Skip McGrath, long time auction seller, has written an excellent article on this subject, one that every seller would be advised to read.

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I see eBay sellers confusing “saving” money with “making” money all the time.

For centuries man has looked for a way to buy more time. We all know you literally can’t “buy” time with money, but you can “buy” time with time-saving and time-management techniques. Over my lifetime, I have seen the exponential growth of automation technology as the biggest time-saving boon to mankind.

Sometimes it’s an investment in technology that can buy you time and sometimes it’s just doing little things well. I was working on my new book last week and Karen was sitting at the next computer processing orders. I heard Karen wail and looked over as she was trying to tear her hair out. One of our eBay buyers had bought a Starbucks mug from us at auction and decided to pay by check. Karen opened the envelope, found the money-order and a note that said: “I am really excited to get my Starbucks mug.” There was nothing else in the note. No name, no address, no eBay username and no description of the mug. (We had sold over 20 different mugs at auction in the previous week or so.) So Karen spent the next hour doing detective work trying to narrow down which auction this was and who the buyer was. She asked me: “Don’t you have anything in your auction description or end of auction emails instructing people who send checks or money orders to include some information about themselves, an auction number or anything?” I looked at her sheepishly and admitted I didn’t. I have been selling on eBay for six years and this had happened numerous times and this simple step had still eluded me.

So sometimes it’s a simple thing that can save you time. That brings us to the thought of investing in your business. Years ago in the corporate world I was a sales director for a large company. We hired commissioned sales people as independent contractors. I had a fantastic salesman named Howard working for me. He had a very high closing ratio but his sales total at the end of the month was about the same as some of the mediocre people on my team. I tried to figure out why this was. I watched Howard for a while and then I spent some time tracking his activity. It turned out that Howard was the type of individual who would step over a $20 bill lying on the street to pick up a $1 bill lying just beyond it. (Stay with me I will get back to eBay in a minute).

Every salesman had to spend time prospecting and setting up appointments and then doing the paperwork related to their sales. Howard was spending almost 20 hours a week doing this and only 20 hours in front of customers. Howard made about $200 on each sale and he closed about 8 sales a week. ($1,600 week) If he was only in front of customers 20 hours a week, that worked out to an income of $80 an hour when he was selling. I asked Howard why he didn’t hire someone to set his appointments and do his paperwork so he could spend more time in front of customers. His answer was: Gee Boss, that’s expensive. I would have to pay $10 an hour to find someone good.

I often get emails from people complaining how expensive some software or auction management service is. These folks are like Howard, they are stepping over a $20 bill to pick up a $1 bill. Yes, using a service such as Vendio, Andale, MarketWorks or any of the others incurs a monthly cost. DSL is more expensive than dial-up. An integrated postage scale and label printer is expensive to buy and you have to buy the labels. Dumpster diving for free boxes is cheaper than buying them. What I am saying here is that all of these things cost money but can save you time.

OK – so how do I determine what to invest in and what is a waste of money. First make a list of “high-value” tasks. A high-value task is one that makes you money and takes advantage of your unique talents and is something you would not want to ask someone else to do. Some examples might be doing product research to find that next great product. Taking photos and writing auction descriptions, or answering questions from bidders. Now list your low-value tasks. These could include uploading photos to your web site, posting feedback, sending out payment and shipped-notice emails, hand-addressing shipping labels, packing your shipments, and standing in line at the post office.

Any time you spend doing high-value tasks is making you money. Time spent doing low-value tasks is time you could be spending doing high-value tasks that make you money. If you are launching 50 auctions a week and closing 35 of them successfully anything you can do to either launch more auctions or increase your closing ratio is a high-value task. If your low-value (administrative) tasks are sucking up your time that you could be spending to launch more, or better, auctions you need to find a way to reduce time spent that is not making you money. There are three ways to do this: Automation, standardization and hiring help.

Automation takes the form of using auction management software or a service such as Vendio to automate things such as setting up auction templates, scheduling launch times, calculating shipping, sending out payment and item-shipped emails, posting feedback and so on. It would also include using a system such as Endicia to integrate your scale, label printer and printing postage. There are many other forms of automation available to eBay sellers today. Just click on the seller services link on eBay Seller Central.

Standardization is anything you can do to instruct the customer how you handle your shipping and order processing. This is usually done in the part of your auction description where you lay out standard payment and shipping terms. Standardization can also include using fixed shipping costs, so you are not spending time calculating shipping and emailing that information back and forth to the customer.

Admittedly, hiring help can be problematic. Most people do not want a stranger working in their home. This is where you need to be a little creative. We set up a shipping station in our garage. We hire a local teenager who comes in every day after school and works in the garage packing our goods. She is still too young to drive so Karen takes the packages to the post office, but because we now use Endicia, she just drives up to the back door, rings the bell and hands the packages over. This was a real time-saver before Christmas when the post-office lines were really long.

One seller I know takes all his goods with the pre-printed postage labels to a neighbor’s house. She packages the goods and takes them to the post office. She is a stay-at-home mom and he pays her $7.00 an hour. Packing and the trip to the post office takes her between two and three hours a day so this costs the seller between $14 and $21 a day. But that two or three hours saved allows him to launch many more auctions than he could otherwise. These are examples of trading a low-value task for a high-value task. There is often a cost for doing this, but now you are picking up the $20 bill instead of stepping over it.

http://www.auction-sellers-resource.com/newsletters/jan