"Should You Use Dutch Auctions" by Jason James
If you're a Low Volume Seller, you need to run multiple Dutch auctions to really make a killing on Ebay. Consider this example; you sell designer watches on Ebay for $150.00 each and you have 200 different types of watches. Therefore, you decide to run 200 separate featured in category auctions in the Jewelry and Jewelry > Watches categories.
If you don't make use of the Dutch option and list only one watch at a time, then your maximum potential for sales each week is 200 watches.If your profit margin is $75.00 and your average percentage sales equals 60%, then you're weekly income is $9,000. Not bad, but not $100,000 per month either!
Now let's modify that example. Instead of listing 200 auctions of one watch at a time, you should instead list 200 Dutch auctions selling 100 watches at a time for each style of watch you carry. You would still have 200 auctions online each week, but your sales potential jumps from 200 to TWENTY THOUSAND (200 auctions x 100 Dutch watches in each auction = 20,000). Obviously, you won't sell 20,000 watches each week.If your product is popular, you might sell 5-10 watches on average from each Dutch auction you feature. Now let's recalculate your weekly income after running the Dutch auctions:
10 watches x 200 auctions x profit margin $75.00 = $150,000. A little better than $9,000, isn't it? To be on the safe side, let's allow for a FIFTY PERCENT MARGIN OF ERROR in our calculations. Perhaps you only sell 5 watches per auction, or you only make $37.50 per watch, or you only list 100 instead of 200 different types of products.
You would still make $75,000 per week! Even if we allowed for ANOTHER fifty percent margin of error on the second calculation, you'd make $37,500 per week!
As you can see, Dutch auctions are the key to success on Ebay. When you combine the Dutch option with the featured or category-featured option, then you're playing a winning game. High Volume Sellers need not worry about Dutch Auctions in general, but Low Volume Sellers (the most common and often the wealthiest) must use this option to rake in the profits!
Please Note: An eBay member must have a feedback rating of 50 or more in order to place a Dutch Auction and have been with eBay for 60 days or be ID verified (See http://pages.ebay.com/help/sell/id_verify.html for more information.)
In my next lesson, we will talk about... "Market Analysis"
Yours in success,
Jason James
Consultant and eBay™ Power Seller™
Founder, Auction Resource Network
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Jason James is originally from Boston, MA. and has spent time in the U.S. Marine Corps learning some of the discipline that is required for a successful home-based Internet marketing business.
Jason has built a long track record of success mastering eBay and building profitable membership websites.
His first Internet success was selling products on Internet auction site eBay, becoming a power seller then eventually putting together the website www.auctionresourcenetwork.com which detailed the exact steps a person can take to make money on eBay.
Jason's most recent venture is putting together a series of Online videos made by some of today's top Internet marketers to help budding entrepreneurs get trusted information to help their online businesses grow to phenomenal levels.
Jason has kindly allowed us to post one of his articles about how to be successful on E-bay each day for the next couple of months. Thanks Jason.