12/3/10 Powerseller Profiteer Newsletter

Why you should seriously be considering un-branded products to sell on eBay…  

Hello!

I had an email earlier this week from a slightly concerned subscriber asking if I knew anything about an EU Law that she had heard about that if passed would require online business sellers of branded goods to also have a bricks and mortar premises.

I heard rumblings about this back in February and have been trying to find out more for a couple of weeks, but to be honest I have been struggling to understand what this will achieve and exactly who it will benefit if it does comes in to effect at the end of May when the original law is due for renewal.

If you are unaware of what’s been going on, very briefly, according to a draft regulation drawn up by the European Commission, suppliers of branded goods may be allowed to stipulate that all distributors of their products have a physical bricks-and-mortar shop before they can actually sell their goods online. The proposed rules would replace existing guidelines exempting companies from strict EU competition rules under certain circumstances and those rules expire at the end of May this year.  

But who are they actually trying to help? Is it the bricks-and-mortar stores or are they doing this to help the brands? As far as I can tell, it’s certainly not going to help small online businesses. Quite honestly, to me it appears that they are attempting to get rid of the small, online low-overhead businesses. And why?  Because they are too efficient! How is that a good idea then? Surely this is a backwards step? The internet has enabled many people to start their own online businesses that otherwise would not have been possible.

Now, as you might expect eBay have already stepped in here and have made their views known; their argument being that this would benefit large retailers at the expense of the small businesses, it would cut the growth of e-commerce off in it's "teenage" phase, and that the proposals would just let the luxury brands continue with price fixing and discrimination. Online retailer Amazon have stated similar. 

The brand owners as you might have already guessed are all for this idea though because they argue that this provision would stop ‘free-riders’ i.e. those online retailers who benefit from the advertising and promotions that the brand name pays for and who then offer the same brand name products online at a cheaper price. Of course they are able to do this because they do not have as many overheads involved such as staff, rent and all the other incidentals that come with having a bricks-and-mortar store and the brands don’t like this. 

But in my opinion (and reading some of the recent comments in online forums, many people feel the same) this proposal – and that’s all it is at this stage - appears ill thought through and even discriminatory, hence my confusion! So, I wouldn’t start panicking just yet…however….this does bring me on to a subject that I have mentioned previously but seems timely to do so again bearing in mind the proposals I have just briefly run through. And that is to do with the ongoing problems you might find yourself facing if you are selling branded goods online, particularly on eBay.

I know plenty of eBay sellers who successfully sell genuine branded goods and make a fantastic living out of it, but it’s these very sellers who might find themselves in a bit of a sticky situation in the near future if this law is passed. For a long time I have steered clear of branded goods because problems seem to arise one after the other. So, branded, is not what I’m all about!

For me, it’s all about the potential of ‘unbranded’ products and that’s why this new EU Law doesn’t send me into a blind panic. Because, it won’t really affect me. This law is all about branded goods, not un-branded.

This has always been my strategy right from the start. Un-branded goods are far less likely to give you a headache and so all my successful eBay selling techniques are based around un-branded goods. It’s always worked well for me and so that’s why I like to recommend this route to others.

But what can go wrong with selling branded goods? 

It’s not that it can go wrong as such, it’s just that by selling branded products on eBay, as this latest development has shown, you are more likely to encounter ‘obstacles’ along the way such as:

• Highly Competitive markets
• Poor wholesale pricing
• Limited genuine suppliers
• The possibility of receiving counterfeit goods
• Selling restrictions governed by eBay
• The chance of VERO restrictions

And not forgetting the new proposal:

• Possibly needing a bricks and mortar store in order to sell branded goods online at all

What’s so great about un-branded goods? 

Does it really matter what you are selling on eBay as long as you are making money? Well, yes it does matter because there’s making money and there’s…making money! If you really want to make a proper income using eBay then you need to find some hot products that you can source easily and at the best price and list correctly that will then give you an income almost on auto-pilot with no hassle and this is where selling un-branded products comes in to it’s own.

‘Un-branded’ products are generic items that you can source and sell that come with no brand name or at the most just a number and what this means is that you can sell them as they are or you can brand these products with your OWN invented brand name. This wipes out all competition immediately because no-one else can ever sell your brand apart from you, unless YOU let them of course!

The great thing about un-branded products is that buyers cannot easily compare like for like and this is a huge advantage for you as it means you remain competitive at all times with whatever product you are selling.

Contrary to popular belief, not all eBay buyers are looking on the site for designer or branded bargains. Yes, of course many people do visit eBay to specifically search for that must have Gucci handbag or the latest Apple iPod or whatever, but many more just want to find the item they want at a good price and that’s where un-branded products do well.

Just to summarise; if you choose the un-branded products route:

• You will have a wider product choice
• You will find better wholesale pricing
• You will encounter a larger number of suppliers
• You will have less competition on eBay
• You will not encounter any selling restrictions
• You will not have to deal with VERO restrictions
• You will always know that you have the genuine article
• You won’t have to have a bricks-and-mortar store if the new EU law goes through

I have absolutely nothing against selling branded or designer goods on eBay and if you choose to do so that is your decision, but un-branded is my chosen route and it continues to consistently bring in the profits and so that is why I believe that it is a sure-fire way to success.

Bear this in mind when you are researching hot niches and deciding which products you want to source and sell and remember too, that it’s always wise to rely not just on one source of income as you never know what’s around the corner. More on that next week…

As always I wish you the very best of success, 

Amanda 

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I produce this newsletter on the understanding that these are my own personal opinions and experiences, which are as accurate as possible at the time of publication. I cannot be held responsible for any error in details, accuracy or judgment whatsoever. 

© Amanda O’Brien 2010 

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