eBay Sellers of the Bay Area: Meetup Round-up

A huge Thank You to Outright.com and the eBay Sellers of the Bay Area organizers for an incredible Meetup last night!

It was a full house and packed agenda, and yet we were engaged for more than 2 hours, with networking afterwards. Our first presenter was Laura Messerschmitt of Outright, who spoke on some key basic points of tax information for eBay sellers. Next was the Seasonal Seller Panel (eBay sellers Sherry Gilson, Marianne Taitano, and Serena Lee plus Bradley Hazelrigg from eBay's Seasonal Selling Team, which explored retail seasons beyond the winter holidays. Our last presenter was Rick Matsura from eBay's Seller Protection Team.

What follows is a quick summary of the key take-aways I picked-up from each presenter.

Tax Information

• Estimated Taxes: As soon as you will owe more than $1,000 in taxes, you need to start paying estimated taxes (payments are due JAN 15, APR 15, JUN 17, & SEP 16 in 2013). This usually kicks-in after $5,000 in  profit. Note: these deadlines are for sole proprietors with a schedule C, corporations have different deadlines and filing requirements.
• Shipping/COGS: If you offer free shipping, it is OK to include shipping cost as a Cost of Goods Sold (COGS) so you can better understand your margins. More conservative accountants will advise this course of action. However, booking this as an expense is not wrong.  At the end of the day, the tax effect is exactly the same so the IRS does not worry too much either way.
• Mileage: The most frequently missed expense, not claimed by eBay sellers in a recent Outright survey, was mileage. Keep track of mileage, log-in every time you drive for your business (going to the post office, going to buy shipping supplies, thrifting...) and you can deduct 56.5 cents per mile for your 2013 taxes (mileage value is determined by the IRS). It is usually a greater deduction to take mileage, than to calculate exactly the cost of gas, cost of car maintenance, what percentage of that was for business vs. personal use...
• Home Office Deduction:For 2013, the IRS will allow people who work from home to take a flat $1,500 deduction for the home office if they prefer, rather than calculating exact square footage of the home office as a percentage of the entire home and what percentage of expenses can be deducted and maintaining records of proof.
• Avoiding Audits & the 1099-K: The IRS has explicitly warned of a definitive audit trigger, Laura M. told us how to avoid it. When you get your 1099-K from PayPal (Amazon, Etsy...), Double-check that the amount of income you report on your Schedule C, line 1, is EXACTLY equal to or greater than the amount of income reported on your 1099-K.  If the amount on your schedule C is as much as 1-cent below what PayPal (etc.) reports, you have an audit trigger.
• PayPal & the 1099-K: Laura M. reminded us that we pay income taxes on profits, not revenues (profit = revenue - expenses). The 1099-K from PayPal will include any and all revenue received during the year, including sales that were later refunded, fraudulent payments that were later revoked, shipping income received from buyers, and sales tax payments received from buyers. Many of these income categories have contra-accounts to track the expenses (sales tax paid to the state, shipping expense paid, return refunded) so remember to track each and every expense possible to minimize your tax burden.

Seasonal Selling

• Generally, list seasonal items 4-6 weeks before the holiday. The exceptions seem to be Christmas and Halloween specific items, which will sell year-round. 
• Also 4-6 weeks out, add holiday-specific keywords to  listings that fit (such as Valentine's Day for red dresses).  Remember after the holiday, to re-edit these listings to remove the holiday name.  Auctiva's free Find & Replace tool makes this easy.
• eBay focuses their holiday promotion marketing around four key holiday/seasons: 1) Valentine's Day, 2) Mother's & Father's Day, 3) Back to School, and 4) Winter Holidays.
• Under-promise and over-deliver for happy customers.
• 50% of gifts are bought the week before Mother's Day (opportunity: Offer 1-day shipping), 9% are bought the same day, 80% of Americans will celebrate Mother's Day each year, and the average spend is $152.
• Men spend twice as much as women on Valentine's Day.
• Remember seasons are not the same everywhere, Christmas is in the summer in Australia.  
• It's a good keyword practice to use international versions of keywords.  For example, in the UK they wear "jumpers" not "sweaters".  Put both words in your title if you ship internationally.

eBay Seller Protection

• eBay has a team dedicated to protecting sellers from "bad" buyers.  They are working to deliver quality buyers to us, the sellers.  We can learn more at www.ebay.com/sellerprotection.
• The Seller Protection Team is strongly encouraging sellers to report buyers when their behavior is suspicious or problematic.  They have made this very easy, and now include a "report this buyer" button on the leave feedback page.
• When you report a buyer, this is anonymous to the buyer.
• At present, eBay is not penalizing or investigating sellers who report a high-number of buyers.  There is no danger or disadvantage for the seller to report buyers for bad behavior.
• Every bad buyer report is reviewed by buyer abuse detection software.  If evidence for suspicious behavior exists (such as a pattern of the buyer getting a lot of partial refunds, for example), the automatic process will flag the account for a manual review.  Right now, 30% of all reports are manually reviewed.  A first report questionable/bad behavior of a buyer probably will not flag a manual review.
• Since eBay made the "Report a Buyer" process more easily accessible, the number of actions to report buyers increased by 80%, and there was a nearly 10% increase in the number of buyers suspended.
• The Seller Protection Team uses "multi-account" detection software, to help protect sellers from buyers who use multiple eBay Buyer IDs.

eBay, Thanksgiving, and Black Friday Shoppers

eBay was quick to publish Thanksgiving Day and Black Friday sales data.  What they published was tied exclusively to mobile sales.

I think what is not said with these numbers is also very telling.

Remember, there are now two kinds of sales: mobile and desktop.  A small portion of mobile shoppers are brand new eBay customers, new to the marketplace because of the app on their smartphone (it was pre-installed on my Windows phone).  But the rest of these sales were diverted from desktops.

What would be helpful to me, a seller, is to know if gross sales (across formats) were up or down.  Since they aren't singing the praises of total sales, my guess is the news is not favorable.

But they have given us this crumb, so let's take from it what we can.

First, mobile sales are increasing.  Yay, mobile is up!  People are shopping anytime, anywhere from their phones and tablets.  That is great.  Glad to hear it.  Spend more money everywhere you are, shoppers!

As sellers, we need to be sure our templates are mobile-friendly.  Dump any scrolling, flowery, flash-laden code from your template.  Dump extra text, such as "If you have a question you better ask it now because if you ask after committing to buy then you are a poo-poo head."  You can now also drop the international sales disclaimer since eBay has your back on this, whether or not you state in your listings customs fees are extra.

Second, mobile shoppers are shopping most frequently between noon and 1 p.m. (pacific time).  For optimum visibility, schedule auctions to end between 12 and 1 p.m. (PT) on Thanksgiving Day and Black Friday next year.

One final thought... if you are using auctions during the holiday shopping season, ALWAYS have a reasonable buy-it-now price.  This allows holiday shoppers who want to buy it and be done to do so.

Delighting the Customer: 6 Reasons to Accept Returns

Have you ever shopped at a Nordstrom? From the moment you walk in the door, your senses are filled with pleasure.

There is soothing piano music, played live on the grand piano adjacent to the central escalators.

Employees are well dressed and smiling.

Polished marble shines.

Can't find the shoes you want in your size? No problem. They will have them shipped from their store 3,000 miles away at no charge. You can pick them up Thursday.

Every aspect of the Nordstrom experience is carefully designed to delight the customer.

When I was in business school, one of the first things we learned was the "Nordstrom Snow Tire" story. It goes something like this.

"A woman walks into Nordstrom to return the snow tires her husband bought. The tires had 'Sears' printed across them. She says her husband bought the tires here, and she needs to return them."

Of course Nordstrom doesn't sell tires, but in their effort to delight the customer they accepted the return and gave the woman her money back."

This is, quite literally, the textbook definition of going above and beyond what is required to make a customer happy. So why do it?

Nordstrom's liberal return policy one small piece of their culture of customer delight.

But let's get real, as eBay sellers we HATE the concept of returns: they cost us time and money.

Brick and Mortar stores take returns, and to be competitive in eCommerce we need to accept them too.

I've accepted returns since the first day I opened my eBay business over three years ago, and I've never regretted the decision.

As a whole, accepting returns has not hurt my cash flow. For the first 10 months of this year, my return rate (by dollar value) is only 3.8%.

6 Reasons to Accept Returns:

REASON 1: I want to delight the customer, so he/she will come and shop with me again. By accepting returns, there is an added level of confidence in the transaction.

REASON 2: I sell clothing, and sometimes garments just don't fit - even if the measurements are in the listing! Not all customers understand how to compare clothing measurements to body measurements. Heck, some customers don't even own a tape measure! Sometimes the part that doesn't fit was not measured. I recently returned a sweater I bought on eBay because the diameter of the sleeves was too small for me (the sweater had been washed in hot water and the sleeves contracted). This was not a standard measurement, but it sure would have kept me from wearing the sweater if I'd bought from a seller who didn't take returns.

REASON 3: Personally, I won't buy from a seller that doesn't accept returns. I get the impression they can't be bothered or that something is wrong with the garment.

REASON 4: DSR scores and positive feedback. If I sell a flawed item and accept returns, the buyer can contact me and say "Hey, there is a loose eye-hook on this skirt you didn't disclose in the listing. How can I return it?" If I don't accept returns, odds are she will contact PayPal or eBay directly, open a dispute or a claim for the dreaded SNAD (Significantly Not As Described). And if eBay or PayPal rule in the buyers favor, guess what. They take money out of your PayPal account, give it back to the customer, and the customer doesn't have to return the item! So now you have bad feedback, no skirt, and no money. Ouch!

REASON 5: Buyers can now filter search results so that only merchandise from sellers who accept returns will be displayed.

REASON 6: eBay is giving a visibility bump to listings that accept returns within 14-days or longer.

During the holiday season, eBay is encouraging sellers to extend their return period until January 31st. You see this policy in place now at most department and discount stores. To stay competitive, eBay sellers need to do the same.

If you want to learn more about why Nordstrom is hailed as customer service heroes, I recommend reading "The Nordstrom Way: The Inside Story of America's #1 Customer Service Company" by Robert Spector.

E-Commerce TV

I am excited to share the news that one of my favorite bloggers, John Lawson, is now starring in a new video series "Ecommerce Bits TV".

I have learned a LOT from him, and I think you will too!

You can watch the pilot episode here: