After initially growing rapidly, it’s not uncommon for eBay businesses to hit a plateau after reaching a certain level of sales. At this point, getting to the next milestone just doesn’t seem to come as easily.
Oftentimes, this is because of issues within the company set-up. The structure that has worked so well in driving that initial growth is now hindering it.
Pushing past this stage will be challenging – but not impossible – as long as there’s the right infrastructure, technology, and data in place.
To understand the how and the why, we speak to MAG Consulting Group’s Jim Denos.
The Start of MAG Consulting Group
When COVID-19 hit and many small businesses started to go under, Jim knew he had to do something.
Having spent the past decade or so at eBay (particularly with eBay Motors) working side-by-side with business owners and forming close relationships with them, he knew them inside out.
He also knew he had the experience and ability to guide them through such difficult situations – something he felt committed to doing.
However, he wanted to do so on his own terms. So, he left eBay and started his own consulting business.
‘Leaving in COVID may seem like the worst time to do it. But for me, it was the best time to showcase that I'm committed to helping these businesses grow,’ says Jim.
Today, MAG Consulting Group consists of a handful of employees. In order to keep the team tight yet still deliver specialised services, they have formed strong partnerships with carefully chosen third-party providers.
Businesses on eBay Reach a Point and Get Stuck
With a decade’s worth of eBay experience under his belt, Jim understands the main challenges eBay sellers face better than anyone.
From his experience, they often grow to a certain point and then struggle to scale.
‘We see this all the time. The problem is businesses get to some inflexion point and then they become stuck,’ says Jim.
“ ...It’s common for a business selling auto parts to start to plateau when they hit the two- to three-million-dollar mark...”
For instance, it’s common for a business selling auto parts to start to plateau when they hit the two- to three-million-dollar mark in annual sales.
‘That’s the breaking point at which investing into the right infrastructure kind of makes its way out,’ says Jim.
For many sellers, automotive or otherwise, overcoming this isn’t easy as it entails a lot more risk and investment.
‘They need to acquire another warehouse. They need to invest in more technology. There’s a myriad of issues, including the infrastructure,’ explains Jim.
Unaware of the underlying issues and how to overcome them, these sellers then quit eBay, move to other marketplaces, or – worse yet – go out of business completely.
And this is exactly where Jim helps his customers.
‘We scale them for the next level of growth, but without the heavy burden of dramatically rising costs and other issues.’ says Jim.
Jim’s primary focus is on managing clients’ marketplace operations until they have grown to that next level and all of the necessary components are in place and running smoothly. They then transition the operations back to them.
By managing their customers’ operations, Jim’s team resolves their customers’ scaling issues, and costs are minimised by leveraging his warehouse space, developers, and highly-competitive shipping terms.
More specifically, Jim and his team achieve this by tackling three main areas: infrastructure, technology, and data.
1. Setting Up the Right Infrastructure
To break through the plateau, businesses need to have the right departments, teams, and manpower equipped with the skills needed to drive them forward.
‘Most businesses lack talent, depth, and connective tissue across various functions,’ explains Jim.
Specifically, businesses benefit from having skilled and trained personnel operating in these functions:
“Most businesses lack talent, depth, and connective tissue across various functions.”
Customer service
Logistics and financials
Technology
Data and strategy
Marketing
Organisational development.
When managing a customer’s marketplace operations, MAG Consulting Group takes care of staffing, training, and development so that the transition back to the customer is smooth.
2. Optimising With Technology
Jim views having the right technology as essential for breaking through plateaus. The right technology enables a business to run faster, more cost-effectively, and with fewer errors.
Jim believes a suite of tools is necessary, covering:
Listing management
Cataloguing
Automated inventory optimisation (marketplace and website)
Customer service management
Performance-monitoring dashboards
SEO
Marketing and customer acquisition strategies
Shipping.
As there are a lot of choices with varying features, it can be difficult to know what works best. Jim, through experience, has a shortlist of third-party providers that he works with to deliver both off-the-shelf and custom tools.
3. Leveraging Product Data
Another struggle eBay sellers face is making sense of complex data, which plays a critical role in growth.
Transforming Product Data Into Structured Data
Though they may have the data, many businesses lack the ability to transform it into structured data that is compatible with marketplaces. This is especially true in the auto parts industry.
“That complexity at scale, that level of data, is either your bread and butter and it makes you money or it’s your Achilles’ heel.”
‘That complexity at scale, that level of data, is either your bread and butter and it makes you money or it's your Achilles’ heel,’ says Jim.
Jim works with a business partner to untangle these intricacies by studying their clients’ data and normalising it.
Once they have this analysis in hand, Jim’s team prepares the data such that it can be leveraged for marketplaces.
Essentially, they aim to answer the following questions (and more):
How can you make sure the inventory shows up correctly on a marketplace listing?
How do you make sure it actually converts?
How do you make sure your titles are optimised?
How do you make sure you’re priced competitively?’
Using ShelfTrend’s eBay Analytics for Competitive Intelligence
This is where they turn to ShelfTrend.
Jim and his team have been using ShelfTrend for several months now, for their own operations and their clients’, after having heard about it through one of his business partners.
They tap into ShelfTrend’s eBay analytics for high-level guidance both when closing a deal and as they start working with a new account.
As for their clients, ShelfTrend helps the MAG Consulting Group team define and finetune inventory strategies, item specifics, and attributes, which they then use to draw up a business strategy. This includes identifying sourcing opportunities, product trends, and potential competitors.
Using an automotive part example, Jim explains.
“ShelfTrend has the ability for us to take that particular part number and provide back some inventory intelligence and competitive analysis. ”
‘Typically, an item-specific element called the “manufacturer part number” is used. This is generally linked to an original equipment manufacturer, like Ford, which assigns these parts a number.’
‘ShelfTrend has the ability for us to take that particular part number and provide back some inventory intelligence and competitive analysis. We can quickly see the inventory on eBay, sales performance, who’s selling it, the price, different keywords used in the title, and the main item specifics used. We can then adjust accordingly.’
With that, they can also determine whether it can be profitable to sell.
‘At a higher level, ShelfTrend helps us understand what the actual potential is. That means not only the competitive landscape but also the types of margins and business models available to be able to afford selling them at a certain price point,’ explains Jim.
Now Is The Time To Focus On Marketplace Growth
There’s no question the coronavirus pandemic has dramatically shifted business sales online. In fact, analysts say the pivot to ecommerce has been accelerated by as many as five years.
‘Quite frankly, the need to be on marketplaces… You should already be there. But it’s never been greater,’ says Jim.
The pandemic has also created a rather unique situation – traditional and startup brands are waking up to the need to go direct-to-consumer.
For businesses selling on marketplaces, this translates to having larger fish to compete with and even more competition. So to be successful, it’s more critical now than ever to have a well-thought-out data strategy, infrastructure, and technology in place.
‘It’s not a matter of testing and learning anymore and dipping your toe in the water,’ says Jim.
‘The fact that large brands are doing it means that if you’re going to invest in it, you’d better do it the right way, or you’re going to fail.’
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