Published in City Life Magazine, Chiang Mai – August 2004

Rainy Season Retailing

CHIANG MAI, Thailand – 16 June 2004 - Rainy season’s arrived.  You get a hint at this from the amount of wet stuff in the air outside and a personal malaise about going anywhere.

In some ways it’s a bit like the onset of deep winter back in Europe – when the sun shines you dash around trying to clear all the outside jobs before the clouds roll in again, and once they’ve arrived, you try to find things to do in the house. So, apart from vegetating in front of the TV, or rewashing your favourite T-shirt, how do you fill your time? Do you ever consider that housebound time, and your expensive Internet connection could actually be earning you money?

If you’re like most people I know, your email inbox gets bombarded with SPAM every time you log on and your mouse happily clicks them all into the trash folder. One of the more popular SPAM topics of late (tucked between the marketing for viagra, dating sites, and requests for help from Nigerian widows of ex-Presidents) are offers of information to help you achieve untold wealth on eBay.

eBay for those who still haven’t heard of it, is an online auction system that operates a bit like a car boot sale or garage sale, in addition to being the launch pad for many recently successful online resellers. For expatriates, eBay, and its many imitators like eBid, can genuinely generate extra income in addition to clearing out the mountains of unused or unwanted goods that we tend to collect. The latter point being of importance if you’re thinking of moving house or repatriating. Online Auctions work as a hybrid of classified advertising and genuine auctions.

You pay a small fee to “list” an item for sale in an appropriate category such as women’s’ large size clothing, or handmade handicrafts etc. The range of categories varies from site to site (see below) and depending on what you’re selling it can be worth the effort to compare product popularity between them. Having placed the item for sale or auction, the listing is visible for a number of days chosen by you, during which time the sites members browse for things they want to buy and place bids just as in a real auction. At the end of the period, the highest bid (above any reserve price you set) is the winner, and you both enter into a contract (to supply / buy) set by the terms of the auction site, which then charges you a final value fee. The bigger sites operate accrued fees payment accounts with monthly bills, whilst some sites demand pre-payment of fees.

Both methods require the online use of a credit or debit card, or in a few cases, the establishment of a bank direct debit as an option choice. All methods use secure, encrypted, connections for you to input your data, similar to the online services now offered by most banks, and are therefore safer than the manual sales vouchers that used to have the carbon sheets stolen by credit card fraudsters. Online transactions also utilise passworded logins to further protect your financial data.

As both a buyer and seller, you need some method of paying or being paid. The most common choice is to open a PayPal account, due to its wide acceptance (they claim 100 million users worldwide), but again there are alternatives – the UK’s most popular included NatWest Bank’s FastPay (now closed), and independents; NoChex and ppPay (see below). In the US and worldwide are the increasingly popular iKoBo which issues a Visa Electron debit card for withdrawing monies received, and MoneyBookers.

Different services charge different fees for the various transactions types typically carried out, and despite PayPal’s popularity, it is also the most commonly criticised as being expensive and restrictive. PayPal has just (June 2004) added Thailand to its list of countries where customers are authorised to open an account, but with stringent limitations on what can be done via Thai registered accounts.

Having joined an auction site, obtained online payment facilities, and got used to the basics of the systems, what type of goods can you sell? The simple answer is pretty much anything, although most sites restrict or prohibit items such as weapons, tobacco, alcohol, and pornography. I’ve seen listings as diverse as EFL teaching materials, baby clothes, jewellery, and homemade fudge. They all have buyers waiting somewhere.

As expats we have access to countless ranges of goods that sell quickly, and at good profits, to people back in our home countries. Note the word “ranges”, it is a good idea to select a few related ranges of items and specialise in them. Most sites have community forums or chat rooms and as word gets around that you specialise in certain types of items, other users will recommend you to the users they know, and you’ll find people begin searching for your products via your name, rather than the item’s description.

As your auction reputation builds, you’ll find your sales volume also increases. Your online reputation is built via feedback given to you by the people you trade with. Normally the seller leaves a feedback rating first (at the time of receiving payment) stating that the buyer did or did not complete the transaction. Later, when the goods are delivered, the buyer leaves feedback and comments on product quality, delivery time etc. Each positive comment adds one point to your rating; each negative comment deducts one from it.

I cannot emphasise enough how important it is to maintain 100% positive feedback and to build your rating to as high a number as possible – the higher it goes, the higher your sales success percentage goes. Don’t expect to sell everything you list, especially in your early days of online auctioning. As time goes by, you’ll also come to appreciate the importance of participating in the forums. Here you’ll receive help on running your auction sales (and buys), gain exposure of you and your products to other users (extra marketing), and probably make many new friends around the planet; friends who will begin asking you to source items for them, thus increasing your sales and income.

Online auctions can be profitable and create a worthwhile income, if you approach them in a businesslike and systematic manner. If you just want to clear a few items from under the stairs, they’ll also provide a quick route to doing this. The forums can be great fun, and the whole activity can fill many rainy days with some excitement as you watch the bids roll in on that brass reproduction Hindu statuette you bought at the night bazaar years ago. If you already have a manufacturing or wholesale business, they can open up a complete new market for you – list bulk or wholesale lots and the overseas resellers will beat virtual paths to your internet doors, increasing your exports and business performance.

Auction Sites

www.eBay.co.uk – when you first log into this site, scroll to the bottom of the page and choose the country you want to use as your “home” country. eBay are the biggest on the net, the busiest, and the most expensive to use, but they do generate the sales for you. Covers most product categories.

www.eBid.co.uk – the UK’s largest competitor to eBay, and you can buy and sell here completely FREE of charge. They have the friendliest and most fun community forums and possibly the fastest support team of all sites. They are due to expand into many additional countries during 2004, and are the most popular alternative for UK “defectors” upset by constantly rising fees and terms of service modifications at eBay. Popular for handicraft, esoteric & mystical products.

www.TradeMe.co.nz – The Kiwi site that eclipses even eBay in New Zealand, for members and listings, but requires prepayment of fees. Again it’s possible to sell here free, but watch out for the specific advantages given to NZ based sellers – they could cost you sales. TradeMe has a reputation for buyers failing to fully read auction descriptions and then not sending payments when they discover the item is in another country – causing you wasted fees and lost income.  (UPDATE – TradeMe has now blocked all non-residents of New Zealand from joining the site)

There are hundreds of other auction sites including subsidiary sections of Amazon Auctions, Yahoo, and other big names, but the three above remain the most productive for sellers.  Europe-wide QXL was once a major player, but has been in serious decline over the last few years.

Payment System Sites

www.PayPal.com – see comments in main article. As with eBay, make sure you register through the local site of your “home” country, otherwise you may have additional currency exchange charges, and problems with registering bank accounts etc. Additionally, read the terms very carefully – especially for Thailand-based accounts. PayPal operates officially in a restricted list of around 50 countries, and is difficult for Thai nationals to register with.

www.iKobo.com – Operates worldwide and appears to be growing rapidly. Many UK & US nationals, operating auctions from Thailand, report favourably on this service. It has no national prejudices but seems to not like Visa Delta and Electron as the card used to verify an account.

www.NoChex.com – UK’s largest competitor to PayPal and has several unique features that make it worthwhile, but note it restricts transactions to British banks plastic unless you upgrade the account (free, but with increased per transaction costs) – the upgraded accounts can accept Mastercard & Visa from non-members.

www.ppPay.com – probably the easiest system to use but again restricted to British bank plastic, however it does offer escrow – useful for large value transactions. Beware of the payer verification process, much criticised since its Jan 2005 introduction for causing cancelled transactions, due to difficulties for the buyer to register. It remains the cheapest service to use if buyers are pre-verified.

www.MoneyBookers.com – true worldwide coverage and regulated by UK Financial Services Act. Popular with many ASEAN based importers and exporters, and in Central & Eastern Europe (especially Germany), but less well known in USA.  Can be time consuming to register and verify an account, but not greatly more so than any of the other services.

There are several dozen other worthwhile payment systems. The small list above shows those that I have found most useful to active buyers and sellers expatriate in Thailand. Other people may have their own favourites, and using each site’s community forums will reveal mountains of useful information.

(ARTICLE UPDATE – If online auction sites and payment systems interest you, then for unbiased (and uncensored) analysis, commentary, and information – try www.BuildaSkill.com)