Brendan Synnott is the founder and former CEO of Bear Naked Granola, the #1 Granola company in the country. He has been featured in the news multiple times and also was a participant on the show Survivor. He is currently the Chief Marketing Officer for the brand EVOL burritos. Here is my interview with him:
-What was your childhood like? Were you always interested in business?
i started selling candy on the side of the street when i was about 10 years old. from there i sold candy from locker in middle school, then made gear for my high school sports teams and started a car washing business in high school. i've always had that entrepreneurial bug. not so much about making money, but making money my way.
-What was your greatest business idea and what inspired it?
since bear naked was my greatest success, i've have to say starting a granola company. what inspired it was my own experience. i had been exposed to healthy eating by my grandfather who had heart problems. rather than have surgury, he opted to eat better. i learned from him the importance of what you eat. because of that awareness in food, i never understood why someone would put artificial substances in their body. i looked up and down that giant cereal aisle in the grocery store and saw nothing but processed and artificial offerings. i believed, and still believe, that consumers are now just beginning to take control of their health... and their first avenue to wellness will be natural and organic food products. they are better for the planet and the people.
-What jobs have you held before and do you believe they prepared you for your current career?
everyone job prepares for your career for two main reasons.
1. you learn skills... and all skills are valuable to someone.
2. you learn about people... you realize who and what you want to for.
i worked at a laundry mat, video rental store, bond brokerage, digital media company, Saturday Night Live, Trilogy Software.
-How would you describe your personality/habits and how would you say they have contributed to your business success?
i am a perfectionist when it comes to projects that create value. I notice everything. I try to listen and watch details so I can learn. I am extremely competitive. I hate losing and love winning. Not to say I'm a sore loser, but I never forget a loss.
-Are there any books/movies/experiences that influenced your outlook on life/business and if so, how?
Richard Branson is a personal hero. I loved his book "Losing My Virginity"
-What would you say is the best piece of advice you ever got?
Do what you love.
-What do you enjoy doing when you’re not working?
Playing. Anything outside and preferable solar powered.
-What do you want to be remembered for?
Breaking rules that unlock value.
Monday, June 28, 2010
Wednesday, June 9, 2010
Interview with Chris Baker, Entrepreneur and CEO of MailCode
In this post, I present an article with Chris Baker, the entrepreneur of MailCode, a mail sorting company. Chris is also the president of Group 1 Software, a subsidiary of the mailing company Pitney Bowes Inc. Chris specializes in technology and has a number of patents to his name in addition to the businesses he has started. Here is the interview:
-What was your childhood like? Were you always interested in business?
As one of 11 children, there certainly was competition for our family’s’ limited resources. There is no question the size of our family taught me to be more self-sufficient than my friends. It is interesting to look at my siblings. Of the 11 children, 15 years ago, 4 of the 11 were entrepreneurs in some form (two were carpenters, two in technology startups). Today 6 of the 11 are entrepreneurs and everyone else (except one) work for a family member who is an entrepreneur or married to an entrepreneur. I personally was driven to achieve progress in some form from a very early age. I once dug a 3’ x 4’ hole in the backyard and filled it with water to try out my new inflatable boat (the boat exactly fit the hole leaving no room for the boat to move in any direction) because I couldn’t wait for the weekend to go to a river or lake. I don’t have much patience when it comes to achieving things. As I grew up, this led naturally to business.
-What was your greatest business idea and what inspired it?
It’s hard to distinguish between great ideas and great strategy in business. I’m proud of Differential Weighing for which I received one of my patents (#5,001,648) and lots of royalties. But I’m also proud of the way I thought about developing my career, developing a unique combination of skills and experiences to afford me greater and new experiences.
-What jobs have you held before and do you believe they prepared you for your current career?
Before starting my first real company MailCode which was acquired by Pitney Bowes, during high school, I worked at Radio Shack, as the TRS-80s and PCs entered the marketplace. This gave me access to current technology and knowledge of a new and large industry. With this access, I started writing business software as an entrepreneur for local businesses. I continued this during college which lead to having a fairly secure entrepreneurial opportunity upon graduating – something I needed to pay off student loans/etc. Without access to the technology and relationships with local businesses (developed through Radio Shack), I surely would not have had the same experiences I have today.
-How would you describe your personality/habits and how would you say they have contributed to your business success?
Refusing to give up on anything. A good entrepreneur doesn’t give up, he/she just morphs the business/business model or market until something fits.
-Are there any books/movies/experiences that influenced your outlook on life/business and if so, how?
Crossing the Chasm was my introduction to hearing that other people were having/had the same experiences I was having. It (and other business books like it) taught me to think much more strategically while fighting the day to day battles of getting and keeping a business profitable.
-What would you say is the best piece of advice you ever got?
Many mentors have given me great advice. The one I think about most often is that I’m standing on the shoulders of all those that came before me – listen to them, learn from them, as without their knowledge, you aren’t standing on their shoulders – you are going to spend your time re-learning their lessons instead of advancing from it.
-What do you enjoy doing when you’re not working?
I find that balance is crucial to long-term success. For me, that involves, exercise (this is essential for me), spending time with my two boys, friends, cooking, carpentry, etc. I believe balance is the key to happiness and often overlooked.
-What do you want to be remembered for?
It’s a good question, but I’m still trying to decide if thinking about a legacy is a good use of my time.
-What was your childhood like? Were you always interested in business?
As one of 11 children, there certainly was competition for our family’s’ limited resources. There is no question the size of our family taught me to be more self-sufficient than my friends. It is interesting to look at my siblings. Of the 11 children, 15 years ago, 4 of the 11 were entrepreneurs in some form (two were carpenters, two in technology startups). Today 6 of the 11 are entrepreneurs and everyone else (except one) work for a family member who is an entrepreneur or married to an entrepreneur. I personally was driven to achieve progress in some form from a very early age. I once dug a 3’ x 4’ hole in the backyard and filled it with water to try out my new inflatable boat (the boat exactly fit the hole leaving no room for the boat to move in any direction) because I couldn’t wait for the weekend to go to a river or lake. I don’t have much patience when it comes to achieving things. As I grew up, this led naturally to business.
-What was your greatest business idea and what inspired it?
It’s hard to distinguish between great ideas and great strategy in business. I’m proud of Differential Weighing for which I received one of my patents (#5,001,648) and lots of royalties. But I’m also proud of the way I thought about developing my career, developing a unique combination of skills and experiences to afford me greater and new experiences.
-What jobs have you held before and do you believe they prepared you for your current career?
Before starting my first real company MailCode which was acquired by Pitney Bowes, during high school, I worked at Radio Shack, as the TRS-80s and PCs entered the marketplace. This gave me access to current technology and knowledge of a new and large industry. With this access, I started writing business software as an entrepreneur for local businesses. I continued this during college which lead to having a fairly secure entrepreneurial opportunity upon graduating – something I needed to pay off student loans/etc. Without access to the technology and relationships with local businesses (developed through Radio Shack), I surely would not have had the same experiences I have today.
-How would you describe your personality/habits and how would you say they have contributed to your business success?
Refusing to give up on anything. A good entrepreneur doesn’t give up, he/she just morphs the business/business model or market until something fits.
-Are there any books/movies/experiences that influenced your outlook on life/business and if so, how?
Crossing the Chasm was my introduction to hearing that other people were having/had the same experiences I was having. It (and other business books like it) taught me to think much more strategically while fighting the day to day battles of getting and keeping a business profitable.
-What would you say is the best piece of advice you ever got?
Many mentors have given me great advice. The one I think about most often is that I’m standing on the shoulders of all those that came before me – listen to them, learn from them, as without their knowledge, you aren’t standing on their shoulders – you are going to spend your time re-learning their lessons instead of advancing from it.
-What do you enjoy doing when you’re not working?
I find that balance is crucial to long-term success. For me, that involves, exercise (this is essential for me), spending time with my two boys, friends, cooking, carpentry, etc. I believe balance is the key to happiness and often overlooked.
-What do you want to be remembered for?
It’s a good question, but I’m still trying to decide if thinking about a legacy is a good use of my time.
Saturday, June 5, 2010
Lending Club: A great way to maximize returns on your money
In this post, I present a review written by my friend Nick Joosten about a site known as Lending Club. While a normal bank may give you a 2-3% return on your money, Lending Club, which specializes in micro-loans, promises a return of over 9%. In this review, Nick analyzes the pros and cons of the site:
Lending Club Review
After earning .25% APY in a money market account, I realized it was time to look elsewhere to invest. I came across Lending Club, which at the time promised 9.81% returns. I quickly dismissed it, assuming it was a Ponzi Scheme, and kept searching for other places to invest. Not having much luck after several days of research, I decided to at least look into Lending Club. The idea made sense: to have investors micro-lend to borrowers, essentially getting rid of the bank. But after the Madoff Scandal, I was hesitant to invest in organizations that promised such high returns. After more research, I became more confident that Lending Club was a legitimate organization. It was featured in many media outlets such as ABC7, Fox Business, Nasdaq.com, CNN, Forbes, Bloomberg, Chicago Tribune, The New York Times, CBS News, The Wall Street Journal, NPR, Yahoo Finance, TIME, CNBC, USA Today, etc.
After recognizing Lending Club as a legitimate institution, my next biggest concern was risk. I learned that the average default rate on a loan is around 3%. If you invest all your money in one loan, you have a 3% chance of losing all your money. However, if you invest in two loans, you only have a .09% chance of losing all your money (assuming that different people defaulting on their loans are independent events). For 3 loans, you have a .0027% chance of losing all your money, and so on. The percentage becomes infinitesimal when investing in several hundred loans thereby making it a safe investment.
I’ve been investing in Lending Club for over a year now, and here’s my opinion of the pros and cons:
Pros:
• One of the best ways to earn a good return on your money - I currently earn around 13% APY.
• You can read borrower’s profiles to decide whom to lend to.
• Not risky – investing in hundreds of loans makes it essentially impossible to lose all your money.
• Can receive tax advantages by creating a retirement account
Cons:
• Money is not very liquid – if you have your money invested in loans, you have to wait either until the borrowers make payments or sell the loans on the secondary market (you might have to devalue the value of the loans to make a quick sell).
• After receiving payments from borrowers, it might take a while to reinvest your money in other loans. Loans on Lending Club receive funding for up to 13 days. Your money doesn’t earn any interest while it’s waiting to receive funding from other lenders. Also, a little less than half of the borrowers cancel their loan applications, which adds to the inconvenience of choosing loans to invest in.
Overall, Lending Club is a great way to receive a high percentage return at low risk.
-Nick Joosten
Lending Club Review
After earning .25% APY in a money market account, I realized it was time to look elsewhere to invest. I came across Lending Club, which at the time promised 9.81% returns. I quickly dismissed it, assuming it was a Ponzi Scheme, and kept searching for other places to invest. Not having much luck after several days of research, I decided to at least look into Lending Club. The idea made sense: to have investors micro-lend to borrowers, essentially getting rid of the bank. But after the Madoff Scandal, I was hesitant to invest in organizations that promised such high returns. After more research, I became more confident that Lending Club was a legitimate organization. It was featured in many media outlets such as ABC7, Fox Business, Nasdaq.com, CNN, Forbes, Bloomberg, Chicago Tribune, The New York Times, CBS News, The Wall Street Journal, NPR, Yahoo Finance, TIME, CNBC, USA Today, etc.
After recognizing Lending Club as a legitimate institution, my next biggest concern was risk. I learned that the average default rate on a loan is around 3%. If you invest all your money in one loan, you have a 3% chance of losing all your money. However, if you invest in two loans, you only have a .09% chance of losing all your money (assuming that different people defaulting on their loans are independent events). For 3 loans, you have a .0027% chance of losing all your money, and so on. The percentage becomes infinitesimal when investing in several hundred loans thereby making it a safe investment.
I’ve been investing in Lending Club for over a year now, and here’s my opinion of the pros and cons:
Pros:
• One of the best ways to earn a good return on your money - I currently earn around 13% APY.
• You can read borrower’s profiles to decide whom to lend to.
• Not risky – investing in hundreds of loans makes it essentially impossible to lose all your money.
• Can receive tax advantages by creating a retirement account
Cons:
• Money is not very liquid – if you have your money invested in loans, you have to wait either until the borrowers make payments or sell the loans on the secondary market (you might have to devalue the value of the loans to make a quick sell).
• After receiving payments from borrowers, it might take a while to reinvest your money in other loans. Loans on Lending Club receive funding for up to 13 days. Your money doesn’t earn any interest while it’s waiting to receive funding from other lenders. Also, a little less than half of the borrowers cancel their loan applications, which adds to the inconvenience of choosing loans to invest in.
Overall, Lending Club is a great way to receive a high percentage return at low risk.
-Nick Joosten
Friday, May 28, 2010
Interview with Tim Brown, CEO of IDEO
IDEO is an industrial design and innovation consultancy firm based in Palo Alto, CA. The company is known for designing products, services, environments, and digital experiences and has also done a fair share of management consulting. The company has designed such products as Apple's first mouse, Microsoft's second mouse, the Palm V PDA, and Steelcase's Leap Chair and counts Proctor & Gamble, PepsiCo, Microsoft, Eli Lilly, and Steelcase as major clients. The firm has also been featured on ABC's show "Nightline" and the 2009 documentary "Objectified," won more Business Week/IDSA Industrial Design Excellence Awards than any other firm, and been ranked in the top 25 most innovative companies by BusinessWeek.
In this post I present a interview with IDEO CEO Tim Brown:
-What was your childhood like?
I grew up in a small town in the south of England close to Oxford. My father was a photographer and so I was used to the idea of image and craft. My schooling was very traditional, imagine something straight out of Tom Brown’s School Days and Queen Victoria but somehow I bucked the system and followed my passion for art. I was the one who crept off the playing field so that I could spend more time in the art studio.
-Were you always interested in business/industrial design?
Certainly not business and not really design. I only discovered design once I got to art school. In fact I thought originally that I might be a painter but quickly realized I didn’t have the talent. I was not at all entrepreneurial growing up and only really discovered business when I was forced to as the head of an IDEO office. I eventually realized that business can be thought of as a design problem and that insight has really helped me.
-What was your greatest business/design idea and what inspired it?
The realization that design thinking could be applied to a much broader set of problems than just the latest high street products. Since making this the main focus of the IDEO we have expanded considerably both in scope, impact and revenues. It was inspired on the one hand by the experience of the Dotcom crash when I realized we had too much of our business focused on tech and secondly by observing early signs of what some of our smartest clients were asking.
-How would you describe your personality/habits and how would you say they have contributed to your success?
I have fairly extreme attention deficit disorder. I get bored with thinking about one thing quite quickly and so I love to jump around between seemingly unrelated topics. While this can be frustrating for my colleagues it has led me to see patterns and have insights that otherwise it might have taken much longer to get to.
-Are there any books/movies/experiences that have influenced your outlook on life/business and if so, how?
Peter Drucker taught me that most of business is pragmatic and not some arcane science. The TED conference, which I attend religiously, has helped satisfy my desire to dive into many disciplines.
-What would you say is the best piece of advice you ever received?
It wasn’t so much a single piece of advice but more a role model. Bill Moggridge, one of the founders of IDEO and the person that first hired me as a graduate student, has constantly modeled the combination of enthusiastic optimism, playfulness and a belief in being human. I think this is the perfect starting point for design and business.
-What do you enjoy doing when you’re not working?
Reading (mostly about science and science fiction), driving my 1970 Porsche in the hills of Northern California, watching bad British TV shows
-What do you want to be remembered for?
Having used design to create some positive impact in the world
In this post I present a interview with IDEO CEO Tim Brown:
-What was your childhood like?
I grew up in a small town in the south of England close to Oxford. My father was a photographer and so I was used to the idea of image and craft. My schooling was very traditional, imagine something straight out of Tom Brown’s School Days and Queen Victoria but somehow I bucked the system and followed my passion for art. I was the one who crept off the playing field so that I could spend more time in the art studio.
-Were you always interested in business/industrial design?
Certainly not business and not really design. I only discovered design once I got to art school. In fact I thought originally that I might be a painter but quickly realized I didn’t have the talent. I was not at all entrepreneurial growing up and only really discovered business when I was forced to as the head of an IDEO office. I eventually realized that business can be thought of as a design problem and that insight has really helped me.
-What was your greatest business/design idea and what inspired it?
The realization that design thinking could be applied to a much broader set of problems than just the latest high street products. Since making this the main focus of the IDEO we have expanded considerably both in scope, impact and revenues. It was inspired on the one hand by the experience of the Dotcom crash when I realized we had too much of our business focused on tech and secondly by observing early signs of what some of our smartest clients were asking.
-How would you describe your personality/habits and how would you say they have contributed to your success?
I have fairly extreme attention deficit disorder. I get bored with thinking about one thing quite quickly and so I love to jump around between seemingly unrelated topics. While this can be frustrating for my colleagues it has led me to see patterns and have insights that otherwise it might have taken much longer to get to.
-Are there any books/movies/experiences that have influenced your outlook on life/business and if so, how?
Peter Drucker taught me that most of business is pragmatic and not some arcane science. The TED conference, which I attend religiously, has helped satisfy my desire to dive into many disciplines.
-What would you say is the best piece of advice you ever received?
It wasn’t so much a single piece of advice but more a role model. Bill Moggridge, one of the founders of IDEO and the person that first hired me as a graduate student, has constantly modeled the combination of enthusiastic optimism, playfulness and a belief in being human. I think this is the perfect starting point for design and business.
-What do you enjoy doing when you’re not working?
Reading (mostly about science and science fiction), driving my 1970 Porsche in the hills of Northern California, watching bad British TV shows
-What do you want to be remembered for?
Having used design to create some positive impact in the world
Thursday, May 27, 2010
Online Selling: eBay vs. Amazon, Conclusion
While the previous two posts provide a comprehensive evaluation of the differences between selling on Amazon versus eBay, it is probable that not every reader may be willing to plow through the mass of information. In this post, I will list some items that are typically sold, and explain why they should be sold on either Amazon, eBay, or Craigslist (which I will discuss in a later article).
1. Books->Books should always be sold on Amazon (if you have a lot of books, it is not worth selling them in bulk on eBay because it is unlikely anyone will want them). On Amazon, books generally sell very fast and at a pretty high price. Usually, when people are selling books, they have 30+ books to sell. Since Amazon makes it so easy to list books, a seller has nothing to lose listing books at 50 cents a piece. However, if you are only interested in selling books which will earn you a lot of money, the following rules generally apply:
-Hardcover books sell for a lot more than Paperback (Hardcover picture books, such as those depicting places and landscapes or cooking books generally sell for a lot).
-School help guides (i.e. SAT Tutor Books/Bio Tutor Books) generally sell for a pretty good amount as long as you don't write too much in them.
-Books more than 10 years old generally don't sell very well (unless they are very well known such as "7 Habits of Highly Effective People").
-Books that come in a series generally don't sell very well (i.e. "The Hardy Boys," "Nancy Drew," "The Boxcar Children" etc.)
-"Classics" or old books that are still very popular generally don't sell well (i.e. "The Scarlet Letter," "The Catcher in the Rye" etc.)
2. Movies/Videogames->Movies and Videogames should almost always be sold on Amazon. If you check both sites and the price of the items is generally higher on eBay than Amazon (it happens), try selling them on eBay. Generally, Amazon will offer you the higher price and the items will sell faster.
3. Electronics->Electronics can be sold on either site. For the sake of this article, let's assume that you are trying to sell a TV. The first thing to consider is the year of the TV. If it is more than 10 years old, it should be sold on eBay, since it is unlikely to have a market on Amazon. If it is less than 10 years old, the next thing to consider is whether or not the TV has been opened. If it has not been opened, Amazon is probably the way to go, since it will sell very quickly and you will get almost full price for it. If it has been opened, and is used and has some small defect (i.e. scratch or another mark), eBay would be the best site since eBay would make it easier to explain the problems with the item.
4. Large Items->An item can only be so large before the shipping costs become exorbitant and shipping the item stops making sense. If the item is over 20 pounds or doesn't fit into any box, you should consider selling the item on Craigslist or in your local community. Nevertheless, I have managed to sell a number of large items, such as a foot massager, a guitar, and a large keyboard. For the most part, large items should be sold on eBay. There is not a clear reason why, except for the fact that people that buy on Amazon are generally looking for books, movies, and other small commercial items.
5. Antiques (i.e. Records, Stamp Books, Memorabilia)-> Antiques should almost always be sold on eBay. eBay is a much more specialized site than Amazon and has a greater number of buyers that are interested in a wider variety of things. My one piece of advice is that you must price the item carefully, because if it is a rare item it has the potential not to sell which will leave you paying a fee (as I discussed previously eBay has a fee to list items and Amazon does not). While the item generally will sell, it is probable that you will not get full value for the item (expect to get 20-30% of the item's actual worth). This never used to bother me, and I don't think it will bother most people who are trying to clean out their house or get rid of old items, but if the item is sufficiently valuable, this might not be acceptable. If the antique is worth over $100, I would find another way to advertise it. Either craigslist or selling it at a live auction house would probably be the best solution in this case.
I hope this article helped to illustrate what sites are best for selling different items. If you have a specific question about an item I failed to mention, shoot me an email at JMCritelli6@Yahoo.com, I would be more than happy to help.
1. Books->Books should always be sold on Amazon (if you have a lot of books, it is not worth selling them in bulk on eBay because it is unlikely anyone will want them). On Amazon, books generally sell very fast and at a pretty high price. Usually, when people are selling books, they have 30+ books to sell. Since Amazon makes it so easy to list books, a seller has nothing to lose listing books at 50 cents a piece. However, if you are only interested in selling books which will earn you a lot of money, the following rules generally apply:
-Hardcover books sell for a lot more than Paperback (Hardcover picture books, such as those depicting places and landscapes or cooking books generally sell for a lot).
-School help guides (i.e. SAT Tutor Books/Bio Tutor Books) generally sell for a pretty good amount as long as you don't write too much in them.
-Books more than 10 years old generally don't sell very well (unless they are very well known such as "7 Habits of Highly Effective People").
-Books that come in a series generally don't sell very well (i.e. "The Hardy Boys," "Nancy Drew," "The Boxcar Children" etc.)
-"Classics" or old books that are still very popular generally don't sell well (i.e. "The Scarlet Letter," "The Catcher in the Rye" etc.)
2. Movies/Videogames->Movies and Videogames should almost always be sold on Amazon. If you check both sites and the price of the items is generally higher on eBay than Amazon (it happens), try selling them on eBay. Generally, Amazon will offer you the higher price and the items will sell faster.
3. Electronics->Electronics can be sold on either site. For the sake of this article, let's assume that you are trying to sell a TV. The first thing to consider is the year of the TV. If it is more than 10 years old, it should be sold on eBay, since it is unlikely to have a market on Amazon. If it is less than 10 years old, the next thing to consider is whether or not the TV has been opened. If it has not been opened, Amazon is probably the way to go, since it will sell very quickly and you will get almost full price for it. If it has been opened, and is used and has some small defect (i.e. scratch or another mark), eBay would be the best site since eBay would make it easier to explain the problems with the item.
4. Large Items->An item can only be so large before the shipping costs become exorbitant and shipping the item stops making sense. If the item is over 20 pounds or doesn't fit into any box, you should consider selling the item on Craigslist or in your local community. Nevertheless, I have managed to sell a number of large items, such as a foot massager, a guitar, and a large keyboard. For the most part, large items should be sold on eBay. There is not a clear reason why, except for the fact that people that buy on Amazon are generally looking for books, movies, and other small commercial items.
5. Antiques (i.e. Records, Stamp Books, Memorabilia)-> Antiques should almost always be sold on eBay. eBay is a much more specialized site than Amazon and has a greater number of buyers that are interested in a wider variety of things. My one piece of advice is that you must price the item carefully, because if it is a rare item it has the potential not to sell which will leave you paying a fee (as I discussed previously eBay has a fee to list items and Amazon does not). While the item generally will sell, it is probable that you will not get full value for the item (expect to get 20-30% of the item's actual worth). This never used to bother me, and I don't think it will bother most people who are trying to clean out their house or get rid of old items, but if the item is sufficiently valuable, this might not be acceptable. If the antique is worth over $100, I would find another way to advertise it. Either craigslist or selling it at a live auction house would probably be the best solution in this case.
I hope this article helped to illustrate what sites are best for selling different items. If you have a specific question about an item I failed to mention, shoot me an email at JMCritelli6@Yahoo.com, I would be more than happy to help.
Tuesday, May 25, 2010
Online Selling: eBay vs. Amazon, Part 2
In this post, I will expand upon the things discussed in the previous post as well as make a few new points:
1. Listing an Item
One thing I didn't fully address in the previous post is that eBay allows you to have many different items in the same listing while Amazon does not. This is because eBay allows the seller to specialize the listing more than Amazon does. The advantage of this feature is that if you have a collection of something (i.e. baseball cards or sonic the hedgehog games) you could sell them as a whole set on eBay and will probably get a lot more money and save a lot more time than you would if you had tried to sell them individually on Amazon. However, while selling items as a set works well for collections or if you need to sell your items quickly, it is often not the best strategy. If you have a set of items which are not closely related (i.e. a random collection of video games or movies) you will probably end up losing a lot of money if you try to sell the set in bulk (as a buyer this is a good way to save a lot of money). Selling a set of 20 random video games individually on Amazon will probably take less than a week (items generally sell faster on Amazon than eBay) and will probably earn you 10-15% more as a whole. As a rule, unless you are selling something as a collection or need the money very fast, Amazon is definitely the way to go.
2. Fees
Amazon and eBay have different fee structures which has many important implications for sellers. On eBay you have to pay to list every item regardless of whether it sells or not. Amazon does not charge you to list items, but has a higher commission. Assuming the item sells on eBay, the costs associated with both sites come out to about the same amount, but if it goes unsold, you risk losing money. What this means is that when selling on eBay, you have to be conscious about the item you are selling and the price you are asking. If you ask for an unrealistically high starting price and no one bids, you will take a hit. The same goes for if you are unsatisfied with the bids and remove the listing before the item sells (On eBay you are free to remove the listing a day before the auction ends regardless of how many bids there are. You can remove the item even later if you have a valid excuse such as lost inventory). On Amazon, you are free to charge any price you want and keep the item up without paying a cent. Because prices of items vary more on eBay, and because you don't have a solid benchmark as to how to price your items (on Amazon you just price it 1 cent below the competition), you generally have to do some research on the price of an item when selling on eBay to ensure that the starting price is not too high and that you will earn a sufficient profit on the item. Amazon makes it easier to list and price items and is also less risky. Generally, if you know the price of an item and are fairly confident that there is a demand for it, eBay is the way to go. If you are less sure about the price of an item or don't want to endure the cost of the item not selling, use Amazon.
3. Ratings
The rating systems on the two sites are very different. On eBay buyers give feedback on almost every transaction without the seller having to ask most of the time. The feedback is positive for the most part and if you as a seller mess up, it is generally not difficult to convince the buyer not to give you negative feedback. As a result, sellers on eBay have a great deal of feedback and once a certain feedback level has been reached (i.e. 500 ratings), it is easy to get a good idea of how reliable a seller is. On Amazon, however, it is much, much, rarer to get feedback. Even when I included a letter with every item, thanking the buyer and asking them to leave feedback, I only received feedback on about 1/10 items. If I had not done this, the number would have been more like 1/20. The reason for this is that on eBay giving feedback is very simple, while on Amazon, it is more confusing. Because it is easy to rack up a very high feedback score on eBay, it is easy to maintain a good reputation even if you receive a few pieces of negative feedback. This is generally beneficial to sellers and makes it so that those who sell a lot of items have a solid advantage over those who do not. Amazon on the other hand has a feedback system which has the potential to hurt sellers. Because feedback is so rare on Amazon, one piece of negative feedback can essentially destroy a seller's credibility, possibly bringing their satisfaction rating to less than 60%, which makes it extremely difficult to sell another item. One friend of mine had to shut down his account because of two pieces of negative feedback, even though he had sold hundreds of items without a complaint! Feedback on Amazon is also less predictable. I remember one case where a lady gave me negative feedback because she found the book she ordered to be boring (how that's my fault I'll never know). The implications of this are that as a seller on Amazon you have to beg the buyers to give you feedback and make sure that transactions go as smoothly as possible. eBay gives the seller a lot more leeway. As long as you keep your selling record on Amazon clean you should be fine, but if something goes wrong, you could be in a lot of trouble.
1. Listing an Item
One thing I didn't fully address in the previous post is that eBay allows you to have many different items in the same listing while Amazon does not. This is because eBay allows the seller to specialize the listing more than Amazon does. The advantage of this feature is that if you have a collection of something (i.e. baseball cards or sonic the hedgehog games) you could sell them as a whole set on eBay and will probably get a lot more money and save a lot more time than you would if you had tried to sell them individually on Amazon. However, while selling items as a set works well for collections or if you need to sell your items quickly, it is often not the best strategy. If you have a set of items which are not closely related (i.e. a random collection of video games or movies) you will probably end up losing a lot of money if you try to sell the set in bulk (as a buyer this is a good way to save a lot of money). Selling a set of 20 random video games individually on Amazon will probably take less than a week (items generally sell faster on Amazon than eBay) and will probably earn you 10-15% more as a whole. As a rule, unless you are selling something as a collection or need the money very fast, Amazon is definitely the way to go.
2. Fees
Amazon and eBay have different fee structures which has many important implications for sellers. On eBay you have to pay to list every item regardless of whether it sells or not. Amazon does not charge you to list items, but has a higher commission. Assuming the item sells on eBay, the costs associated with both sites come out to about the same amount, but if it goes unsold, you risk losing money. What this means is that when selling on eBay, you have to be conscious about the item you are selling and the price you are asking. If you ask for an unrealistically high starting price and no one bids, you will take a hit. The same goes for if you are unsatisfied with the bids and remove the listing before the item sells (On eBay you are free to remove the listing a day before the auction ends regardless of how many bids there are. You can remove the item even later if you have a valid excuse such as lost inventory). On Amazon, you are free to charge any price you want and keep the item up without paying a cent. Because prices of items vary more on eBay, and because you don't have a solid benchmark as to how to price your items (on Amazon you just price it 1 cent below the competition), you generally have to do some research on the price of an item when selling on eBay to ensure that the starting price is not too high and that you will earn a sufficient profit on the item. Amazon makes it easier to list and price items and is also less risky. Generally, if you know the price of an item and are fairly confident that there is a demand for it, eBay is the way to go. If you are less sure about the price of an item or don't want to endure the cost of the item not selling, use Amazon.
3. Ratings
The rating systems on the two sites are very different. On eBay buyers give feedback on almost every transaction without the seller having to ask most of the time. The feedback is positive for the most part and if you as a seller mess up, it is generally not difficult to convince the buyer not to give you negative feedback. As a result, sellers on eBay have a great deal of feedback and once a certain feedback level has been reached (i.e. 500 ratings), it is easy to get a good idea of how reliable a seller is. On Amazon, however, it is much, much, rarer to get feedback. Even when I included a letter with every item, thanking the buyer and asking them to leave feedback, I only received feedback on about 1/10 items. If I had not done this, the number would have been more like 1/20. The reason for this is that on eBay giving feedback is very simple, while on Amazon, it is more confusing. Because it is easy to rack up a very high feedback score on eBay, it is easy to maintain a good reputation even if you receive a few pieces of negative feedback. This is generally beneficial to sellers and makes it so that those who sell a lot of items have a solid advantage over those who do not. Amazon on the other hand has a feedback system which has the potential to hurt sellers. Because feedback is so rare on Amazon, one piece of negative feedback can essentially destroy a seller's credibility, possibly bringing their satisfaction rating to less than 60%, which makes it extremely difficult to sell another item. One friend of mine had to shut down his account because of two pieces of negative feedback, even though he had sold hundreds of items without a complaint! Feedback on Amazon is also less predictable. I remember one case where a lady gave me negative feedback because she found the book she ordered to be boring (how that's my fault I'll never know). The implications of this are that as a seller on Amazon you have to beg the buyers to give you feedback and make sure that transactions go as smoothly as possible. eBay gives the seller a lot more leeway. As long as you keep your selling record on Amazon clean you should be fine, but if something goes wrong, you could be in a lot of trouble.
Thursday, May 13, 2010
Online Selling: eBay vs. Amazon, Part 1
When people think of online selling, eBay is the first site that comes to mind. Amazon.com, however, is superior to eBay when it comes to selling a number of items such as books, movies, and video games. Below, I will describe some of the differences between the two sites and describe when it is preferable to use one over the other:
1. Listing an Item
Listing an item on eBay requires the seller to categorize the item, name it, describe it, find or take a picture, pick a price to start the bidding at etc. Amazon.com, on the other hand, makes it much easier for sellers to list items. All the seller has to do is search and find the item they're selling, and then describe it's condition. Almost every item already has a name, picture, and description included. For generic items, such as books, video games, board games, movies, or electronics, Amazon is far superior to eBay because of the ease of listing the items. When selling rarer items (which might be difficult to find on Amazon), or those which are very old or in bad condition (in which case taking your own picture would be the best option), eBay is the better site, since it has a wider range of items, lets you give a more specific description, and lets you take your own picture.
2. Pricing
eBay and Amazon have different pricing structures. eBay has an auction structure, in which the seller must decide on the length of the auction and the minimum bid. Also, the seller has an option of offering a "Buy it Now" price, which gives the buyer the option of paying a single price and snagging the item without having to participate in the auction. Amazon.com doesn't use auctions: it just offers the buyers a single price. As a seller on Amazon.com, the site alerts you to the price that other sellers are charging for the same item. This makes it convenient to price your item (you just put it 1 cent below the competitor's price). Also, if competing sellers lower the price of their item (which they probably will do to stay competitive), the site lets you know and makes it easy for you to keep lowering your price to beat out the competition.
As a seller, I've found that items generally sell a lot faster on Amazon than eBay and that I usually get more money for my items on Amazon (by pricing items 1 cent lower than the competition it's hard to get ripped off). eBay is usually more erratic: there are times when you get lucky and earn a huge surplus for your items and there are times when you get completely ripped off. If you can, try to sell items on Amazon. When Amazon's pricing system fails is when the seller is selling an item that is very rare or obscure. When the item is very rare, there might be one or two random prices on Amazon which don't reflect the item's true value. One example was a rare record I tried to sell, in which the two competing prices were $45 and $80 (even though the record wasn't worth more than $15). If you try to sell an obscure item like this, it is likely that you will overprice it and it will never sell. Another issue for rare items is that there may be no entry for the item on Amazon, which means that you will have to create one (this involves finding a picture, description, price, etc). This is a lot of work and should be avoided. Because eBay is likely to have sellers with a wider range of items and because eBay allows you to create a more specific description, eBay would be the better site in this case.
3. Payment/Shipping
The two sites differ in the way they handle shipping. eBay, requires the seller, before even listing the item, to determine how much they want to charge buyers for shipping. This forces the seller to weigh the item, and than do some research to determine which type of postage s(1st class, media, etc.) would be best to ship that item and how much the shipping is going to cost the seller. This can be extremely annoying. The one advantage is that once you receive payment from the buyer through PayPal, eBay has already paid for your postage (by removing money from your payment account) and has your shipping label ready. Nevertheless, shipping on eBay is not perfect. Amazon's shipping system is better in almost every case. Amazon charges the buyer a flat rate to cover the seller's shipping costs (usually $2.99 or $3.99 depending on the item). When buyers pay for items, money is sent to an account on the Amazon sellers site, which transfers the money to the seller's bank account every week or so. To ship the item, the seller only has to print out their return address, the buyers address, and then pay for postage at the post office. This is a much quicker and more efficient system then eBay's, but sometimes backfires when the cost of postage for the seller is more than the cost charged to the buyer (this is very rare). As long as you are selling relatively small items (3lbs or less), Amazon's shipping model is a lot easier and more efficient. For larger items, where the shipping may be more complicated, eBay's option of choosing the price you want buyers to pay for shipping is probably better.
1. Listing an Item
Listing an item on eBay requires the seller to categorize the item, name it, describe it, find or take a picture, pick a price to start the bidding at etc. Amazon.com, on the other hand, makes it much easier for sellers to list items. All the seller has to do is search and find the item they're selling, and then describe it's condition. Almost every item already has a name, picture, and description included. For generic items, such as books, video games, board games, movies, or electronics, Amazon is far superior to eBay because of the ease of listing the items. When selling rarer items (which might be difficult to find on Amazon), or those which are very old or in bad condition (in which case taking your own picture would be the best option), eBay is the better site, since it has a wider range of items, lets you give a more specific description, and lets you take your own picture.
2. Pricing
eBay and Amazon have different pricing structures. eBay has an auction structure, in which the seller must decide on the length of the auction and the minimum bid. Also, the seller has an option of offering a "Buy it Now" price, which gives the buyer the option of paying a single price and snagging the item without having to participate in the auction. Amazon.com doesn't use auctions: it just offers the buyers a single price. As a seller on Amazon.com, the site alerts you to the price that other sellers are charging for the same item. This makes it convenient to price your item (you just put it 1 cent below the competitor's price). Also, if competing sellers lower the price of their item (which they probably will do to stay competitive), the site lets you know and makes it easy for you to keep lowering your price to beat out the competition.
As a seller, I've found that items generally sell a lot faster on Amazon than eBay and that I usually get more money for my items on Amazon (by pricing items 1 cent lower than the competition it's hard to get ripped off). eBay is usually more erratic: there are times when you get lucky and earn a huge surplus for your items and there are times when you get completely ripped off. If you can, try to sell items on Amazon. When Amazon's pricing system fails is when the seller is selling an item that is very rare or obscure. When the item is very rare, there might be one or two random prices on Amazon which don't reflect the item's true value. One example was a rare record I tried to sell, in which the two competing prices were $45 and $80 (even though the record wasn't worth more than $15). If you try to sell an obscure item like this, it is likely that you will overprice it and it will never sell. Another issue for rare items is that there may be no entry for the item on Amazon, which means that you will have to create one (this involves finding a picture, description, price, etc). This is a lot of work and should be avoided. Because eBay is likely to have sellers with a wider range of items and because eBay allows you to create a more specific description, eBay would be the better site in this case.
3. Payment/Shipping
The two sites differ in the way they handle shipping. eBay, requires the seller, before even listing the item, to determine how much they want to charge buyers for shipping. This forces the seller to weigh the item, and than do some research to determine which type of postage s(1st class, media, etc.) would be best to ship that item and how much the shipping is going to cost the seller. This can be extremely annoying. The one advantage is that once you receive payment from the buyer through PayPal, eBay has already paid for your postage (by removing money from your payment account) and has your shipping label ready. Nevertheless, shipping on eBay is not perfect. Amazon's shipping system is better in almost every case. Amazon charges the buyer a flat rate to cover the seller's shipping costs (usually $2.99 or $3.99 depending on the item). When buyers pay for items, money is sent to an account on the Amazon sellers site, which transfers the money to the seller's bank account every week or so. To ship the item, the seller only has to print out their return address, the buyers address, and then pay for postage at the post office. This is a much quicker and more efficient system then eBay's, but sometimes backfires when the cost of postage for the seller is more than the cost charged to the buyer (this is very rare). As long as you are selling relatively small items (3lbs or less), Amazon's shipping model is a lot easier and more efficient. For larger items, where the shipping may be more complicated, eBay's option of choosing the price you want buyers to pay for shipping is probably better.
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