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Is eBay the Promised Land?
johnny.shz asks: "Even the politicians were claiming: millions of people are making a living off eBay. eBay does have millions of people selling at any given time, but how many are actually making a living? I've sold many things on eBay, mostly junk. My feeling is that I'm making eBay richer (all fees plus PayPal account about 10%), but certainly not myself. Despite all the hoopla of the new promised land, I don't see the promise on eBay. How many of you are making a living off eBay? How many of you actually know someone who does?"
I know someone who makes about $600 per month in sales, which is enough for a college student to live on (if you have fin aid/loans/mom to pay for school).
How he does it.
Deal sites.
Rebate whore
Price match.
invest all your free time on ebay sales.
prompt shipping.
Grump
Is it true that more people vote for the winner of American Idol, than vote for the president? -Ali G.
A local businessman has set up an 'eBay Consignment' shop, you drop off an item, and he sells it on eBay for a fee. He takes pictures, does the description, lists the item...
21st century pawn shop
I know lots of people who make a living off Ebay, most own a home business and sell some of their products on Ebay. A couple at work had to quit their job to work full time on the ebay selling, so you can make money buying and reselling. A few buy wholesale from overseas
The problem I have with Ebay and Paypal, is the monopoly aspect. They start to morally judge what you can and cant sell, who you can/cant take money from with paypal. This is suppose to be a free market, but if you sell something some corporation doesnt want you to sell, they just have to write a letter to ebay to end your auction. Paypal doesnt have the same regulations as a bank, they dont want you transfering money across borders. (Try to donate money overseas with paypal, little problems, but it can be done.)
Too bad everyone is cornering themselves into 1 company for most products, your choice is disappearing. Finally you end up with a company that can do what it wants, and you have no options to go else where.
While the fees and prices go up...
Here's the problem: I have to pay the listing fee, right? Then I have to pay a percentage of the final sale, right? Then I have to pay a percentage of the money that was transfered to me by paypal, right? Then I have to dig through the nearest dumpster to find a box of suitable size and strength to house the item. Then I have to carry it to the post office. No matter how high I jack up the shipping fee, every damn time the absolute cheapest shipping fee is always a few dollars over what I charged the bidder. Always. By this time, I'm lucky to have recovered half of the money that I wasted when I acquired the item.
It gets worse though: there's no other place to sell your stuff. You're lucky to get 1/10th @ amazon what you get @ eBay.
[o]_O
Starting selling on eBay is just like starting any other small retail business. It requires a lot of hard work and effort, but it's certainly possible. The bonus of selling on eBay is that the world is your market - the downside is that you have a ton of competition. I do about $54,000 a year gross sales on eBay (net profit is, of course, much less than that). It's enough to keep me going while I take some time off between undergrad and grad school, but I wouldn't want to be doing this my whole life. There are, however, plenty of people out there who are making a lot of money on eBay. The keys are:
1. Find a reliable supplier where you can get items at wholesale
1a. Find about 20 items that sell well from that supplier and list them over and over again! Nothing sucks more than having to write new listings every week.
2. Spend a lot of time initititally working out your shipping system to minimize cost and time effort.
3. Profit!
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Last time I talked to my dad, it sounds like he makes more off ebay now than he does off his store front. He runs a small-town hobby shop. He was almost giving away some of his more rare merchandise that had been occupying his shelves for a few years. As soon as he got on ebay, some of his goods (particularly playmobil) were selling for $50 instead of 75 cents (NOT KIDDING).
I know business must be good, he's paying my sister to handle the ebay business... a job she took over taking a job as a teacher, something she just finished college for a couple of years back.
Ebay really takes the a lot of the cost out of trying new merchandise out, since if it doesn't fly off the shelves, the typical worst case scenerio is you get most of your money back online.
She just "has an eye for what will sell" - mostly little figurines and other dust collectors. She cruises garage sales and eBays whatever she finds. She considers it a full-time job and clears about $50k a year. ('Course she lives down on Florida where there's tons of estate sales with collectible stuff from all the retirees croaking... :)
I know of one guy who buys cheap stuff at closeout sales and cheap things online, then resells them on ebay for .5 to as much as 10 times what he got it for. He isn't extremely wealthy, but he does this and makes a pretty good amount of money off of it.
the Political Inquirer
Didn't stop to think about the realities of running a business, did you? If it were like you describe, wouldn't everybody be running a business online instead of "deal[ing] with the overhead of running a store"? Consider the realities of the situation:
Actually, I did.
1) If you're REALLY running your whole business out of your house, there's a limit on the size of your business. If you're in a shipped-goods industry (like these Ebay merchants), how much inventory can you actually fit in your house? Even if your wife is very understanding, the house is only so big, right?
My house is fairly good sized and I have two rooms that I don't use at all. That gives me, say, 250 sq. ft. just inside the house, not counting room for any sort of outbuilding. Depending on what I choose to sell, that could be more than enough inventory room.
2) But let's say you get a warehouse, which is cheaper than storefront commercial space, or you keep your volume of business low enough to keep it in your house. You're STILL not necessarily better off, because a storefront can be a route to a hell of a lot more incoming customers.
That depends on where you are. Like the storefronts I was describing. Say you live in Powell City, Wyoming. I don't, but almost did. Population 5,000. If my business is something that is something of rather specific interest, that storefront potential isn't going to cover the cost of the storefront.
3) A storefront shop will see a whole category of very lucrative customers that mail-order, WWW, and Ebay-based stores cannot: people who need something RIGHT NOW and can't wait.
Again, that very much depends on where you're located.
4) Would you rather make %50 profit from your gross revenues, or %5 profit?
I think you assume way too much when you imply the difference between having and not having a storefront is 1000x. I don't think you'll find an example of that anywhere in the small business realm that I was talking about.
Even assuming I can make more money from a storefront, that doesn't mean the storefront profits (in this case being sale price - cost of item) would cover the storefront itself.
5) There are perfectly good reasons for staying on Ebay without having a regular storefront.
Yep. All those. Along with the fact that location is everything. If you live in a town where your product doesn't appeal, then there's no point in having a storefront.
I'm not saying is possible with EVERY standard storefront store, but there's a lot of cases where it is easily posssible.
- AMW