How to Sell Stuff on eBay
By James Stephenson
Last year, I read an article about a 15-year-old high school student who was making over $5,000 per month part-time selling vintage T-shirts online. I was fascinated and wanted to know more. What I learned is that she was doing nothing more than purchasing vintage and secondhand T-shirts at garage sales, flea markets, and used clothing stores, paying as little as $1 each, and reselling them to collectors and everyday consumers through various online marketplaces for prices ranging from $10 to as much as $200 for rare and highly collectible T-shirts.
This got me thinking, “Wow, could it really be that simple? I wonder how many other people are also making big profits buying and selling?” As it turns out, a lot of people are. There is a janitor who purchases sunglasses in bulk for $2 each and resells them at weekend swap meets for $20; a retired police officer who earns $100,000 a year buying collector cars in North America and reselling them overseas; a single mother who supports her family buying used restaurant equipment at auction sales and reselling that equipment directly to restaurant owners in her area for as much as five times her cost.
In fact, my research led me to the conclusion that thousands of people worldwide have discovered they can earn as much, or more, than their current income by buying new and used products cheaply and reselling for a profit. Online auction and retail marketplace giant eBay has more than 100 million registered users around the globe. Over 450,000 registered users claim that selling products through eBay is their sole source of income. Not part-time, but their full-time sole source of income. Guess what? EBay is only the tip of the iceberg. People are also using flea markets, trade shows, classified ads, and additional online marketplaces to sell new and used goods and earn big profits in the process.
The Internet, or more precisely eBay, certainly has propelled buying and selling as a career choice into the mainstream and into pop culture. People from every walk of life, level of education, and age group are choosing to buy and sell rather than fight it out to get a traditional job and then fight even harder to keep it. Many people are discovering they can work less, earn more, and be a lot happier in the process. Helping to fan the buy-and-sell phenomenon flames are television shows such as “Antiques Roadshow,” “The Collectors,” “Trash to Treasure,” and “Flea Market Finds.”
The innovative entrepreneur can take advantage of a nearly unlimited number of selling opportunities in a nearly unlimited number of online marketplaces. You can sell products on eBay, through electronic classified ads, by developing your own electronic storefront, and by building and publishing an e-commerce Web site. And these are just a few of the ways to get started in online product sales. Selling online means you can reach consumers around the globe quickly, easily, and at very modest costs. The Internet enables you to specialize in selling your own niche product even when your local market cannot support it, because you can reach greater numbers of your target audience wherever they reside. In short, buy-and-sell entrepreneurs who decide to sell their products online can strike it rich!
Online auction and retail marketplace giant eBay has more than 100 million registered users around the globe, and the company has set up camp in more than 20 countries. Even more amazing, and a testament to the strength of the buy-and-resell boom, is that 450,000 of eBay’s registered users report that selling products through various eBay venues is their sole source of income. Not part-time, but their full-time sole source of income. EBay’s sales, number of registered users, and the number of people operating eBay buy-and-sell businesses continues to grow by double-digit percentages annually. So if you are worried that you might have missed out on the eBay boom, don’t. As they say in Hollywood “You ain’t seen nothing yet, baby.” While there is no telling how big eBay will get, at the same time it is not likely to reach critical mass any time soon, and in all probability, never.
Volumes can, and have, been written on the subject of profiting from an eBay business. And eBay itself supplies information to all buyers and sellers. All you have to do is sign up, and it’s all there for the taking. The following information, however, will give you a basic understanding of how eBay works, with a focus on eBay Auctions, eBay Stores, and eBay Motors. EBay is as wide as it is deep, so I strongly suggest you spend lots of time at its sites, take advantage of its sponsored workshops, and read books about eBay selling to further your knowledge before you get started. Listed below are a few of the more popular books on operating an eBay business. They can be purchased at bookstores, bought online through Amazon, www.amazon.com, and Barnes & Noble, www.bn.com, or checked out from your local library.
eBay Timesaving Techniques for Dummies, Marsha Collier (Evangelical Press, 2004)
How to Sell Anything on eBay and Make a Fortune, Dennis Prince (McGraw-Hill, 2003)
The Official eBay Bible, Jim Griffith ( Gotham, 2003)
Sell It on eBay: Teck TV’s Guide to Creating Successful eBay Auctions, Jim Heid and Toby Moline (Peach Pit Press, 2003)
Start Your Own Business on eBay, Jacquelyn Lynn (Entrepreneur Press, 2004)
Starting an eBay Business for Dummies, Marsha Collier (Evangelical Press, 2004)
EBay offers sellers numerous types of auctions to meet individual marketing needs, including traditional, reserve-price, Dutch, private, and restricted-access auctions. EBay also offers a Live Auction Service with real-time bidding, but to qualify, a seller must be a licensed auctioneer, or use the services of a licensed auctioneer to conduct the sale. Find out more about eBay Live Auctions at www.ebayliveauctions.com.
Traditional Auction: Still the most popular and common type of eBay auction is the traditional or classic auction. In this type of auction there is no reserve price set, and at the end of the 1-,3-,5-,7-, or 10-day auction, the highest bid wins. The advantage of a short auction is that it may enable you to generate more heat and bidding excitement than a longer auction in which bidders can take their time to bid, which might eventually lead to diminished interest as time passes. On the other side of the coin, a longer auction means your item will be exposed to more potential buyers and might fetch a higher price. Ultimately, you will have to play around with auction lengths a bit to find what works best for what you sell. EBay also offers sellers a Buy It Now option, which simply means you can set a price for your item and a buyer can purchase the item for the set price without having to wait for the auction to end. But once you receive a bid, the Buy It Now icon disappears and the sale reverts back to a traditional auction.
Traditional Auction Sellers’ Fees: Sellers pay a nonrefundable insertion fee to list an item on eBay with the fee based on the starting price value.
Starting Price Insertion Fee
$500 and up $4.80
Sellers also pay a final-value fee, a percentage based on the final sales value of the item.
Final Sales Value Final-Value Fee
$0–$25 5.25% of the final sales value
$25–$1,000 5.25% of the initial $25
2.75% of the balance
$1,000 and up 5.25% of the initial $25
2.75% of the initial $25–$1000
1.50% of the balance
Reserve-Price Auction: Sellers have the option to set a reserve price for the item on sale. A reserve price is the lowest possible price a seller is prepared to take for the item, but buyers do not know how much the reserve price is, only that there is a reserve. Once a bid exceeds the reserve price, the item sells to the highest bidder. If the reserve price is not met before the auction expires, the item does not sell and the seller can choose to relist or not. Often sellers like to set a reserve price that matches their cost price as a way to protect their investment and not sell for less than cost. Reserve prices can be set for all auctions discussed here, with the exception of Dutch auctions.
Reserve-Price Auction Sellers Fees: Sellers using a reserve-price bid option pay the same fees as for a traditional auction, with two exceptions: One, the insertion fee is based on the reserved price. And two, in addition to the insertion fee you also pay a reserve-price auction fee, which is refundable if your item sells for the reserve bid or higher. If it does not sell, the reserve-auction price fee becomes part of the insertion fee and is nonrefundable.
Reserve Price Reserve-Price Auction Fee
$200 and up 1% of the reserve price
to a maximum of $100.00
Dutch Auction: A Dutch auction is a good choice when you have multiple units of the same products for sale, such as 50 pairs of identical sunglasses, or 200 identical wristwatches. There is no upper limit to how many items you can list using a Dutch auction—10 or 10,000, it’s up to you. Bidders also have the option of selecting how many of the items they want to purchase, one, some, or all. Sellers start by listing the number of items for sale, along with the starting bid. Bidders enter the amount they are willing to pay along with the number of units they want to purchase. The winning price is determined by the lowest successful bid at the time the auction closes, and all winning bidders receive this price even if their bid was higher. The idea is that if you receive bids for more items than you have for sale, then the lowest bids drop off, raising the price. Bidders can rebid a higher amount to stay in the game if they choose. A Dutch auction is a great way to move large quantities of products, quickly and efficiently, especially products in high demand.
Dutch Auction Sellers’ Fees: The insertion fee is the same as for a traditional auction, but is based on the opening price you establish times the number of items you have to sell, to a maximum insertion fee of $4.80. Final sales value fees are once again the same as traditional auction final sales value fees per item, times the number of items sold. For instance, if you sold ten watches for $10 each, the final sales value fee is $10 multiplied by 5.25% = $.0525 multiplied by 10 items = $5.25 total sales value fee.
Private Auction: A private auction protects the identity of the buyer by not listing any e-mail address in the bidding history screen, and when and if the item is sold, only the seller knows the buyer’s identity. You can use the private-auction feature on any of the auctions listed here, with the exception of a Dutch auction. Sellers may choose to use the private-auction option when selling very valuable or controversial items, once again to protect potential buyers who may not wish to be identified.
Private Auction Sellers’ Fees: The fees are the same as traditional-auction insertion and final sales value fees, plus a reserve-rice auction fee if this option is selected.
Restricted-Access Auction: If you sell adult-themed products, your only selling option on eBay is through restricted-access auction services. Be aware, however, that eBay offers sellers limited promotional tools, and only visitors with credit cards and visitors who have agreed to the terms and conditions are granted entry into restricted-access auctions.
Restricted-Access Auction Sellers’ Fees: The fees are the same as traditional-auction insertion and final sales value fees, plus a reserve-price auction fee if this option is selected.
EBay also offers sellers who qualify an opportunity to open their own eBay storefront. At present they offer three packages ranging from the basic, to featured, to the granddaddy of them all: the anchor store. Depending on the program you choose, some of the features could include 24-hour customer service, 5 to 15 customizable Web pages to feature products for sale, traffic reporting and administration, in-site advertising, and keyword promotion programs. There are many benefits to having your own store, including the opportunity to build repeat business with customers, longer listings so you can spend more time selling and less time listing, your own Web address and linking programs, listing in the eBay store directory, and an internal in-store search engine enabling customers to conveniently browse through your products. According to eBay, sellers who have upgraded from selling through standard auction services to their own storefront have realized a 25 percent increase in sales, on average, after a three-month period, which is a very impressive figure. At this writing, eBay was offering a free one-month trial subscription for all new customers. To find out more and to get started, go to http://pages.ebay.com/storefronts/start.html.
EBay Storefront Fees: EBay offers three levels of participation—basic service at $9.95 per month, featured service at $49.95 per month, and anchor service at $499.95 per month. To learn the features and benefits of each go to http://pages.ebay.com/storefronts/featuredstores.html. You will also pay insertion fees ranging from $.02 to $.08 per item, depending on sale duration. Final sales value fees when sold are the same as traditional auction fees. More information about eBay Storefront sellers’ fees can be found at http://pages.ebay.com/storefronts/pricing.html.
EBay Tools and Resources
EBay Learning Center. The eBay Learning Center is your first stop to register to open an account and to learn everything you need to know about buying and selling on eBay. http://pages.ebay.com/education/index.html
EBay University. Across the country in classroom settings, or online from the comforts of home, eBay offers numerous classes and workshops taught by experts on every imaginable eBay topic and category. http://pages.ebay.com/university/index.html
EBay Live. EBay Live is an annual conference organized and hosted by eBay that is open to all registered users. The conference features a number of educational workshops, classes, and events for both buyers and sellers at all skill levels, beginners through advanced. The 2005 eBay Live conference will be held in San Jose, California, June 23–25. Find out more by visiting the following link. www.ebay.com/ebaylive/
Seller’s Guide. In the Seller’s Guide, you will find answers to the most common questions asked by sellers, such as how to list items for sale, eBay sellers’ fees, and how to revise listings. http://pages.ebay.com/help/sell/index.html
EBay Promotional Tools. Learn how to boost sales and revenues by using promotional tools such as a picture gallery, bold text, subtitles, and keyword optimization. http://pages.ebay.com/sellercentral/tools.html
Financing Center. If you sell expensive equipment, eBay offers financing solutions via third-party lenders. Providing buyers with financing options often means your items will sell faster and for more money. http://financing-center.ebay.com/ebaybusiness/
Opinions, Authentication, and Grading. Selling antiques and collectibles? EBay provides links to companies that will value and authenticate one-of-a-kind antiques and collectibles, helping you secure top dollar from buyers who can shop in confidence knowing they are bidding on the real McCoy. http://pages.ebay.com/help/community/auth-overview.html
Shipping Center. Using the Shipping Center, you can calculate shipping costs to worldwide destinations, purchase U.S. postage, track shipments, and print UPS shipping labels. http://pages.ebay.com/services/buyandsell/shipping.html
Selling Internationally. In addition to selling in your home country, there are also opportunities to sell internationally through eBay. Here you will discover how to trade internationally, receive payments, ship products, and communicate with buyers. http://pages.ebay.com/help/sell/ia/selling_internationally.html
Security Center. All the information you need to know about safe buying and selling, as well as protecting your eBay account, online payments, and financial transactions can be found in the eBay Security Center. http://pages.ebay.com/securitycenter/index.html
PayPal. Sign up for a PayPal account so you can send and accept electronic money payments from customers buying your products on eBay. https://www.paypal.com/ebay/buyer
EBay Insider. The eBay Insider is a free monthly newsletter loaded with tips, tools, tricks, and stories for and from eBay users. You can also access past newsletter issues in the archives using the link below. http://pages.ebay.com/community/life/ebay-life-pA1.html
For the most part, eBay and eBay Motors operate in a very similar fashion in terms of buyer and seller services and functions. The big difference is that eBay Motors categories revolve around vehicles, marine transportation, aviation transportation, and all related parts and accessories. If you sell cars, trucks, boats, planes, scooters, motorcycles, automotive parts and accessories, marine parts and accessories, recreational vehicles, trailers, and so on, then eBay Motors is a venue for you to list and sell through. Categories also extend to automotive collectibles and antiques such as gas station memorabilia. The popularity of eBay Motors continues to grow, mainly because they offer so many security tools aimed at protecting both buyers and sellers. Programs like eBay’s Assurance Program, Financing Center, Shipping Center, and Insurance Center really do make purchasing vehicles online as easy as from any offline dealer or private seller. With eBay you will need to open an account and spend some time researching all of the tools they offer sellers for listing-promotion purposes. In short, check out everything the site and service has to offer before you get started because there is lots of helpful information there.
EBay Motors Sellers’ Fees
Passenger and Other Vehicles. Cars, trucks, recreational vehicles, and large power and sailboats pay a fixed listing fee of $40, plus a $40 transaction fee, but only if the vehicle receives a bid. No bid, no transaction fee.
Motorcycles and Power Sports Equipment. Sellers of motorcycles and power sports equipment such as snowmobiles, all-terrain vehicles, scooters, and personal watercraft pay a $30 listing fee, plus a $40 transaction fee, but only if the vehicle receives a bid. No bid, no transaction fee.
Parts and Accessories. Sellers of all categories of parts and accessories, including automotive, aviation, and marine, pay fees that are the same as for normal items on eBay, including insertion fees, reserve-price fees (if applicable), multi-item insertion fees (if applicable), and final sales value fees.
EBay Assurance Program: offers short-term power-train warranties and vehicle inspection services, http://pages.ebay.com/ebaymotors/services/ assurance.html.
EBay Motors, www.ebaymotors.com.
EBay Motors “How To” Center: learn how to sell cars, boats, motorcycles, recreational vehicles, and automotive accessories, http://pages.ebay.com/ ebaymotors/howto/overview.html.
Financing Center: increase sales values by helping buyers secure financing, http://financing-center.ebay.com/.
Insurance Center: provides free online insurance quotes and links to insurance agents and brokers, http://pages.ebay.com/ebaymotors/services/ insurancecenter.html.
Vehicle Shipping: use the instant-quote feature to calculate vehicle shipping costs anywhere in the country, http://pages.ebay.com/ebaymotors/ services/das-shipping.html.
Excerpted from 202 Things You Can Buy and Sell for Big Profits by James Stephenson . Copyright © 2004 by James Stephenson . All rights reserved. Excerpted by arrangement with Entrepreneur Press. $19.95. Available in local bookstores or click here.