AW Daily - Tips & Tactics - Before the Auction: Improving Profitability

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More money: good. Less money: bad. It's pretty simple, right? Well, easier said than done. When it comes to improving the profitability of any business--whether it's an online auction enterprise, a comic book store, or a car dealership--we could all use advice and ideas on how to reap more profits and cut back on losses. Read on for information on how to save money and improve the profitability of your online auction business.

Step Back
First, step back and take a hard look at your online auction activities. How much are you spending each month? How much are you making each month? How successful are your sales? What are your best sources of inventory? Which auction sites work the best for you? When you relist, do you get bids or not? Do your auctions generate more bidding when they close in the evening or morning?

Before trying to improve your profitability, you'll need to fully access your methods and mechanisms. Of course, it's good to do this periodically anyway, but an in-depth re-evaluation and reckoning is especially beneficial if you're looking for ways to reduce your costs and boost your profits. Have a grounded sense of what you've been doing in the past so you can improve in the future.

Time Is Money
It's easy to let time slip away and not keep track of how many hours you devote to your online auction sales, especially if you're working at home and selling online full time. After all, there's no boss and no time clock to punch. So who's keeping track? Well, you should, that's who. If you're not diligent about maintaining tabs on the hours that go into your selling, you very easily can find yourself floundering and spending too much time being unproductive when you should focus on being productive. It might help to devise a daily schedule, in which you designate specific tasks for specific times. (Write descriptions from 10 a.m. to 11 a.m.; leave feedback from 11 a.m. to 12:30 p.m.; and so on.)

Here's a great piece of advice from AW member stockticker: "One of my best tips: Put a value on your time and remember that the amount of time you have to spend on auction activities is finite." So ask yourself: What are the activities that earn you the most profit (listing items, seeking out new sources for inventory), and what are the activities that earn you little or no profit (repeated trips to the post office, retyping auction descriptions or end-of-auction emails)? Try to eliminate the big time wasters that cut into your time--and thus your money. Besides the reducing the aforementioned multiple trips to the post office, you also should consider using some kind of auction software, which will help you track, better organize, and more efficiently manage your auction activities. For more information, see our Timesaving Strategies tip.

Create Your Own Walden Pond
Online sellers should take heed of Henry David Thoreau's timeless advice: simplify. And simplifying your methods will lead to increased efficiency. Here are a few strategies to consider:

Rely on one universal username and one universal password whenever you register on a site (there's nothing worse than hunting around for passwords).

Standardize shipping as best you can.

Designate certain days and times for certain tasks (see above).

Computerize your records (although you still should keep hard copies of some of your records, avoid the paper avalanche).

Use templates (for end-of-auction emails, auction descriptions, etc.), so you don't have to repeatedly type new documents.

Put up an About Me-style page (many sellers say this little personal touch helps elicit more bids, particularly from hesitant or newbie buyers).

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