Online Auctions 101

by Ramona Creel

The Electronic Option

For some people, participating in an online auction seems intimidating — too “high tech” for their tastes. But auction sites like Yahoo! Auctions and Ebay have made it easy for you to sell your discards from the comfort of your own living room, even if you're not a complete web geek. If you can use the internet, you can sell your items online. Essentially, it's like placing a newspaper ad — only on the web. And instead of having to speak with dozens of people on the phone about your product (describing it and dickering over the price, again and again), it all takes place automatically on the web with very little interaction on your part.

The process is easy. You simply post a description of your product, set a time-limit for how long you would like people to bid on your item, and wait to see what happens. Of course, on occasion, you will receive a question or two from a potential bidder — but these are easily handled with a quick email. Finally, when your bid expires, you receive payment from the buyer and ship out your product. When done correctly, it's as easy as pie! Of course, you can always run into snags — but here are a few suggestions for creating a smooth transaction process.

Your Title And Description

When a potential bidder searches for a specific item or scans through a category (like “sports equipment” or “household goods”), he/she will see your product as nothing more than a title and a hyperlink to your description — you need to catch their eye quickly if you want them to read on. Since your title is generally limited to one line, make it count! If your product is new, say so in the title — and use the acronym NWT (new with tags) for an item has never been used. Include recognizable and respected brand names like “Nike” or “Donna Karan.” With clothing, indicate whether it is “mens,” “womens,” or “kids.” And don't forget the size and color. While this isn't the appropriate place for a lengthy sales pitch, you want to grab a customer's attention on that first pass.

You will also want to make sure you choose an appropriate category for your product. Try to place your items in a home where other similar items live — you will benefit from the fact that shoppers are already searching in that category for related products. If you are having a hard time deciding on a category, ask yourself, “Where would I look for this item if I were trying to buy one?”

Make sure that your description is as detailed as possible. In most instances, you won't have a space limit for describing your product — and the general rule of thumb is the more information, the better. People don't want to have to contact you to see what size something is or if the attachments come with it or if it has any scuff marks. You will save yourself a lot time and effort over the long run by being thorough up front — you will receive fewer “clarification” emails from potential bidders. Remember, the goal in an online auction is not just to make money — it's to make the process as automated as possible. The less you have to be involved after the auction starts, the better!

Another important factor in your success with online auctions is honesty. In today's climate, people are leery of incomplete descriptions because it feels as though the vendor may be trying to pull something over on them. Be honest upfront about the age of the item, its features, and any flaws or damage. Too many people throw the phrase “like new” around indiscriminately. You may be able to pawn a shabby product off on someone the first time — but they will hurt you down the road by ruining your credibility and reputation as a vendor with negative feedback.

Get Visual

When you sell an item at a consignment store or yard sale, potential customers have the benefit of personal interaction with the object — they can see it up close, touch it, handle it, try it out, and examine it thoroughly. However, the internet keeps buyers at a distance. The only method that bidders have to evaluate a piece of merchandise is through your description and any photos you include.

Be sure to take pictures from several different angles — and include “close-ups” of any important features or small parts. If you are selling an item with “minor damage” in an area (such as a scuff or a small stain) take a zoomed-in picture of the damage to show exactly how minor it is. And try to photograph your items on a neutral color background (you can even just sit each object out on a white bedsheet) so the focus is on your product.

One of the biggest mistakes sellers make is leaving the photo out because it seems like too much work. Think about it — if you are searching on Ebay for a food processor and find 25 of them but only 10 have pictures, which ones will you consider buying first? And many shoppers won't even bother looking at a product description unless it says “photo attached.” So taking the few extra minutes to shoot a digital picture or scan a standard photograph mean the difference between a sale and a waste of time.

Pricing And Payment

Web auctions usually offer a couple of different options for pricing your product. You may choose the traditional auction format — where you set a starting price, allow people to bid in discrete increments ($1, $5, $10, etc.), and ship to the highest bidder when the auction ends. However, if you have a product that is worth a considerable amount, you may want to set a reserve price — a minimum amount that you are willing to accept for your merchandise (if the reserve is not met, you aren't obligated to sell.) Or you can offer customers the option to simply buy your product for a set price at the start of bidding. The bidder could either go through the normal auction process and risk losing out to another buyer — or could choose the “buy now” option and simply pay you a pre-set price for your item. This makes life a lot easier for a bidder who knows what he or she wants and is willing to forgo a potential bargain to get it. And it allows you to get a fair price from a determined buyer.

Once you've decided on a price, the next worry is how will you get paid for your sale? This is the one issue that intimidates potential sellers more than any other — you can hear dozens of horror stories on the web about sellers who were cheated out of their payments by accepting rubber checks or fraudulent credit cards through services like PayPal. So what do you do? The safest way to sell online is via an escrow account — a third party company that will receive a cash payment from your buyer, hold it until your product has been safely delivered, and then pay you. However, you need to be on the lookout for the latest internet scam — phony escrow services. The best route to take is to use one of the escrow companies recommended by the online auction service. These companies have earned a solid reputation and should be completely above-board. But if you have any doubts, check them out with the BBB first.


Another area that you need to think through ahead of time is how you will ship your product. It's best if you select a shipping method that will allow you to send an item anywhere in the country for one price. If this isn't an option (and your auction service doesn't offer real-time shipping calculations), find out how much it would cost to ship it to the farthest point from you in your country (ex: if you live in New York, find the price of shipping to California). That way, you can list the shipping price in your description and know that you are covered, regardless of where the winning bidder lives. It is completely acceptable to indicate that shipping charges may be higher for bidders outside of your country.

Also be sure to indicate the shipping method in your description. And let the buyer know if insurance is included in the shipping price, or if they will be expected to pay extra for it. Quite often, vendors make insurance optional, but it's a nice service to your customers to include it in the shipping price. It will also save you untold headaches and disputes later if your package fails to arrive at its intended destination or is damaged.

One Final Note

Selling online is not a guaranteed proposition — just as holding a yard sale or listing your items in the newspaper is not guaranteed. Check up front with the auction service to see if you will be charged a fee simply for listing your item, regardless of the outcome of the auction. Also ask about any commissions charged by the site — find out if those fees are based on your earnings or are applicable even if your product doesn't sell. And be sure to find out what protections the auction service offers you in the case of a dishonest buyer. Know your rights and responsibilities before you ever sign on.

Finally, start off small — don't invest a lot of time and money in “collecting” items that you think will sell online. Use this as a way to get rid of your own unwanted items — and if it turns out successfully, you may have a home-based business on your hands!

© Ramona Creel, all rights reserved. Ramona Creel is a modern Renaissance woman and guru of simplicity -- traveling the country as a full-time RVer, sharing her story of radically downsizing, and inspiring others to regain control of their own lives. As a Professional Organizer and Accountability Coach, Ramona will help you create the time and space to focus on your true priorities -- clearing away the clutter other obstacles and standing in the way of that life you've always wanted to be living. As a Professional Photographer, Ramona captures powerful images of places and people as she travels. And as a travel writer, social commentator, and blogger, she shares her experiences and insights about the world as we know it. You can see all these sides of Ramona -- read her articles, browse through her photographs, and even hire her to help get your life in order -- at And be sure to follow her on Twitter and on Facebook.