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Finding Your Niche on eBay

Not sure what to sell on eBay? Learn how to research your ideas and find product sources in this excerpt from How to Start a Business on eBay.
August 12, 2003
URL: http://www.entrepreneur.com/article/64010

A lot of eBay sellers start out selling odds and ends they have around the house-and for good reason. For items that are in good condition, you'll probably get more money for them on eBay than at a garage sale. You probably have plenty of stuff that you'll never miss and you really don't need to store or dust anymore. And it's a relatively risk-free way to test the waters of eBay selling.

If you can't bear to part with anything you already have, start with products you know and have experience with. Choose things that have demonstrable market demand (that is, you know people are buying them). Don't make the mistake of selling only things you like, or the trendiest, coolest things you can find. If your goal is to make a profit-and it should be!-then you need to be selling things people will buy.

If you are considering selling an item, do a search on eBay and see if that product or similar ones are being offered for sale. If the market is saturated, you may want to reconsider trying to sell that product. At the same time, if absolutely no one else is offering the product for sale, you need to figure out if that's because no one else has thought of it, or if it's because no one will buy the item.

Depending on the category, seeing a lot of similar items up for sale may work in your favor or against you. For example, you may see a lot of the same item pop up in response to a search because people are buying. Or, observes antiques seller Sue Rudolph, "It might also mean the market is flooded and nobody wants it." You have to do more than just count the listings, she says. Look at the individual auctions and see if people are bidding on the items-that will give you an indication of the strength of the market. Then check the completed auctions for the item you searched for. That will tell you what the item is selling for (if, in fact, it's selling at all).

Issues to Consider

Whether you have a specific product line in mind or are still trying to come up with some ideas for what you can sell on eBay, consider these issues:

Where Will You Find What You'll Sell?

One of the most exciting things about selling on eBay is that merchandise that will sell for a profit is virtually everywhere!

Buying From Wholesalers

As your business grows, you may choose to start buying from wholesale sources and selling on eBay at retail. This can be very profitable, but only if you choose the wholesaler wisely.

The Internet is full of opportunities to buy lists of wholesalers, often for just a few dollars. Save your money. You can get the same quality of information (or maybe even slightly better) for free by using any of the popular search engines and plugging in keywords such as "wholesale," "manufacturer" or "drop ship." But even that is not the best route to take.

Instead, be more specific in your approach. Think about the type of products you want to sell, and then look for manufacturers, wholesalers and distributors you can work with. Find companies whose products meet your quality expectations, that have prices and terms you can work with, and that deliver the service level you want to provide your customers. Get sample products so you can see the quality yourself. Some companies send free samples, while others charge a nominal fee-either way, don't try to sell something you've never seen. Be sure it is truly worth what you expect to sell it for.

Be sure you're dealing with a true manufacturer, wholesaler or distributor, and not another middleman who is marking up their prices and increasing your costs. Ask for and check references. You want to talk with others who are buying from these sources. In addition, check with the Better Business Bureau, any industry associations, the consumer protection agency of the state in which the supplier is located, and any other source that may be able to verify their claims.

Legitimate manufacturers, wholesalers and distributors will also want information about you, including proof that you are a legitimate business and that you have any necessary licenses and tax identification numbers. A supplier who doesn't ask for this information is probably a middleman whose ethics couldn't stand up to moderate, much less close, scrutiny.


Excerpted fromHow to Start a Business on eBay