Simplx Blog

I have said it before and I will say it again…..Simplx is the best way, and the only way in my opinion, to truly be successful with drop shipping.  I will happily challenge anyone to a test of success on eBay with their drop ship method of choice and even let them choose the metrics to determine the winner (as long as the metric doesn’t measure wasting time or money :).  I don’t say that to sound arrogant or prideful; my intention is to share my passion and belief from years of experience and success with Simplx.

There are several fundamental problems with other drop shipping models that make it difficult or impossible to be successful.  When I refer to other drop shipping models I mean getting involved with a company that sells you a list of drop shippers for you to contact and establish a relationship, or stores their own inventory in a warehouse and charges you a membership fee to give you access to that inventory, or that even sets up the relationships on your behalf and then charges you a drop ship fee for each product and/or a monthly access fee for the service.  I should probably dedicate a blog to discuss the fundamental problems of the different drop ship models, but for this blog I want to focus on the pitfalls to watch for when using Simplx

Simplx allows you to work with retail merchants that truly understand the supply chain.  These merchants know how to service a customer and what it means to get a quality product at the lowest price in the hands of a consumer.  Simplx allows you to work with these merchants and as such eliminates most of the fundamental problems that other drop shipping models have.  Unfortunately using Simplx can still be difficult and after a discussion with our trainer Riley we identified 4 main pitfalls that many Simplx members run into.  Hopefully a discussion about these pitfalls will help steer our valued and prospective members in the right direction.

PITFALL #1 — MANAGING MERCHANT RELATIONSHIPS

Even though Simplx sets up a commissionable affiliate relationship with hundreds of retail merchants, as a Simplx member you will still be required to set up a consumer account with that merchant for purposes of keeping your address and payment methods on file.  This is no different that making a purchase online for yourself from your favorite store and setting up an account.  I recommend that you set up an email address specifically for your Simplx drop shipping and use that when creating an account at a Simplx merchant.  The biggest pitfall that Simplx members run into with the merchant relationship is when they pick up the phone and contact that merchant directly.  That conversation often goes something like this:

NEW SIMPLX MEMBER: Hi, my name is Adam and I just signed up with Simplx to drop ship your products and had a question about a product on your website.

$6/hr CUSTOMER SERVICE REP: Umm, I’m sorry sir but we don’t do drop shipping and I don’t know what you mean by Simplx.

NEW SIMPLX MEMBER: Huh? I’m on the Simplx website right now and your company is listed right here and it says you will pay me 10% commission for every product that I sell.

$6/hr CUSTOMER SERVICE REP: Hmm, well there must be some kind of mistake or misunderstanding because I’ve never heard of Simplx.

NEW SIMPLX MEMBER: (with frustration and budding anger) Ok, well I’m going to call someone over there because something’s not right here……click.

What just happened?  Well, for starters Adam didn’t get his questioned answered about the product on the website.  On top of that he has now upset himself for no reason and he is no longer focusing on making money with his Simplx account.  What Adam didn’t know before he started his conversation with xyz merchant is that the $6/hr customer service representative will not be familiar with the names of the affiliate relationships that xyz merchant has set up.  In fact it is likely that the he doesn’t even know that their company has contracted affiliate relationships.  Secondly it is likely that the he is not familiar with the term drop shipping.  Have you purchased a gift for someone online and had that merchant ship that product to your family member?  If yes, then you have already participated in dropshipping minus the economical aspect that Simplx provides.  In my attempt for a little entertainment with this example I hope it successfully illustrates the pitfall to avoid.  If you have a question for a Simplx merchant about product then please contact them and get your question answered.  If you have a question about your Simplx account or a problem with a Simplx merchant in regards to your account, then contact Simplx and let us help you get it straightened out.

PITFALL #2 — COPYRIGHTS AND VERO

Through Simplx affiliate relationships our members may use images and content from a merchant website for the purpose of promoting and selling those products.  Even though members may have this legal right, product manufacturers may still enforce copyrights on their products through eBay’s VeRO program which stands for (Verified Rights Owner.)

eBay is committed to protecting the intellectual property rights of third parties and to providing its users with a safe place to trade. eBay created the Verified Rights Owner (VeRO) Program so that intellectual property owners could easily report listings that infringe their rights. It is in eBay’s interest to ensure that infringing items are removed from the site, as they erode buyer and seller trust.

The biggest issue we have seen with the VeRO enforcement with Simplx members usually has to do with the stock photo that you pull from a merchant’s website that belongs to the manufacturer.  If the manufacturer doesn’t like your auction for whatever reason they have the right and power through eBay to close down your listing.  This has happened only a few times in the past with some of my listings.  If I still wanted to sell that particular product then I would either edit the stock image by putting other images or words over the top of the image or I would purchase the product for myself and take my own photo and then use that photo for all of my listings.

PITFALL #3 — GROWING TOO FAST

See my previous blog PayPal Woes.

PITFALL #4 — FINDING NEW PRODUCTS TO SELL

These pitfalls weren’t listed in any order of importance, but if they were then this would definitely be the number 1.  We get more requests for help from new Simplx members wanting to find products that will sell well from their own website or from eBay than any other request.  The great thing about the Simplx model unlike any other drop shipping models is there are millions of different products to search through and sell.  What it really means is once you begin having success with your Simplx account, you don’t have to be concerned about telling your neighbor or your brother about your success with the fear that you may be creating a competitor for yourself.  There is plenty of room for you and for your brother to both be successful selling different products on eBay through the Simplx network.

With that being said let’s address this topic of finding new products.  First, make sure you are familiar with the Simplx Calculator and you use it frequently in the beginning to determine which products will sell well.  After a couple of months of searching through products to sell, you will get a good feel for profitable selling products without having to return to the calculator each time.  Second, make sure you subscribe to newsletters to at least 10 or 15 of the merchants you think you would like to use to drop ship products.  Third, almost every merchant has a “deals” page and you need to browse through those deals on a regular basis.  Fourth, ABB (always be browsing)…..the more you look at products the easier you will notice it becomes to find products to sell.  Once I start plugging products into the calculator I usually find something I want to list for sale after 6 to 8 products.  During the Simplx training session on “How to Find Hot Selling Products” you will be directed to several other lists and resources that you can turn to in order to find the hottest selling products on eBay as well as product trends that you will find useful in your product search.  Lastly, don’t give up.  There are plenty of products for you and your brother to list and sell to reach your financial objectives, but you need to stay committed and never give up.  Be sure to use the hot line if you ever find yourself running into the wall.  The process is difficult at first, but it does become very easy with time.

Popularity: 4% [?]

After 5 years of learning why some Simplx members succeed and some members fail we have identified a very simple pattern that if Simplx members will follow will lead them to have that first taste of success on eBay.  We have learned that the difference between success and failure is primarily based on a new members’ experience within the first month.  As such, our focus for the new year for every new Simplx member is to help each business sell at least one product from their website or on eBay within the first 30 days of joining Simplx.

Here are the 5 Simple Steps to Simplx Success that we will be emphasizing with every new Simplx member for 2010:

1. Get an eBay and PayPal account

2. Build your eBay rating to over 100

3. Sell at least 10 items from your garage on a $.99 no reserve auction

4. Identify 5 products from the Simplx network that will make a $10 profit based on the Simplx calculator

5. List and sell the 5 products, and then follow up with the drop ship hot line for feedback.

All of the training sessions being offered by Simplx now focus on the steps of success above.  Many new members have the tendency to jump ahead quickly with their business and in so doing they skip over the basics and fail altogether.  My message to all new members is to take it slow and focus on the steps above.  Take the first 30 days of your Simplx experience to make your first $10 or $15 profit.  Use the subsequent months to build off of the foundation of learning from the first month and grow your business at the rate that meets your business objectives.  Your chances of success will increase dramatically and your ability to grow your business with your new found knowledge will be greatly improved.

Best of luck to all and Happy New Year!  May 2010 be a profitable one for all of us.

Adam

Popularity: 6% [?]

Before PayPal put the brakes on my extremely high volume low profit margin eBay sales model I began testing out a newly added merchant on the Simplx network that would allow me to add 1.5% to my bottom line profits.  With $300,000 monthly volume an additional 1.5% adds $4,500 of extra spending cash for me each month.  So naturally if that option were possible I was interested in exploring it.  The merchant is the American Express Gift Card program.  An American Express Gift Card is a pre-loaded card that works just like an American Express credit card or a charge card, which means you can use it anywhere American Express is accepted.

The cards can be purchased in $25 increments in amounts up to $3000.  Anytime I purchased a gift card I would always do it with my credit card that gave me 1% cash back.  So my MasterCard would pay me 1% cash back when I purchased the gift cards and the Simplx program pays me 1.5% cash back for making the purchase.

There are a few fees that get charged up front by American Express for the service, which I found offset my cash back by about .3% leaving me with more than 1% in cash back savings and well worth the extra step for the sales volume.  Also, the gift card program only allows orders with a maximum of $5,000 total so I would have to place multiple orders in order to keep the flow of volume moving through the AMEX gift card program.  You can link over to the AMEX corporate gift card ordering system from the Simplx link merchant, which allows orders up to $75,000, but I wasn’t sure if it would still qualify for the Simplx cash back.  I also didn’t have a need to test that out since I was making it work with the $5,000 maximum limit per order.

Visit the AMEX gift card website here.

Popularity: 9% [?]

Ok so fast growth on eBay isn’t all its cracked up to be.  When I got aggressive using my Simplx account to sell on eBay I had originally set the goal to grow from $250,000 in annual sales (that I was comfortably doing) to $10 million to $15 million over the course of the next year.  The Simplx model provides me with that opportunity for that type of growth, but I learned that just because you can grow fast doesn’t mean you necessarily should.  So the purpose of my blog entry today is to share my growth experience and temporary demise with my eBay account to hopefully help you still clear of the same pitfall.

In July of this year I set the goal to start growing my account and instantly grew my account from $20,000 in June sales to $300,000 in July sales.  That was where we first went wrong.  I have had a PayPal account opened for years showing good consistent clean processing volume, but the moment my account jumped that dramatically I found myself on a conference call with my personal PayPal account manager and a lady (whose name we do not speak — so I don’t throw up in my mouth).  The determined necessary action was that a reserve account should be implemented immediately to help protect PayPal in the amount of 10% of all volume for a 4 month period.  I knew immediately that on a 5% to 7% profit margin I wouldn’t be able to make the model work with a 10% reserve.  Essentially that means that I would run a negative cash flow model of 5% for 4 months.  At processing volume of $300,00 per month (with zero growth)  I would have to have $60,000 of extra available cash to just break even (not including the value of my time or the time of employees that help run the business).  I explained this to PayPal and said that they could go ahead and shut the account down because I couldn’t run a negative cash flow model.  The decision that followed (since they did want to work with me and show they were flexible) was to lower the reserve to 5%.  My response to them was, “ok let’s give it our best shot.”  Unfortunately I think I saw the writing on the wall before we ever began…..

PayPal’s Perspective

Now to be fair to PayPal and to the lady of whose name we do not speak, I think it is only fair to try and understand things from their perspective with the end of making the right decisions in your business to “stay under the radar” and know PayPal’s response (or any merchant accounts’ response for that matter) to changes they analyze in your business.  When you process a credit card a merchant account provider (such as PayPal) is extending a form of credit to your business.  They are trusting that when you take money from your customer, you are giving them what you promised and that they will be happy.  If not, the customer has the option through credit card regulations to dispute the charge based off a set of dispute reason codes.  Typically the dispute liability period is 6 months.  That means that your customer has the option for up to 6 months after you have taken and spent their money to contact their credit card company and dispute the charge.  What if you spend that money and 6 months later that customer disputes the charge with good reason.  If you don’t have the money to put back in your PayPal account then ultimately PayPal takes that loss and they will do their best to try and recover the funds from you.  Now from a credit extension perspective with the volume on my account PayPal looks at the liability period over 6 months of processing with the volume I did in July at $1,800,000.  Now we all know that it is not possible to collect $1,800,000 in sales over 6 months and have all of those customers not be happy, but it is possible that someone could push customers off for a month or so before PayPal even knew there was a problem, and PayPal is not interested in getting stuck holding a $300,000 bag of debt from doing business with one customer.  Now we both know that neither you or I would do that to our merchant account provider, but apparently there are people out there that have done that or that intend to do that which is why this industry is so highly regulated.

Visa and MasterCard Regulations

PayPal just like any merchant account provider is put under strict regulations by Visa and MasterCard to help ensure the integrity and safety of the credit card processing industry.  Consumers drive the credit card business and so naturally the rules and regulations are put in place mostly to protect consumers.  One of those regulations that will help you understand PayPal’s response to disputes and charge backs that you may receive has to do with the ratio of charge backs to total sales that your account receives.  PayPal operates a little differently than normal merchant account providers in this regard because they are listed as a master merchant with Visa/MasterCard and not separate merchant accounts, but the sum of their total sales receipts is still scrutinized and analyzed by the same ratios and so PayPal still holds merchants to the same standard to make sure their combined total complies.  What those ratios and regulations say is that if a merchant receives more than .5% in charge backs to total volume of sales or to number of sales then the merchant account provider is required to report that merchant to Visa/MasterCard as a high charge back merchant.  If that merchant remains as a high charge back merchant for several months in a row then Visa/MasterCard begin assessing fines on the merchant account provider.  If a merchant receives more than 1% in charge backs and the merchant account provider chooses to keep their account open, in addition to the increased fines, the merchant is required to report to Visa/MasterCard the merchant as an excessive charge back merchant along with their plan as they have discussed with the merchant to reduce the charge backs below the maximum allowable limit of .5%.

PayPal Dispute vs Charge back

I have been asked this question before about what the difference is between a charge back and a PayPal dispute.  In short, a PayPal dispute is PayPal’s internal method for dealing with a charge back without the customer having to involve their credit card company and subject PayPal to handling the matter according to their process and fees.  Most dispute processes can be resolved without involving PayPal at all.  When a dispute is first opened it provides a medium for you to communicate with your customer and find a resolution to the problem.  If the dispute can’t be resolved then either you or your customer may escalate the dispute to a PayPal claim at any time.  Then a PayPal representative will get involved in the process, review the current correspondence, request additional information, and make a final decision.

Finishing my story…

After PayPal implemented the 5% reserve we were able to keep up with the orders for a couple of months, but not for the full 4 months that PayPal was requiring.  I have $50,000 in a PayPal reserve account that was money needed to process orders, but we slowly started falling behind.  As we fell behind on orders the number of PayPal disputes began to rise, and PayPal’s response to the increase in disputes was to put a 100% reserve on the account until we could demonstrate that all of the orders were being fulfilled in a timely fashion.  Now I don’t know about you, but I decided that it is very difficult to fulfill orders and conduct business when I don’t have access to 100% of the funds that the business is generating.  At this point I got my personal representative and his boss from eBay involved to see if they could help talk some sense into PayPal.  eBay has been excellent to work with through this dilemma.  My manager and his boss even drove down to my office and met with us for a few hours.  However their efforts in trying to get PayPal on the same page with us were futile and ultimately PayPal’s decisions have not only caused the initial predicament, but have perpetuated the problem beyond recovery.  I did learn however that there is a point that you can become numb to the sting of waking up in the morning and finding that first negative feedback on your account.

Resolution and moving forward

At this point the restrictions put in place have rendered impossible our efforts to salvage either of the accounts that we have used in this business.  After discussing this further with eBay and PayPal we will issue refunds to the customer that haven’t yet received their products from the huge reserve account that they are holding and the remainder of the funds will be released according to the original calendar put in place.  We are starting fresh with a new eBay account and we will be using a different merchant processor for new eBay orders, which may limit our market slightly for those customers that prefer to use the “funny money” sitting in their PayPal account, but not enough that we still won’t be able to hit the new growth objectives.

Lesson Learned

Everybody wants to grow and grow fast, but just because you can does not mean that you should.  After this experience and discussing this growth with PayPal, I would say that a 20% monthly growth objective will help you reach whatever sales objectives you put in place for your business while being conservative enough for your merchant account processor to avoid a reserve.  The Simplx model is a high volume low margin model that I have proved just does not work with a reserve, unless you have the cash to fund the negative monthly cash flows and want to use it to grow quickly with the expectation that you will have a reserve.  I think the most important thing is that you communicate with your merchant account processor.  Let them know the details about how your business model works up front.  Ask them what you need to do to avoid a reserve.

Popularity: 15% [?]

It’s finally here.  Our developers have developed a sleek and sexy new little tool to help Simplx members quickly identify a product that will successfully sell on eBay and make a profit.  To test drive this tool now click on the link below.  To learn about the calculating logic of the calculator you can read the ABOUT THE CALCULATOR section at the bottom of the page.

SIMPLX CALCULATOR

Popularity: 16% [?]

I’ve received a lot of random questions over the past couple of weeks about some of the external variables that can affect your Simplx business.  I could probably dedicate separate blogs to each variable, but instead decided to cover a broader list of variables with perhaps a little less detail and then will be glad to answer other questions that may arise from this blog through your emails and posted comments.

PayPal

If you have ever used PayPal to receive any decent amount of funds you have most likely experience the joys of them freezing your funds until the customer receives the product, they leave positive feedback, you upload a tracking number, or a combination of one of those.  There is an entire community that has formed online at paypalsucks.com that have been less than satisfied with their PayPal experience.  I think if anyone should have a beef with PayPal it would be me.  I shared an experience in a blog about a month ago with my first experience where PayPal didn’t provide the proper seller protection and I lost over $800.  Today PayPal has implemented an even stricter set of guidelines because of the tremendous amount of volume my account does that has made my small margin business even tighter and more difficult in general to be competitive in the eBay marketplace.  I received a call from PayPal 2 months ago from their risk management department with the request to implement a 10% rolling reserve for 6 months on my account.  We had a lengthy discussion about my business model and in short I told them that I can’t make this small margin model be cash flow positive with a 10% reserve.  They agreed to a 5% rolling reserve over a 4 month period, which I reluctantly agreed to, but accepted the challenge with a little enthusiasm.  If I could make this model still work with this new guideline then it should be that much easier for all of our Simplx members to make their model work without that restriction.  I added a new column to my eBay sales tracker with the description “cash flow.”  I modified my original goal slightly of making at least a $10 profit on every product to producing at least $10 of positive cash flow.  If I could produce at least $10 of positive cash flow then I would be making much more than $10 profit for that product.  I just have to wait 4 months before PayPal releases those profits to me, but at least I have the cash flow now to make it worthwhile.  I just look at it as a forced savings account :).  Those first funds are set to be released in December and I’m on track to have 6 figures in my forced savings account by the time those funds are released.

A few other thoughts on using PayPal…..it is not required to run a successful Simpx business, but I think it is worth whatever extra hassle you feel like they cause by opening up your market to buyers that prefer to use PayPal.  If you have already decided to join the banter of the paypalsucks.com group then you should seek out other merchant account solutions that can integrate with services like Auctiva that make it easy to still automate the payment options for your buyers at the close of the auction.  If you do get plan on getting aggressive quickly with your Simplx business and are choosing to use PayPal, be prepared for the “hassle” when you reach your first $10,000 in sales or so.  Make sure you have the cash flow on your credit cards to continue to place orders and run your business as you may not have access to the funds that PayPal holds for a couple of weeks while you provide them with the information they are requesting and while they verify that information.

Price changes

It is not uncommon to find a product to list in the Simplx network, list it for sale on eBay or your own website, have a customer buy that product from you, and then return to the supplier to place the order only to find out that the price has changed.  Now this can go both ways.  It is definitely more enjoyable to find that your supplier has lowered that price on a product when you are ready to place your order, but it can be a frustrating to see that they have raised the price on the product.  I have had more price drops than price increases, but even though my net profits from these changes are greater, I always try to have a back up supplier for every product I plan on selling so I don’t get caught with my pants down…..I just don’t like seeing red on my eBay sales tracker.

Out of stock

If I sell an item that goes out of stock at the supplier I was planning on fulfilling the order her is what I do in this order:

1. Fulfill the order through my backup supplier
2. If not, I contact the buyer immediately and provide them with some options

a. Option 1 — Provide them with an alternate comparable or better product at no additional charge to them as long as it doesn’t cost me more.

b. Option 2 — Provide them an immediate and full refund.

c. Option 3 — Wait for the product to come back in stock and then ship it to them.

I learned quickly that when I just chose one of these options for the customer I can never satisfy everyone.  Even with the option to upgrade the customer without providing them with other options left me with a negative feedback.  So the best thing to do is provide your buyer with options all of which still allow you to avoid taking a loss on the transaction while satisfying your buyer.

Feedback

eBay just launched a new feedback system.  I think I will dedicate a separate blog to discuss the new focus on 1’s and 2’s on DSR’s as well as the new Top Rated Seller program.  I would like to discuss the external variable that is often outside of you control with the feedback system.  There is nothing more frustrating than providing top notch customer service and the best possible buyer experience to your customers only to wake up one morning and see that a customer left you a negative feedback.  Fortunately eBay provides a fairly new system that allows you to mutually remove a limited amount of negative and neutral feedbacks.  For every 1000 feedbacks you receive eBay allots 5 feedback revision requests.  You can go to the eBay help menu and do a search for feedback request to access the page to initiate the request.  You need to be sure that you have clearly communicated with your buyer about why they left you a negative and neutral feedback before submitting the request.  Once the request has been submitted you lose that feedback request whether the buyer agrees to revise their feedback or not.  Make sure you have fully resolved their problem and they have agreed to revise their feedback before submitting the request.

Sales Tax

This seems to be a common questions on how sales tax should work with a Simplx drop shipping business.  You need to be familiar with the sales tax laws for your state as well as the sales tax requirements in the states that your supplier is required to remit sales tax.  When you list a product on eBay it is easy to select the states that you are required to remit sales tax.  eBay has their own sales tax calculation tables so you just check each state that you are going to be charged the tax when you place the order.  The sales tax is passed along from you to your supplier and then to the state.

Popularity: 16% [?]

In July 2009, eBay made an announcement of some changes they would be implementing on their site in the following areas:

• Rewards for sellers delivering great buyer experiences

• Enhanced search presents more relevant listings

• Easier, more profitable selling on eBay

As of October 1, 2009 these changes will have officially gone into effect. Below are just a few of the updates that could potentially affect your listings.

The following bulleted points are taken from that document:

• Optional buyer charges for shipping insurance removed: The insurance option creates the perception that buyers need to purchase shipping insurance as a protection on eBay, an experience they’re not accustomed to on other ecommerce sites. In fact, sellers have always been responsible for their items until they arrive safely in their customers’ hands. That’s why shipping insurance will no longer be included in the purchase flow as either an option or requirement for buyers.  Of course you can choose to purchase insurance on shipments, but not ask buyers to buy insurance separately. In some categories like Antiques, Collectibles, and Jewelry, shipping insurance for sellers is essential. When appropriate, you can include the cost of insurance in your item or shipping price.

• Listing features discontinued: To keep the emphasis squarely on relevance and quality, we’re make changes to available features, retiring some and making changes to others:  Featured Plus, Border, Highlight, Gift services, ProPack and Homepage Featured will no longer be available. These features no longer appear in any listings as of October 1, and sellers who purchased them before that date will be issued appropriate credit.  Featured First will be available only to Top-rated sellers and won’t be displayed when buyers select a different sort order than Best Match.  When sellers purchase Featured First or Bold along with International Site Visibility, these features will be displayed only on the site of purchase to ensure that domestic listings get top visibility.

• New guideline for using the Buy It Now feature with Auction-style listings: The Buy It Now price you set when listing your item must be at least 10% higher than your auction start price for that same item.  All Auction-style listings with the Buy It Now feature listed on or after October 1, 2009 will be required to follow this new guideline.

The above are only a few of the many updates and changes that are coming. Review the full list of the upcoming changes to insure your listings with comply, by visiting the following link:

http://pages.ebay.com/sell/July2009Update/Details/index.html

Popularity: 16% [?]

Recently I discovered a whole new market that I have always made a point to avoid in the past and let me tell you why…..

Nine years ago I was putting myself through the Marriott School of Management at Brigham Young University by selling stuff on eBay.  At that time I was buying a lot of stuff off uBid.com in bulk and then I would resell it on eBay and on the bulletin board on campus.  My first large bulk purchase after having a little success was a lot of refurbished laptop computers that cost me about $10,000.  I sold a few off of the bulletin board on campus to students that I met in the Cougar Eat to show off the item before we agreed upon an amount, and the rest I sold on eBay where I discovered that the fees that they charged were much more enduring than the personalities I had to deal with on the face to face purchases.  Back then my strategy was to list a laptop at a $.99 no reserve auction with a buy it now option at a price usually a couple hundred dollars above what the average selling price was for the laptop.  All of the laptops closed within the average selling price range except for one.  A buyer from Russia paid the extra $200 for the buy it now option along with an extra $100 for faster shipping.  I was ecstatic!  I collected about $1000 total from this fellow for a laptop that only cost me about $600.  The buyer stated that he was trying to receive it in time for a birthday gift and after several emails we had back and forth I felt comfortable enough to release the shipment via an expedited shipping method to Russia….

One month later….

I received a peculiar email from PayPal with a warning about my transaction with the Russian stranger.

We have reason to believe that the transaction with which you recently participated with xyz buyer may have been fraudulent.  If you haven’t shipped this product yet please do not do so until we have concluded our investigation….

What??? Are you serious?  I get an email from PayPal 30 days after I complete the transaction on eBay with an outrageous assumption that I may have not shipped the item yet?  If I waited 30 days to ship any of my items now, PayPal would certainly shut my account down.  Five days after receiving that initial email I received a heart dropping follow up email from PayPal.  They confirmed that the transaction had in fact been completed fraudulently without the consent of the true owner of the PayPal account.  When I logged into my account I saw 2 new changes to my account 1)the word limited next to my PayPal account balance and 2)dark red bolded numbers with a minus sign totaling about $1000 next to my account balance.

I fussed and moaned and probably even cried to PayPal about what they had done to me.  Each person I talked to gave me the same half sympathetic listening ear followed up with an ultimatum to bring my account balance positive.  As a poor starving college student that money was long since spent.  I had a tough decision to make.  Leave PayPal holding the bag because I felt like they deserved it for not protecting me and kiss my relationship with them goodbye, or….bite the bullet, suck it up, pay the dues of the school of hard knocks, and make it right by transferring a $1000 from my bank account back into my PayPal account.  I think it is evident what I decided to do by the fact that today I run millions of dollars through my PayPal account every year.

Nine years ago I vowed that I had forever learned my lesson with International buyers and would never make the same mistake twice.  This year I changed my mind and here’s why….

PayPal security has evolved over the years and continues to provide greater protection for sellers for both domestic and International transactions.  In the past PayPal only provided protection for transactions that were shipped to confirmed PayPal addresses with the U.S.  Although PayPal still doesn’t provide the Confirmed address option for International PayPal account holders, they do provide additional verification processes that International account holders must complete.  If they do then you will receive a payment notification from your buyer that shows “Seller Protection – Eligible” written in green on the email receipt.  There are still some requirements as a seller that you must follow in order to qualify for the seller protection, but let me summarize this statement by saying that if those security measures were in place today as they were 9 years ago, I would have still made the decision to ship that laptop.

Today about 1/4 of the volume that I do on eBay is done so as I openly advertise my products for sale to International buyers.  About 3/4 of all profits that I make each day come from International buyers…..need I say more.  I still use the Simplx network to process all orders for my International buyers, but because most of the merchants on the Simplx network won’t drop ship directly to my International buyers I instead place the orders with the Simplx merchants to ship to my office and then I repackage them and put them in the mail to my buyers.  If I average about $15 on a drop ship order that I place through the Simplx network, then through my International orders I average about $70 for that same product.

So my message today is to explore the International realm of eBay buyers…..you could be missing out on thousands of dollars of profits by trying to avoid the Russian scammers, but even if you are scammed once for $1000 is it still worth the efforts and the hassle if your were not scammed for $10,000 of profits with International orders?

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The question I see the most from Simplx customers and probably the most widely misunderstood concept about how the Simplx program works is grounded in the following 3 statements that I see too often from Simplx customers.

Simplx just links me to retail stores that anyone can buy from.

Why would anyone buy products that I list on eBay at a higher price if they can get that same product at a lower price from the same retail store listed as a Simplx supplier?

Simplx only provides me 2% cash back on xyz supplier that I use to list my products, which isn’t even enough to cover my eBay and PayPal fees.

The fallacy in these statements leaves new Simplx customers believing some of the statements I posted and addressed in the blog a few weeks ago, “Is Simplx A Scam?”  Which again, it is sad to think that Simplx is the perfect way in this down economy for people to find financial security, but some don’t end up doing so because they start to believe their own lies.  It is easy for me to boldly discredit some of the fallacious comments and naysayers I have seen over the years because of the many successful Simplx customers and my own personal Simplx eBay account.  My personal success is unique, but not impossible for other Simplx customers to achieve.  I don’t have any other tools or resources that other Simplx customers don’t have.  The primary reason for keeping active in the eBay community with my Simplx account is to stay on top of the changes that eBay makes and provide new information, knowledge, tips, and tricks to Simplx customers.  I wish every Simplx customer has the same eBay success that I have had, which if you look at my increasing volume and profit margins this past week I calculated I am running a $7 million to $8 million year business with the efforts of only 2 people.  Our company, Simplicity Group, which owns the Simplx product has had similar growth over the years and has been recognized by the INC 500 for a couple years in a row, but it took 50 to 80 employees to do so.

Here are 6 reasons I have identified why people are willing to pay more for products on eBay than what they might be able to get it for at the same retail store you will use to fulfill their order.

1.  They can’t use their Paypal account at the retail store.  Many people consider balances in their Paypal account as funny money and prefer to buy on eBay to be able to spend it.

2.  They don’t know that product is for sale at that great price from the retail merchant you found.

3.  They get cash back from a program like Bing.com that ultimately makes it cheaper for them to buy from you off eBay than from a retail store.

4. They have an eBay coupon or PayPal coupon that they want to use to make the purchase that ultimately makes it cheaper for them to buy off eBay.

5.  Many people prefer the ease and convenience of the checkout process and payment process of eBay rather than having to set up an account to purchase from a different website and then find their credit card to make the purchase.

6.  EBay and PayPal go to great extent to provide protection and warm fuzzies for people purchasing from you off eBay that other sites may not be able to offer.

One or a combination of these reasons provide plenty of available customers for you that would be willing to pay you $210 for an iPod that you have a big box retailer fulfill for you at $199.  Make sure you mark the item as a gift item during the checout process so they don’t know what you paid and make sure you get your 4 or 5 percent cash back from Simplx and another 1 or 2 percent cash back from your credit card to help cover your eBay and PayPal fees.  It takes you only minutes to fulfill an order that you don’t have to store in inventory or purchase in advance, and if you can make a $10 profit for minutes of your time then you are on the right track.

This past month I have discovered a whole new world of international selling that I will dedicate a future blog to discussing in detail.  I have seen my average profit per item increase from $15 to $20 to closer to $50 or $60 per item.  Over the years I explored the international realm of selling just a few times and after getting burned once that was enough for me. PayPal has improved their security and seller protection since then and I think every Simplx customer should take advantage of international customers to some degree.

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I’ve been away from my computer for a good part of the day and was quite surprised to see my bank account increased by $22,000 during the day.  I felt like I just drew the Monopoly card “bank error in your favor” : ) but I soon discovered that my eBay business has just been on autopilot and I’m going to have a lot of work in the morning.

It reminded me however of one of the things that I love so much about drop shipping….my customers pay me in advance….let me feel rich for a day or two….and then I go buy their product with the money that they paid.

Twenty-two thousand dollars is a substantial increase in daily sales over my normal sales trend.  I have added a few new products to my inventory like Halloween costumes and a few more electronics, but I really haven’t sold that many items from my new listings yet.  I have noticed an upward trend in my sales volume for the past couple of weeks and I’ve seen comments from customers about wanting to buy products as Christmas gifts.  I even had one customer ask if I do layaway.  Layaway???  I told her no, but she was persistent and said that she does it for her eBay business and it shouldn’t be a big deal.  I asked her what she wanted me to do and she said I just needed to set aside a couple of my products and she would start making payments towards getting them paid off before Christmas.  I explained to her that I drop ship them and she said no problem.  Once she pays them off in full then I will schedule them to be drop shipped to her.  WHAT???  OK, what’s the catch?  Forgive my ignorance, but I guess I have never put a product on layaway before; if it always works the way this lady wanted to do it, and how I now offer it to my customers, I can see why stores would want to offer layaway.  So ma’am, what you are saying is you are going to send me $100 now, and you want me to hold on to your money until you have sent me payments of an additional $400, and then some time before Christmas you want me to have the products sent to you?…..OK.  I agreed, she sent funds, and then immediately posted positive feedback on my account.  I copied and pasted her feedback below.

I didn’t mean for this blog to get too long so let me get to the point of what I wanted to say….Christmas is coming and now is the time to get your products listed and ready for sale on eBay.  I’ve had something for sale during Christmas on eBay every year for the past 6 or 7 years and I always see my personal eBay sales double or triple during the Christmas holidays.

	FANTASTIC EBAY SELLER!!! WILL DEFINITELY DO BUSINESS WITH THEM AGAIN!!	Buyer: cal**** ( 52)	Sep-16-09 18:53
		US $488.62

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