Secrets of Auction Selling Success

Three powerful ways to improve auction sales.
By Munjal Shah, CEO, Andale.com

What do you think of when you hear the term "online auctions"?

If your first thought is of flea markets and garage sales, it's time to update your image. Online auctions have grown up; serious businesses are making serious money by leveraging this extremely profitable sales channel. Would it surprise you to learn that the average gross margin of an online auction business is 40 percent? It shouldn't. Just consider the advantages to selling online.

• Reach more customers – a lot more. Auctions make it easy to market your inventory to millions of new customers and to reach them right where they're already coming to shop.
• Move your merchandise faster. The right buyer is online right now, searching for the very inventory you have to sell.
• Sell around the clock. Auction bidders shop day and night, and your "virtual store" is always open to them. You can make sales in your sleep.
• Make more on your sales. There's no better feeling than watching a number of determined bidders battle for right to buy your merchandise and no better way to maximize your revenue.

So, how hard is it to join the online auction gold rush? The basics are simple: create an ad, post it on an auction site, and wait for the bids to roll in. But you can drive up your bids and your profits if you know the three secrets to auction selling success.

Timing Your Auction

When should you start your auction? When should it end? What day? What time? How long should it run? Does it even matter?

Yes, it matters. But the answers to the other questions depend on what you're selling and whom you're selling it to. Timing your auction for maximum profit means taking the time to identify and understand your target customers. Who are they? How do they bid? When do they shop? When do they sleep?

The ability to leverage such demographics is critical to your online selling success. Remember, it's not uncommon for bidding to shoot up as the end of auction nears – so it's important to make sure that those final few hours fall at a time when your most likely buyers are most likely to be shopping. You can't benefit from a last-minute bidding war if your buyers aren't online when it really counts.

As for how long your auction should last, that really depends on what you're selling. If you're selling new merchandise that's widely available, you'll do best to keep your auctions short and turn over that inventory as fast as you can. If you're selling one-of-a-kind items, you may want to run the auction over two weekends to give bidders the longest possible opportunity to discover your ad.

Not sure who your buyers are or when they might be shopping? Plan to run your auction for at least a week and to close it on Sunday night at 8 pm. You'll get good exposure for your ad and you'll be ending your auction at a time when buyers are most likely to be online – or to be able to get online.

Merchandizing Your Item

Contrary to popular opinion, great merchandise does not sell itself. Millions of items are offered at online auction every day, and if you don't take steps to stand out, your ad – and your profits – can fade disappointingly away. So what do you have to do to merchandize your item effectively online?

• Write informative ad titles. Your ad title should be useful, interesting, informative, eye-catching, descriptive, and highly searchable – all in approximately 45 characters or less. Be sure to include the common name of the item in your description. Maximize your space, don't waste valuable characters on empty superlatives.
• Write compelling descriptions. Mix details and drama to hook shoppers' interest and their bids. A good description can make your item individually and specifically desirable over others. Make it easy to read. Keep it concise. Include all the details that will be important to your buyers. Above all, be honest. Your feedback rating can win or lose you new customers.
• Provide good pictures. Serious buyers are going to spend time lingering over your photos. Take several to show different angles and aspects of your item clearly. Plan a simple, uncluttered composition. Pick a background that provides good contrast and that doesn't compete with your item. Don't forget to provide close-up detail and to make sure that every picture you use is sharp, clear, and correctly exposed.
• Offer specials and promotions. Promotions can serve as a powerful incentive to bid, and they don't have to be overly costly or labor-intensive. For example, you could offer to pick up the cost of shipping insurance. The point is to show bidders you care about their bids and that you're willing to give something in return for their business.
• Choose a professional layout for your ad. The layout is your buyer's first impression of your item and your professionalism. Choose a clean layout that reinforces your item's value and that complements rather than competes with your item.

Close the Sale Fast

It can be tempting to put most of your selling effort and energy into creating killer ads that will pull in buyers and drive up bids. But don't forget that the most important part of the sale begins when the auction ends.

Maximizing your online selling success means moving fast to close every sale, in part because it's just good customer service. Your winning bidder expects to receive that merchandise as soon as possible, and your professionalism at this stage of the sale could win or lose you repeat business down the road.

But closing the sale fast is just as important to you as to your customer. The longer your sale stays "open," the more time and effort you'll have to devote to tracking it. Did you receive that payment yet? Did you ship the item? Did you remember to email the buyer again? Time really is money in online auction selling. The more time you spend chasing a sale you've already made, the less time you'll be able to spend making new sales, and new profits.

So, what do you need to do to close the sale quickly?

1. Get in touch with your winning bidder fast – and first. Make your after-the-auction email clear, friendly, and professional. Identify deadbeat bidders quickly and move on.
2. Make it easy for your buyer to pay. Give your buyer as many choices as possible and make it simple.
3. Ship promptly when you receive payment. Your buyer will appreciate the fast turnaround, and it makes you look professional. Package carefully, include a shipping invoice and a thank-you note.
4. Leave feedback for your buyer at the marketplace. Drive your own feedback rating up. Leaving prompt feedback for your buyers encourages them to do the same for you.

Munjal Shah is the president and CEO of Andale. Previously, Shah led the Internet Marketing and e-commerce group for the Baan Company and built its e-commerce operations. Shah also led product management and marketing activities for BlackSun Interactive, an Internet community software company funded by CMGI @Ventures. Shah has a master's degree in computer science from Stanford University and a bachelor's degree in computer science from the University of California, San Diego.