29 October 2007

Forum or Auction Site? (Part 2)

I am sorry if the reader of my articles find it a little boring. I am trying to run through the basics of selling locally, before heading over to the more interesting parts; Selling Internationally and making some serious money!!

Following up from the previous article I would now like to discuss the pros and cons of each site. By understanding the different type of sellers available, we would be able to understand why they chose to sell at those sites.

Forum Site
People normally sell on the forum sites because of the following few key reasons. Forum sites are always free and very informal. People normally start by selling or trading their old and unwanted items. Others would try to do a bulk service at a forum based site. Since you do NOT actually have the item, you are making an offer to purchase the goods as a group. A forum would be the ideal place for the bulk service. People could discuss about the product, while waiting and hopefully get enough people to purchase the item in bulk. Check out lowyat.net.

Auction Site
When the word auction site is mentioned, everybody would think of eBay. Naturally everybody would think of eBay as it is the worlds largest and most successful online auction site. In todays post, I would only be discussing about our local ebay.com.my and not the international site ebay.com.
In an auction site, selling is normally very formal. Everybody who visits an auction site, are either a buyer or a seller. Unlike the forum, people don't chill out and discuss stuff (talk about NOTHING) the whole day. Most auction site would have fees involved too. This would be the main reasons why people don't sell at an Auction site. While fees may be an issue, the higher barrier of entry will also cause less competition. Check out lelong.com.my and ebay.com.my.

As you can see, depending on what you are selling, or the reason for selling, you'll be able to chose the best site to sell your items. Selling bulk would only work at a forum based site as it may takes months before getting enough people. The serious sellers who make a living from the net would generally use an Auction site. The auction site would have more buyers. There would be special tools too, to help you with faciliting your sales.
Generally people start by selling or trading their old items. Some start by doing bulk services. After selling a while, they would realise that it may be easier to sell on Auction site, rather than a forum as there are so many more potential buyers and also more seller tools.

An Auction site is made for selling and buying while a forum is made for discussion between the members.

27 October 2007

Forum or Auction Site? (Part 1)

Continuing from my previous post, I would to discuss about the difference between selling on a forum site or a paid auction site in Malaysia. I have personally sold on all 3 sites. Each site has its own pros and cons.

Who sells on these Sites?Before we discuss about the difference between a forum or an Auction site, I would like to discuss about the different types people who sells here and why they choose those sites.
  • Businesses or individual selling new items for income
  • Individual disposing or trading their used items
  • Individuals who bulk items in hope to purchase certain items at better than market prices

Selling for income
In this category, both business owners or individual sell things for income. They either purchase items from locally supplier or import directly from overseas. Business owner generally sell their items to promote their retail shop whether it is an online shop or a physical shop. Individuals normally sell items for a fraction of the market value, as they have little or no overhead working from home. Their aim is once again for income, normally as extra to supplement their full time job.
Selling/Trading used itemsThis is very common on why people start to sell or trade things online. Being a techie and gadgets person, we are constantly upgrading our "big boys toys" whether it is our computer, the mobile phone, consoles, cars or any other expensive hobbies that us guys may have. In purchasing a new item, we wish to dispose of our older items while it still have some value. A great example is the mobile phone. Nokia just released a new phone.... if I could sell my old phone, I could get the new one!!! :)
Bulk Selling
Generally asians are very kiasu and would always try to purchase things at a bargain or heavily discounted. Come on, who wouldn't want to buy an item at 70% discount? But not always we are able to purchase things that we need or want at a bargain. At times like these, we would need to create the opportunity to buy at a good price.
Let's say you wish to buy the new Sony 42" LCD TV. First you locate for the local supplier/importer. He tells you that you would need to buy 10 units to get it at a special price. You would offer 9 other people the opportunity to purchase it at this special price. When you do manage to locate 9 other people who are interested at the same item, you would then purchase the items at the wholesale price. This is what we call a bulk service. We would be buying at the best possible price (wholesale pricing) assuming that the seller is NOT making a profit. Sometimes a bulk services may take weeks or months before they are able to locate enough interested parties. Everybody saves from this method, but at times the minimum quantity for the bulk services could be quite hard to achieve.

25 October 2007

Selling in Malaysia

To some, selling in Malaysia may be a better alternative to selling internationally. I'll run through the advantages of selling locally and name a few local sites that you could try selling at.

Advantages to Consider
  • Little or no cost required
  • Little competition
  • No logistical and packing issues
  • Payment is via local bank services
  • Start by selling locally before proceeding to selling internationally
Local Selling Site
  • lowyat.net (forum based selling)
  • lelong.com.my (fee based auction site)
  • ebay.com.my (free auction site)
I'll run through the difference between selling on an auction site or a forum in my next post.

24 October 2007

Selling Locally or Internationally?

I am sorry for not updating the blog earlier as I have been flat out with work.

To most people, when they hear about selling online, their perception is about selling locally.

Don't get me wrong, selling locally have its advantages too. So does selling internationally! I have made a simple table for comparison below

Selling Locally
Selling Internationally
Competition is low. Able to monopolize the market.
Higher profit due to Foreign Exchange. Bigger volume due to bigger market.
Common Issues
Local market is small. Depends on what items you selling.
Very steep competition at the international level causing certain margins to be thin. Shipping times long.
Low. Not many local players.
Very high. Competition with people throughout the world, specially the up and rising chinese from the China
Profit Margin
Low to Medium. Depends on products and competition.
Low to High. High margin are due to the exchange rate, able to profit from the Foreign Exchange. Low margin comes from super steep competition and saturated market, but makes up with the huge volume.
Low. Able to offset by having more items.
Medium to High. Medium volume comes from less saturated where, the profit margin is normally higher. High volume comes from saturated market and steep competition, but a lower margin
Shipping Cost
Shipping Times
Quick. 2-4 days
Long. Up to 2 weeks to Australia & Europe. Up to 3 weeks to United States
Success Stories
Selling computer parts imported from China. Able to compete with retail shops where items are generally more expensive. Target market of computer users who are comfortable with purchasing online. Asians are always looking for bargains!
Selling decorative ribbons which cost about $3RM for about £1 at international levels. Huge volume. Internationally buyers feels at £1, the items are at a bargain.

15 October 2007

Why do people sell online?

Whoever: So Eric, what do you do for a living?
Eric: I sell stuff online...
Whoever: Online? Serious arr? Don't play la....

Those are the exact type of comments that I constantly get from people that I meet. People wonder whether would it be possible to make a living out off net.....

There is more than just selling for money. Many people do it for other reasons.

Most common reasons for selling online:
  • As a main or secondary income source
    • Most common reason. MONEY!! Who wants more money?! No arguments on that right?
  • To supplement their hobby
    • A comic collector may have to sell some of his comics to make more room for his growing collection as well as supplement his very expensive hobby.
  • To remove unwanted or used items
    • Many people sell their used technological items like computer parts, mobile phones or PDA as they upgrade to the latest toys. Who wants a 2 year mobile phone? Nobody right? Sell it while it still have some value.
  • As an excuse to buy more stuff
    • Many people believe that, by clearing their wardrobe, they are allowed to buy more clothes, the perfect excuse for someone who already have got 80 pairs of shoes :p