... shower down from cyber sky. To be on the receiving end of those dollar bills requires time and effort. When I started in auctions, I didn’t know a single soul who was actually participating in them. As a result, I made lots and lots of mistakes as I learned the ropes. This book will shorten the learning curve for you.
One mistake-avoidance technique that I really recommend is to think your sales through before you even list an item. If you know what is involved in selling and are prepared in advance, your frustration level will be much lower. Your decisions will be sound and you will find ways to do things that suit you best.
So let’s get down to business... how will you accept payment?The choices you make will be influenced by the value of whatever you are selling. Most people will not buy and sell a Matisse with a personal check but will prefer an escrow service (i.e., an independent organization that holds the money between buyer and seller).
With a $10 book, your options are obviously different. Payment could be made by...1) Checks
This is by far the easiest way to accept payment. Most auction users are accustomed to this method of payment and are quite comfortable with it. Many sellers specify that they will hold a check for 7-10 days before shipping merchandise. This explains why money orders are so popular. Buyers want their goodies now.
Personally, I don’t hold checks and I have never received a bad check. I hasten to add that all the checks I have received have been under $30. Therefore, a loss is hardly devastating. My more expensive items have all been paid for with money orders. Now this doesn’t mean that I will never get a bad check -- the odds are that I will at some point. So it’s common sense to be prudent.
Another possibility is to use a service that covers bad checks. For example, I now have some terrific health insurance that is created specifically for selfemployed people. One of the benefits is that they will cover any check up to $2500 and I will receive the money within 48 hours.
There are also services that allow for check-by-fax but I have never seen this used.2) Money Orders
All sellers accept money orders, certified checks or cashier’s checks. When specifying payment, it is best to give these certified funds as an additional choice -- not the only choice. (There are people who don’t like the extra expense or trouble of obtaining certified funds. These folks will likely skip your auction altogether.)
3) CashDon’t specify cash! Many people will be suspicious about fraud and there are obviously no safeguards against loss in the mail. From a buyer’s point of view, it is risky because there is no proof that you received their payment.
There can be problems when dealing with international customers because U.S. and Canadian money orders are supposedly tough to come by in some places. However, Western Union with its offices all over the world can handle this hurdle.
4) Credit CardsMany buyers like credit cards because of the security they offer. Luckily, it is getting easier for sellers to offer a credit card payment option. The former process of going through banks and having your personal history checked back to your first grade teacher is over. There is too much competition for merchant accounts and/or third party software.
Do your homework by comparing several companies. And don’t be mislead by certain claims. For example, many of them claim that if you join their program or if you act within a certain time period, or ... blah, blah, blah ... they will waive the fees to join. In truth, they all waive those fees.
Shop and compare.
Interesting point. Many sellers who have a merchant account for their other businesses may still not take credit cards for their auctions. They believe that most people are in the habit of using cash and money orders and, as a result, don’t use credit cards.
Personally, I think that shortly almost all transactions will be completed through a third party. There is more security when a reputable company is involved.
5) C. O. D.Don’t! Collect on delivery is a very bad idea for two specific reasons. First off the bat, your buyer must be home...
... for delivery or it will be returned to you.One of the most attractive features about Internet shopping of all kinds is convenience. Most folks do not want to sit at home waiting for a package.
Second reason -- if the buyer is home, he must have exact change for the item. If not, the delivery person won’t leave it. It would seem logical that if someone was expecting a package and knew the exact price of delivery that he would also have the exact amount sitting in a convenient spot. Don’t count on it. Just ask the pizza delivery people.
Many buyers will by-pass C.O.D. items entirely.6) Escrow
An escrow company can make sense in certain situations. For instance, the sale item is expensive. eBay claims that half of all their items are $25 or less. Unless the buyer is really spooked, escrow doesn’t make sense for a $15 item. If the buyer insists on an escrow company, make sure they are willing to pay every cent of the expense.
However, buying a $25,000 diamond and emerald bracelet is a very different story. Would you send thousands of dollars for an unseen item to a seller whose password is Shifty?
A buyer might be anxious about the arrival condition of 12 place settings of antique china and insist on escrow services. (If I were the seller of such an item, I might consider having the packing done by professionals who have insurance.)
Before using an escrow service, make sure the terms are crystal clear on a few points...• Who is going to pay for this service. Typically, the buyer pays but this is negotiable.
• Who pays for return shipping in the event that the item is damaged or unsatisfactory in some way?
• How long is the inspection period? Escrow services usually allow two days for the buyer to determine if her purchased item is satisfactory.
If you and your buyer decide to use an escrow service, often the auction site will recommend one. Or you can choose one that suits you.
The “loop” works like this... The buyer sends her payment to the company who then notifies the seller to send the merchandise. The buyer can drastically affect the speed of the transaction by her choice of payment and you should let her know this.
If she sends a personal check, the company will hold it for ten days before notifying the seller. If the buyer wires the money, it will usually be credited the same day. When the buyer notifies the escrow agent that she is satisfied, the company sends the money to the seller.
If the buyer is going to return the purchase, the seller notifies the company when the merchandise is returned. At this point, the buyer receives her money back, minus the charges from the company. Perfect security for both buyer and seller.
7) PayPalPayPal, owned by eBay, is my personal favorite. It is also currently the most popular way to transfer money from your buyer to your account. Using their services is very simple. All you need is an e-mail address.
Picture this scenario. Susie wins the bid on your prize Christmas platter. As soon as she is notified that she is the winner, she contacts PayPal through her e-mail account. She gives PayPal the particulars of the transaction, including your e-mail address and the auction number. PayPal verifies her information, and notifies you that Susie has paid for her item. You ship it to Susie. A seamless process in action.
Buyers really like it because...a) They are not giving their card information to a stranger.
b) The transaction is so quick -- no mailing, waiting for checks to clear, going and buying money orders, etc.
Sellers like it because...
a) They get their money immediately.
b) They don’t have to be running to the bank to make deposits. PayPal is simple and quick. And its verification protocol protects both the buyer and seller from fraud. Credibility is a critical factor in any small business development. A Net auction business is no different.
