I hear so much about people who started selling on eBay and eventually turned it into their full time business. Is it really possible to build a profitable business just selling junk on eBay? -- Alex K.
If Fred Sanford were alive today, Alex, I’m sure he’d be earning his ripple money by selling
quality junk on eBay. While it’s also true that one man’s junk is another man’s treasure (I have a
garage full of treasure to prove this point), your chances of building a profitable business selling
“junk” on eBay (or anywhere else, for that matter) are slim to none.
While there is a lot of junk/treasure for sale on eBay, it is typically sold by individuals who
have “I break for yardsales!” bumper stickers on their cars and not serious business people.
For serious entrepreneurs, however, selling on eBay can be a good way to start a new
business if you are willing to put in the time and energy required to make the business a success.
eBay is also a good option for existing businesses to expand their reach by selling online.
Everyone from small used car dealers to giant companies like Dell Computers have
discovered that eBay is an excellent place to hawk their wares simply due to the huge number of
folks who visit the eBay site on a daily basis. Nowhere else on earth will you find such a large
pool of potential customers.
Consider these numbers:
There are nearly 69 million eBay users who spend $59 million every day.
Most eBay sellers are home-based businesses that sell everything from porcelain dolls to
locks of Elvis’ hair to $100,000 Mercedes convertibles to $5 million dollar vacation
homes.
Every minute of every day more than 150 new items are listed for sale, more than 500
bids are placed, and seven new people register to shop on eBay.
At any given moment, eBay is conducting some 12 million auctions, divided into about
18,000 different categories
About two million new items are offered for sale every day, and 62 million registered
users scour the site to find them.
One company is grossing more than $5 million dollars a year selling brand new pool
tables on eBay. Their eBay store is so profitable that they have closed their retail
location and now sell solely online.
That’s right, $5 million dollars from the sale of pool tables: proof that you can sell just about
anything on eBay if you know how to do it.
Be aware, however, that eBay is no magic bullet. As any eBay Power Seller (a seller who
sells a minimum of $10,000 in goods per month) will tell you, building a profitable eBay business
takes hard work and requires long hours, and often the financial rewards do not make it worth the
effort spent.
When it comes down to the mechanics of it all, running an eBay business is no different than
running a brick and mortar business. You still have the same considerations regarding product
selection, inventory purchasing, product pricing, inventory management, order processing,
fulfillment, customer service, etc.
You must also consider the legal and accounting aspects of the business. Just because
you’re selling online does not mean that Uncle Sam won’t expect his piece of the pie. Revenue
generated by an eBay business is just as reportable and taxable as revenue generated from a
brick and mortar store. And if you sell to customers within your state you may also be
responsible for collecting city, county or state sales tax.
One of the biggest obstacles to building a successful eBay business may be the stiffness of
the competition. Many sellers sell identical items and the price wars often get ugly, but that’s to
be expected in a free market place, which is exactly what eBay is.
You may be the only store in town that’s selling that one of a kind, custom made just for you,
broke the mold after they made it, Dale Earnhart Memorial Bobble Head Action Figure (Earnhart
fans would string me up if I called it a Doll), but do a quick search on eBay and you’ll probably
find a hundred others just like it.
So, can you build a profitable business selling on eBay? Certainly, thousands of people have
done it and so can you. Here are a few tips to help get you started.
Sell Quality Products
Don’t sell junk! Leave the knick-knacks and fake leather jackets to the less informed. You
should offer only quality products at a fair price.
Research The Competition
Once you have your product in mind, don’t invest a dime on inventory until you have spent
some time on eBay to see what the competition is doing. If you want to sell motorcycle helmets,
for example, you should look at current auctions to see how many others are selling similar
helmets and what prices they are charging. This step is vital since you may discover that you
can’t compete with current sellers on price or there is simply no market for what you have to offer.
Start Slowly
Many people believe that the more items they have for sale on eBay the better. They will
invest thousands in inventory and spent hundreds on listing fees (yes, eBay charges you to list
items for sale and collects a final fee if the item sells). Those are the folks that usually end up
with ten thousand Ginsu knives forever in their garage.
Test, Test, Test
A fair portion of eBay auctions result in no sales, so it’s best to test the waters before jumping
in with both feet.
List a few items and see how they sell. If an item doesn’t sell, list it at least twice more.
Some items might not sell the first time, but may the second or third, then sell steadily from then
on. If an item gets no bids the first time, consider adjusting your price or your terms. If an item
sells well, keep it in stock and then experiment with another item.
Do Your Homework
eBay is too broad a subject to be covered fully here, but there are a multitude of books
available that can help you start an eBay business.
In fact, I bet you’ll find most of them for sale at this very moment at eBay.
What’s my bid…
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