So what was the thing that got me started in Internet Marketing? What was the one pivotal moment that convinced me to drop all other money making methods that I was aware of, and concentrate on the internet?

It was Star Wars Episode I. Not the movie itself, actually. It was Lucasarts’ deal with Pepsi that solidified the internet as the way to build my business.

Being a pretty big Star Wars fan all my life, I grabbed a complete set at the local Japanese corner store for my collection. Just for kicks, I wandered over to this new website called eBay to see if they would be worth anything. To my astonishment, a complete set of 6 Japanese Star Wars Episode I Pepsi cans (one of each character) was selling for over US$100. My jaw dropped to the floor as I yelled to Alicia to come and look.

Here was something that we could get for, at most, $6, and sell for $100. So, we took a really bad digital photo of the set that I had picked up earlier that day, made a 7 day auction with no reserve and a $6.00 starting bid, and we watched it climb to $75 within 24 hours. We ended up selling that first set of cans for about $125.
Over the next few months, we could be found buying hundreds of cases of Japanese Pepsi, opening packs and mixing-and-matching cans to build complete sets. We were the “crazy Americans who buy up all the Pepsi”, and we got more than our fair share of strange looks. (One afternoon, we spent an hour on the floor of a Japanese convenience store building complete sets… much to the anger of the store manager. Unfortunately, we couldn’t speak Japanese, so we didn’t understand his ranting - so we just smiled and resumed our set-building). But we didn’t care - we were having fun, and that doom that I was feeling as Alicia’s due date got closer seemed less…um… “doomful”.

We got things down to a nice routine. We held regular 3-day auctions, and ended up selling around 200 sets of cans for anywhere between $50 and $150 per set.

All told, we netted about $12,000. Now, in retrospect, the time we invested into this venture was probably worth way more than $12,000, but it was the education that resulted from this endeavor that was the real value. What we learned from this I’ve been able to apply again and again to greatly enhance the net profits of every venture I’ve been involved in. Here are some of the things I learned from our first foray into internet marketing.

eBay

Even today, seven years later, eBay is the quickest and easiest way to start making money on the internet. The method by which I started was completely backwards, however. I took a product, and then went to see if people wanted it. Luckily enough, they did - Star Wars collectors all across the US wanted to get their hands on these full color cans. The right was to do it, however, is just the opposite. Go to eBay and find what people want FIRST, and then figure out how to give it to them.

You see, eBay is the internet’s single most valuable source for doing market research. Nowhere else can you find such a wide range of goods and services, see how popular those offerings are with their customers, and get the exact price that people are willing to pay for that product/service/information.

Even if you’re not going to be selling things on eBay, all of the information you need about a market is right there at your fingertips. Even today I use eBay extensively to research any market that I am considering entering. I can get almost all the information I need to make a good business decision as to whether the market will be profitable or not.

The Scarcity Principle

People subconsiously assign more value to things that are less available. When I changed our eBay auction to read “I don’t know how many of these sets I’ll be able to sell, because they are getting harder and harder to find, even here in Japan”, the auction bids went through the roof. Eventually, lots of other service members stationed in Japan caught on and there were usually many sets for sale at any given time. But that one little sentence had people seriously competing for each and every set that we sold, and as a result we were able to sell two sets at a time, using 3-day auctions instead of 7-day auctions.

Customer Followup

On average we’d have about 10-12 bidders on each of our auctions. We kept a record of all the bidders who had lost our auctions, and followed up with them a couple days later. Our email read:

“Thanks for bidding on our Japanese Star Wars Pepsi Can auction. I was been able to find another few sets today, and I’m willing to honor your bid if you still want a set.”

This email converted at almost 75%. Why?

They had already told me that they wanted a set, by bidding on the auction in the first place, and they had already told me how much they were willing to pay for it.

These losing bidders felt honored that I would do some extra legwork for them. They already knew I was having a hard time finding them, and the fact that I was willing to track down some extra sets of cans just for them, made them feel special.
The fact that I was willing to honor their top bid, even though it was a losing bid, was just icing on the cake for them.

So, remember to listen to your customers; learn from them. Let them tell you what they want, and then give it to them. If you’re able to implement the scarcity principle in an honest way (don’t lie and say you’re only selling 100 of something if you’re actually selling as many as you can - dishonesty is never profitable in the long term), then do so.