Want to start an online auction business? Here's some free advice. Don't do anything before responding to the following question:
Do you have a niche?
Everything isn’t for everyone. Not anymore. Remember, the current great online migration isn't from BIG to SMALL. It's from general to specialized. A niche site is specialized platform. Think in these terms: A niche forces you to concentrate your efforts on something that you are really good at. And the final goal is to do it better than everyone else.
Benefits of The Niche
Start a profitable online business
Have an easy-to-navigate site, an efficient & user-friendly software, and loyal customers. A carefully selected niche is the easiest (and fastest) way to reach your goal. Here’s why a niche is always a good idea (Spoiler! - Free Business Tip!): A niche is a small big business.
You’re not tied to passing trends. You'll always have a small but dedicated community. E-commerce becomes profitable when you don't complicate it: good products, enthusiastic customers, and excellent user experience. The building blocks of a good reputation. Amazon, before turning into the all-in-one that is today, was an online bookstore. A small business that sold evergreen products - always a promising start.
It’s also BIG
It's never a matter of quantity. It's about finding the person that absolutely needs to have that comic book, Matchbox car, or book. That's why a niche business is immediately profitable. And it's the business is not limited to the usual suspects: comics, model trains, sports cards, rare wines, etc. You can have a site that sells craft beer, handmade products and even gold extraction machines.
A niche business is a different kind of animal
It’s emotion over impulse. No influencer has the power to sway one to bid against someone half a world away for a Swamp Thing issue from the 70s. But rest assured: there are many out there still looking for their grails. That’s why every niche has a small (but always growing) online (& offline) community. However, it takes a special kind of software to bring together such a community.
Why online auctions?
Easy answer: limited quantity, historical importance & interest - the usual ingredients for a perfect storm. So don’t spend countless nights crafting long-term strategies or PowerPoint business plans. Find your niche and get down to business.
Mistakes That New Entrepreneurs Do
Nothing is Easy
Yes, it’s effortless to say & write it. It’s harder to acknowledge it. That’s why business newbies always ignore it. An online business absolutely needs be a calculated risk. The top priority should be finding the software that allows you to explore multiple business opportunities. However, instead of looking for a software that is efficient, time-saving, and customizable to specific requirements, new online entrepreneurs go straight for the most complicated and useless feature-stuffed software that there is.
Worst Practices for a New Online Business
Interminable & secretive planning. One day, when you’re almost ready to reveal to close friends small business plan details, you’ll notice that at least a dozen sites already "used" your idea. Remember: you’re never running alone. Don’t do anything before spying on your competition. Observe what actually works. It’s far easier to cross out an idea on paper than to throw away an entire plan (or site).
Skimming the Article? Read & Learn These Rules
Always remember the advantages of an online business: small & fixed maintenance costs (plus unlimited advertising space). All you need is a domain, a hosting plan (never buy expensive domains or a hosting subscription that greatly exceeds your projected traffic and a memorable site name.
It's Always The Software That Makes or Breaks Your Site
The issue that many overlook
It's both the idea and the execution. And the execution goes smoothly only if you have the right auction software. Find out how to spot a good one and read more about the features it needs to be the right one.
Never trust a video presentation.
Or a carefully crafted description. Always try the DEMO. If there isn’t one, get out the immediately. Only by playing around you can get a better idea of what kind of site you need. And design it to highlight the software’s features. Who doesn’t appreciate a simple & fast checkout process?
It’s never about you
You’re not the seller (even when you are). You’re the contact person when things go wrong. And when bad things happen, you'll be unable help clients that can’t find the Contact form. You should buy a software that automatically takes care of everything: makes it simple for customers to buy stuff, to contact you (the admin) or the seller, and even to combine invoices. Don’t spend time on things that don’t matter (or can be easily fixed along the way).
Online e-commerce has only one enemy: time
Getting everything right – logo, company name, compelling mission statement, etc. – always takes time. And there’s always time left to be fooled. By leaving the search auction software last, unfortunate things will inevitably happen. You’ll end up being seduced by a colorful software, only to be abandoned in a labyrinth of useless features that take an eternity to learn. And the process will certainly kill your entrepreneurial enthusiasm.
Every aspect of the business is important – but nothing as influential as the software. It's the only hunt that deserves extra time.
Insider info about crucial features
And now something that will spare a lot of agony. An auction software is similar to an iceberg. What you’ll actually need and use is only a small fraction of what the software can do. But what you need is always the same. So try to make a smart investment and buy a software that has all of the following features:
1. Reserve Price, Buy Out and Make Offer
Always look for the crucial ones. Believe it or not, the vast online space is filled with stock software that doesn’t include all three features. Their importance? Auction = competition. Bidding wars are fun. But what happens when there’s no protection against underselling? Things go downhill very quickly when a seller can't set a minimum price. There’s always someone with no bidding patience or one that absolutely wants the product. Better have all options one click away. And don’t forget what availability means: they can be turned off at will.
2. Bid Increments
It’s your auction - you make the rules. Change them auction-by-auction. Want to automatize bidding amounts? Just complete the Bid Increments Table. Enter the desired preset increment(s) and you’re done. Automatic, efficient, and time-saving. How it works: When an auctioned product reaches a certain price range, the Bid Increments Table automatically triggers a preset increment amount. At this point, all remaining participants will have to bid (exclusively) with the preset amounts, making it easier (or harder) for you to get the desired final price. Alternatively, you can set a custom increment amount (not connected with the lot’s price range) that will be used throughout the auction. Easy to understand & use. That’s the goal.
3. Bid Retraction
We know that you know. But it’s always better to see it in writing: A good business is one that retains customers. While some appreciate a carefully crafted logo, remember your company’s name, most don't return for them. Clients come back because your software (& implicitly your site) is easy to use & navigate. However, developers focus too much on maximizing the admin’s benefits, overlooking the ultimate goal: keeping the customer. And one of the most important (if not the most) client-oriented feature is Bid Retraction. The premise is simple: allowing users to withdraw from an ongoing auction after posting a bid. Simple, effective, pressure relieving, and crowd-pleasing feature.
4. Proxy Bidding
Another critical feature, even harder to find, that drastically reduces the actual time spend bidding. While a hands-on approach is always exciting, not everyone is willing to sit through an auction. The feature allows a bidder to enter the highest amount he/she is willing to pay for a lot. The feature will post bids, with modest increments, just enough for one to be the highest bidder, until it reaches the preset maximum amount.
5. Auction Sniping
How to make an auction more exciting and give more bidding opportunities? It’s a common story. Most of us were, at one point, the highest bidders only with a couple of seconds left on the auction clock. Just when preparing to celebrate, a higher bid is posted out of nowhere, leaving no time for a counter-bid. The sniping feature automatically extends the auction’s duration, thus allowing a couple more bidding rounds. It’s a win-win situation for everyone involved: higher prices and happier customers.
Take the High Road from the Start
You've probably noticed the first rule of a niche business: Everyone talks about the power of the niche. Fortunately, for you, it usually stops there. It's a nice idea but for some reason prospective entrepreneurs aren't convinced by its potential. After all, a small business means small-ish revenues. Right? Take and look at at the following and see for yourself how wrong they are: comics prices are skyrocketing, wines have long become investment vehicles, model trains are no longer child's play, and so on. Pick something and do your research. Once you've realized the potential of the niche jump on the wagon.