Step 2: Find Stuff to Sell
This can be the biggest challenge in setting up an eBay business. Keep these points in mind:
- Pick the right product. Select something you'll enjoy selling and that stands a good chance of making a profit. Avoid merchandise you know absolutely nothing about, that's difficult to describe in a short paragraph, that won't photograph well or that's tricky to ship without damage.
- Consider cost and sale price. "Buyers and sellers on eBay set the price--you don't," says Melissa Sands, 35, who started selling on eBay in 1999 to help her husband, a comic-book dealer, get rid of excess inventory. Today, Sands runs Sands-o-Time , an eBay store selling pottery, porcelain, glass, silver, costume jewelry and more with sales averaging $8,000 to $12,000 per month. Before you buy anything, find out what other similar items have sold for on eBay and ask yourself if there's a good chance you will make money.
- Sell related merchandise. "If you make it easy for people to buy something, they will want to buy more from you--and you have to have related merchandise in stock," advises Cash. "So, for example, if you're selling collectibles, you should also carry the display racks, books and other accessories those particular collectors will want to have."
- Make sure you have enough storage space for your merchandise. Don't start ordering pallets of large items if your basement or garage is small, or if your front door isn't big enough to squeeze the crates through.
- Learn how to pack and ship goods. Calculating shipping costs properly is also important. To help you with this, eBay, FedEx, UPS and the U.S. Postal Service all offer shipping calculators on their websites. Buyers really hate it if they think you're gouging them on the shipping and handling fees.
- Don't dawdle. Jim "Griff" Griffith, author of The eBay Bible and dean of eBay Education, says many new sellers feel overwhelmed at first. "A lot of new sellers spend too much time studying the site, and that's a mistake, as you can easily get hung up on 'paralysis by analysis,'" he says. Griff advises you to start small and slow, research the market on eBay, and then put one item up to get started. "If you do it methodically and slowly, you can list your first item in an hour or so and be up and running."
For more ideas on where to find product sources, visit our Sourcing Products area.
Step 3: Manage the Auction Process
There are several types of eBay auctions. In a basic auction, you post your item with a starting price and wait for bidders to drive the price up until a closing time, which can be three, five, seven or 10 days later, when the auction ends. You are then obligated to sell to the highest bidder.
You can also set a reserve price, which is a hidden minimum price that is the lowest amount you're willing to accept. Buyers are not shown the reserve price, and if it is not met, you are not obligated to sell the item.
If you have two or more identical items for sale, you can post them in the same auction by using a Dutch (or Multiple Item) Auction.
If you don't like auctions, eBay also has a "Buy It Now" feature that gives bidders the option to buy your item immediately for a set price. Or you can choose a fixed-price listing, which simply puts the item up for sale at a set price, with no bidding allowed.
To sell on eBay, you'll pay a listing fee to post your merchandise and a final value fee (a small percentage of the sale price) when the item sells. These fees change from time to time, so be sure to check the eBay site to make sure you can pay all the fees and still make a profit.
A number of books offer advice on reducing the amount of time and effort necessary to create eBay auction pages, such as Marsha Collier's eBay Timesaving Techniques For Dummies , Janelle Elms' eBay Your Business and Joseph T. Sinclair's eBay Business the Smart Way . Entrepreneur magazine's Startup Guide #1824, How to Start a Business on eBay , is available at www.smallbizbooks.com .
Software can also help you streamline the auction management process. Listing programs, such as Turbo-Lister (available for free from eBay) and Zdrop , enable you to create multiple auction pages on your PC and upload them as a "batch" to eBay. Full-service auction-management programs like Auction-Helper and Zoovy handle almost everything, from inventory management to label printing.
Cliff Ennico is a syndicated columnist and author of several books on small business, including Small Business Survival Guide and The eBay Business Answer Book. This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state.