents for rating this product and writing this review”

Priceless – you couldn’t make it up (well actually you could and they did!).

This particular case actually got worse. I figured that whilst the reviews etc might all be fake, they did seem to be making sales from the site (of course the fact that the seller had lied about the reviews could mean they had lied about sales too). There was enough information in the sale listing for me to determine who the dropshipping wholesaler was and I therefore contacted them directly to obtain some wholesale prices. I wasn’t about to hand over a lump of money to the scamming seller but I might throw up a quick website of my own instead ? Guess what? The dropshipper advised me that they had recently decided to cease offering a dropshipping service. And there ladies and gentlemen we almost certainly have the reason that the website is up for sale.

You might think that a site like this would never sell, that there wouldn’t be anyone out there daft enough to buy it. You’d be wrong – the site sold at auction for almost £12,000 and I bet the poor buyer has no idea about any of my findings above.

I have come across numerous sites like this during the past week, it really is quite worrying as, to someone who doesn’t understand how traffic/sales figures and so on can be faked, it would be easy to get ripped off.

If you are looking at buying an existing online business, just be careful out there – it’s a minefield.

HMRC to Trawl the Web for eBay Tax Cheats

Well it had to happen sooner or later and to be honest, I am surprised it has taken as long as it has! The Inland Revenue announced last week that it would be starting a campaign to hunt out tax dodgers selling on eBay and the Internet in general.

HMRC will be using ‘bot’ software to automatically look for specific information and trading patterns which will identify certain people and companies and then cross-reference these details against their own records. This will allow them to pick up any discrepancies.

The campaign will be launched later this year and will specifically target eBay traders and other small businesses and private ventures such as personal tutoring or tradespeople.

The Inland Revenue has suggested that if you are in a category about to be targeted and feel that you might have been ‘less than honest’ about your tax affairs, that now is the time to come forward – don’t wait until you are caught later in the year.

Mike Wells, director of Risk and Intelligence explained,

“By being open about our areas of interest for the coming year, we hope to maximise the exchange of information and help customers pay what they owe.

We will use the information we gather to pursue people who choose not to use the opportunities we provide for them to put their affairs in order on the best possible terms. It will be more expensive if we come and find people so I urge them to come forward and disclose voluntarily.”

Does this affect you? Have you been enjoying a tax-free income from eBay or some other online source? If so, it looks like the good times may be coming to an end and it might be time to start thinking about putting your affairs in order. And if you have been under-declaring tax for a number of years, it might be time to start saving up…!