Wed Mar 3 2010
The Fail-safe eBay Business Roadmap
- The problem with starting an eBay business is that there are so many ways to do it. Should you join this drop shipping scheme? What about importing from China, seems like things are pretty cheap there? For the last 5 years, Ive sold on a number of different auction sites, including the big one: eBay. Ive tried drop shipping, Ive done the importing things, Ive haggled over liquidation auctions and Ive used a lot of wholesalers. And let me tell you this: theyre all great in their way.
- But, Ive discovered that there is one particular route to eBay business success that works without fail. Everyone Ive seen follow this method has become very successful on eBay. Why? Because this roadmap gets you living and breathing eBay and what sells there. More importantly, you live and breathe it before you actually spend any serious money. In fact, the idea is to start making money first - and then spend what youve earned to scale up fast.
- If you want to start an eBay business, there are two big decisions you need to make upfront: what to sell and where to get it. Lets tackle what to sell first.
- Strange as it seems, hundreds of eBay business newbies actually go and invest their life savings in product to sell before they have even tried selling anything on eBay at all! If you were just about to wire off some money to a wholesaler right now, then please stop! Take a deep breath, step back, and go back to the beginning. First, take a look around the house - is that an old microwave over there? What about those clothes in the box in the basement you havent worn for years?
- Second-hand items sell like crazy on eBay, so selling stuff from around the house not only helps you begin amassing immensely valuable business start-up cash, but it also helps you start to build up a picture of what works on eBay. For example, when I got started, I thought that mp3 players would be a good thing to sell on eBay. Boy was I wrong.
- The hassle of shipping them out, getting buyers to purchase insurance, accepting faulty returns (and dealing with cranky customers who couldnt find the on-button) was just plain annoying - although that could be just me. So I switched to selling t-shirts. Light-weight, practically indestructible and everyone knows their size - fantastic! I ended up saving hundreds of dollars in handling and support time. Point is: its hard to predict these issues without any experience. A bit of informal selling would have saved me around $1,000 dollars in time and headaches.
- Okay, so Step 1 of our fail-safe roadmap: sell some stuff from around the house on eBay, and note any possible niches. Step 2 is to follow up on those niches by checking out completed listings on eBay for similar items. Its possible that the niche you thought you had in a bag is just a fluke. So its vital that you check Completed Listings to see how many similar items sold in the last two weeks, and how much they sold for. What you want to see is lots of green - ideally, about a 70% sell-through rate. You also want to see an average sale price of over $10, preferably over $30. This is because its harder to make money on low dollar items when at least $5-$10 is automatically chewed up on listing costs and other expenses.
- If all is still going well, then its time to move on to finding a source for the item you have chosen to sell. For absolute beginners, the easiest and least risky way to start getting stuff to sell is to..buy it off eBay! Okay, that might sound a bit weird, so let me explain. The idea is that youll just be buying small quantities of several things to continue to test the waters, and more crucially, to build up some capital. What many new sellers dont understand is that you need to be able to afford to invest at least $500,if not $5000, with a wholesaler if you are going to get a price low enough to compete on eBay.Wholesalers are all about quantity. Youll barely get much discount off the retail price if you can only afford to buy
- 20 units at a time. You need to be ordering hundreds to get yourself a margin. And lets face it, if you are starting an eBay business because of cash-flow problems, you probably cant afford to toss that much money around just yet.
- eBay has a separate wholesale category (http://reseller.ebay.com/ns/wholesalelots.html) where wholesalers and individuals can sell in bulk. In fact, many wholesalers that youll find elsewhere (such as in wholesale directories or via a Google search) sell wholesale product on eBay too, often for even better prices. So theres a good chance youll get a decent wholesale price - and you may even develop a few useful contacts in the process.
- The other big advantage of sourcing off eBay is that there is a vast selection of smaller lots on offer. So even if youve only got $50 to invest, you should be able to get started with something. I did pretty well with a few small wedding cake topper lots from eBay just a couple of years ago.
- Of course, before you spend a single penny, make sure you check how much the items are selling for individually on eBay. Obviously there needs to be a reasonable margin after you deduct your listing costs and handling expenses.
- Sometimes, eBay just wont have what you are looking for. Its worth
- checking back over a couple of weeks to find a wholesale lot that suits, but in the meantime, keep an eye on Craigslist and any local yard sales - both great places to pick up bulk bargains.
- Another fantastic option is to simply take a stroll down to your local store at sale time and offer to buy up all items in stock, for a negotiated price of course. The great thing about striking a deal with a person youve actually met is that it makes it harder for them to say no! Chances are, youll walk away with a bargain - and the prospect of a profitable future relationship.
- Of course, these are only short-term sourcing options. The idea is to spend at least two or three months sourcing and selling in this way until you have established a good feel for your market and eBay, and made at least a couple of thousand dollars to invest into buying from a wholesaler and taking your business to the next level. As they say, you need money to make money - and now youre an eBay expert to boot! Thats what I call a smart eBay business strategy.
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Posted by dream
