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Selling Computers and Accessories on eBay

January 9, 2007
URL: http://www.entrepreneur.com/article/172784

Note: This article was excerpted from How to Sell Computers and Accessories on eBay, which is available from EntrepreneurPress.com.

Computers and computer accessories are some of the best-selling and most reliably profitable items on eBay. Thousands of people visit eBay every day to browse and shop for new PCs, printers, networking components, cables, monitors and many other computer-related items. Many savvy eBay sellers have already recognized and capitalized on eBay's large and hungry market for everything computer related. With some research, foresight and careful planning, you can join their ranks.

Though selling on eBay is a great way to earn money, it is not a get-rich-quick miracle. Care must be taken when conducting all your transactions and dealing with bidders. eBay's feedback system is a double-edged sword. It will, at once, boast to the world how great a seller you are, while revealing to the world exactly where you are lagging behind. It takes a lot of work to make and keep buyers happy. If you've ever had a job that deals directly with the public, then you know this already. If you do not have the time or interest to devote to taking care of the details of doing business, such as getting packages to the shipping store on time in the middle of a snowstorm, or answering buyer e-mails after a long day of crunching numbers in your cubicle, then selling on eBay is not for you. Your feedback score will suffer, and soon buyers will shy away from your listings. However, if you're ready and excited for the possibilities eBay presents, then you will have a rewarding and profitable experience.

PowerSelling vs. Selling as a Hobby
The first step in selling on eBay is to decide your commitment level to this endeavor. There are two levels of commitment when discussing selling on eBay: hobby seller and PowerSeller. The hobby seller sells casually for extra cash when she finds time in her schedule. The PowerSeller has made selling online her career. The tips found in How to Sell Computers and Accessories on eBay will help both the hobby seller and PowerSeller become more successful, but the initial planning for these two commitment levels is decidedly different. The differences are discussed throughout the book, but for now just think carefully about whether you want to depend on selling computers on eBay as your only income, or if you'd like for it to supplement what you're already earning elsewhere.

Both hobby selling and PowerSelling can be fun, exciting and lucrative. If you're not sure where to begin, plan to start small and grow over time. It's much easier to start selling as a hobby to supplement your job than it is to start selling full time and then grovel for your job back if you decide this career isn't for you.

Assessing the Competition
Of all the possible items to sell, selling computers is a smart choice. Technology is growing and evolving at such a rapid rate that there is near constant demand for more products. However, because these items are immensely popular with bidders, they are also immensely popular with eBay sellers, which means you'll find plenty of competition in this category. Be aware that if you plan to reach the coveted PowerSeller status, you have your work cut out for you. Many PowerSellers are busy not only keeping a careful eye on their own businesses, but they also have learned to keep a strict eye on their competition-you.

The bright side of having a lot of competition is that it provides a lot of opportunities for market research. This is where you begin your journey to becoming a successful eBay computer seller. Know your competition, both on eBay and off, including brick-and-mortar retailers like Best Buy, Wal-Mart and Apple, online stores and local computer shops. What are their strengths? More importantly, what are their weaknesses? If your competition sells on eBay, find and study their product listings. Are they attractive, complete, and clear? Read their customer feedback comments. Are buyers complaining about slow shipping, inaccurate descriptions, or poor customer service? Find these faults, and make it your goal to provide better service in these areas.

You'll find when researching your competition that buyers have countless options for where to buy their computers and computer accessories. It is often impossible to compete with all these sellers on price alone. There are sure to be larger sellers out there who can buy in such large bulk quantities that their per-item price drops significantly. One day, you will be able to do the same, but when you're starting out, you should focus on competing on customer service, attractive and com¬plete eBay listings, and reliable shipping. You will soon build a feedback score that will attract the buyers you need to begin buying and selling items on par with the PowerSellers. Before you know it, you'll be a PowerSeller yourself.

The Tech-Trickle-Down
The computer market is still in its infancy. New, or first-generation, technology is being introduced nearly every day. Companies like Apple, Intel, and Sony are redefining the "cutting-edge" with seemingly every press conference they hold. This rapid development rate of new technologies and the premium price on those new technologies create a trickle-down effect. Large companies and power users buy the first-generation technology as soon as it becomes available to the public. This technology could be anything from new CPUs to faster hard drives to biometric scanners. Upon introduction, these new items fetch too high a price for the average user to buy and therefore comprise a limited segment of the market. But, inevitably, new technology is introduced that improves upon, and replaces, the previously latest and greatest technology, making it the new second generation. This second-generation equipment is now cheaper and more accessible to the average user. So the number of units sold actually increases to fill the large demand created by buyers who waited for the price to come down. Then, when new technologies are again introduced, this now third generation equipment is moved down the chain to users who don't mind, or are oblivious to, old hardware. Think of third-generation hardware as the old ThinkPad sitting on your mother's desk, or grandpop's Apple IIe.

You have an opportunity to sell at every step in the tech¬nology trickle-down process. Pre-order new technology before launch to capitalize on the high, post-launch demand. Watch the hot technology companies to find out when they are set to launch a new product and buy up the inventories of retailers selling off soon-to-be second-generation equipment to make room for the new first generation. Finally, sell off third-generation items at high-volume and rock-bottom prices to turn a profit. Seek new markets for old hardware, such as collectors, hobbyists, and young businesses.

Meet a PowerSeller
John Kreutzer is a Mac-fanatic. His history of using, fixing and teaching Apple computers dates back to their very first models in the late 1970s. In 2001, John decided to capitalize on his expertise by starting a business buying and selling his favorite computers. But you won't find only computers in his eBay store, Jack's Mack Shop. You'll also find the Macintosh operating system, Apple's various applications, and all sorts of Apple computer peripherals.

The items he sells range from brand new to over 25 years old. John enjoys finding his Macs new homes with collectors, bargain hunters and other Mac-fanatics. One of the parts of the business that he enjoys most, John says, is working with his customers to help them find the right products and solve any problems that emerge. Owning the business allows John to work with the products and systems that he finds exciting.

John's customers respond well to his enthusiasm for his products. They have awarded him a 99.6 percent positive feedback rating on more than 3,800 transactions. He is credited with being a fast shipper, very helpful during transactions, and having a profound grasp of all Apple and Apple-related products. John is a good example of creating a successful business out of doing what you love.

Learn more about selling computers on eBay from the book How to Sell Computers and Accessories on eBay from EntrepreneurPress.com.