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?"

Comments

Yes, but usually not the individual.

[Rolan]

There are certainly people making a living off of eBay. They aren't your general user (like you). I'm curious where you read the politicians claiming "millions."

The people making a living off eBay are the small business owners that may (or may not) have a storefront in some town with limited exposure. They setup an eBay store, or list a most of their items on eBay for sale and make additional sales from stock they already had. They adjust their prices to compensate for the fees of doing business (which may very well be cheaper). They're generally able to avoid dealing with taxes (unless you're in their state), they don't have to deal with the overhead of store rent, electricity, etc that a physical store incurs.

If I were so inclined, I'm sure I could setup a business in my house that sells purely online/through eBay and be able to make a better profit than a standard storefront, simply due to the considerable difference in overhead. However, I'm not interested in owning that kind of business.

Re:Yes, but usually not the individual.

[Rolan]

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.

Re:Yes, but usually not the individual.

[Grishnakh]

Beyond all this, I think the web and ebay are really a much better way of running a small business than a traditional storefront.

Personally, I think a storefront is a terrible idea for a business, unless you're selling something that people really want to get locally for some reason (like groceries). First, the rent is horribly expensive, if you're located someplace where there's customers (obviously not Wyoming). Second, you have to pay for employees, unless you really want to man the store 12 or more hours per day, with no vacations ever. Employees are a huge expense and hassle. Just the paperwork for one employee will waste a lot of your time.

As a consumer, I'd much rather buy something online if I can.

1) I don't have to worry about operating hours. I can buy things online at any hour, like in the evening after work, or even from my computer at work. Most small shops have terrible operating hours; they seem to think none of their customers have regular jobs. If you're a shopkeeper in this modern economy, and you want to be successful, you need to have very long operating hours, perhaps from 8AM to 8PM, so everyone can get there at their convenience. This means hiring employees, and it all adds up to a huge overhead expense.

2) I don't have to go anywhere to buy stuff online. I can do it from home, or even from my computer at work. I don't have to make a special trip to drive someplace, waste fuel, take time off from work, try to get there before they close, etc.

3) The prices are best online, and I can shop around quickly. I can pull up 6 windows simultaneously for 6 different online shops, and compare prices in minutes. I can't do that easily by driving around. And invariably, the prices online are much lower than any small shop, where they charge huge markups to cover their exorbitant overhead expenses that I've already discussed. Why should I pay more so I can talk to some pimply-faced teenage cashier?

4) I don't have to pay sales tax. While this advantage may disappear in the future (I hope not), it's very significant if your purchase is over $100 or so, and usually more than makes up for the shipping cost. I do hate ebay sellers that charge astronomical shipping prices for tiny items though.

5) There's a much better selection online. At a small storefront, you're limited to the products that retailer decided he had space for, and would be profitable enough. Usually, stores only deal in certain brands. Internet stores aren't usually so limited, and if you're preferred brand isn't at one site, it only takes a few seconds to find a site that has it.

Now, with all the benefits that shopping on the internet gets me, I very rarely buy stuff at storefronts, except for 1) groceries, 2) home improvement/hardware stuff, 3) items from certain specialty shops that really are worth visiting in person (like used book stores) and 4) hot deals from big-box stores that I've learned about on the internet. If it's at all specialized, it's probably worth buying online. If I as a consumer am basically avoiding most small storefronts, why would I as a potential business owner want to operate a storefront? Unless my primary market is people too backwards to be shopping on the internet, I wouldn't. Over time, more and more consumers are going to be me; mom-n-pop stores are not doing well now, and are not going to make a comeback, so trying to start up a business with a storefront is a pretty stupid idea if you ask me.

Depends how you do it.

[ForestGrump]

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

Re:Depends how you do it.

[Profane MuthaFucka]

By deal sites, you mean he buys stock from deal websites?

And is "rebate whore" the reason why it's common to find hard drives for sale on EBay in the original box, but missing the UPC code?

Re:Depends how you do it.

[ForestGrump]

by "Deal sites", i mean he lives on fatwallet.com

and yea, rebate whore as in do the rebate, sell the box, sans upc.

I do the upc rebate game, but i make a little cash on the side by doing cable/dsl home installs for people I know (like my manager at work, family friends, etc). I tend to ask for a price of 75-100 dollars, including hardware. works out for me, and they're happy because going to worst buy and buying the router would have cost them 30-50 and nobody to setup for them.

Grump

"eBay consignment shop"

[vasqzr]

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

Re:"eBay consignment shop"

[polaughlin]

Or you could use AuctionDrop and drop an item off at most UPS Stores®.

Good 'ole tiny NZ

[rgbe]

And on the other side of the equatorial line, NZ has 1000 new businesses created from online auctions.

If Ebay is the Promised Land

[toygeek]

Then Google is the Messiah.

Monopoly

[BrookHarty]

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...

Easy

[one9nine]

"How many of you are making a living off eBay?"

Once I learned how to burn grilled cheese sandwiches a certian way, it was a snap.

Craigslist

[winthrop]

The real promised land is Craigslist.

If you live in a city with lots of rich people, they just throw good stuff away. I've got a washer/dryer, clothes, guitar, rugs, furniture, most free, some low-cost. A penny saved is a penny earned.

15 years from creation time, war has turned to ' '

[Lord Omlette]

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.

In olden times, using internet chronology

[alexjohns]

There were people who used to do this. Back in '98 or so, there were quite a few people who would haunt flea markets and yard/garage sales, buy anything and everything they thought they could resell and hawk it on ebay. I know I read more than one story about these 'entrepeneurs'.

Eventually, the masses figured out they could do the same thing and supplement their income. All of a sudden, things were a lot scarcer at the junk sales. There were all kinds of articles about the lot of the poor ebay entrepeneur.

I'm sure there are still a few people making a living off of ebay, but I seriously doubt it's 'millions'.

Possible - yes ; Easy - no

[Port1080]

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!

Not a living, but making Earth more livable

[computersareevil]

I'm certainly not making any real money on eBay, but I can't tell you how much better it feels to ship some piece of junk to somebody who want it, rather than dumping it in the trash can.

eBay may not be the "promised land", but it certainly is improving the land by being the best recycling tool ever invented.

Lots of people losing though. ..

[stevey]

I've got a lot of friends who seem to be losing money on Ebay, regularly.

I honestly don't understand it, the first place they visit is Ebay no matter what kind of purchase they're interested in.

To start with it might seem like a good deal, but I've seen lots of them pay way over retail prices in the "heat" of the auction because they don't know how to stop.

I've used ebay a few times, (only a few - my positive feedback has me listed at 4), but I've always known what my limit was.

I don't understand how somebody can be pleased they won an auction for a book at $10 when it's available from a store, or amazon, at retail for $5.99!

There must be a ton of people losing money like this ..

I second the store front statement

[sevinkey]

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.

Re:Be very careful on eBay due to shill bidding

[winkydink]

If you're doing a high volume of transactions, the costs associated with "selling" to all those winning shill bidders will take a significant bite out of your margins.

I've been selling casually on eBay since '98 and have never engaged in shill bidding. Only once have I been disappointed with the final selling price of a "big-ticket" item.

I know somebody

[itwerx]

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 a guy that...

[genrader]

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.

Yes, eBay IS the Promised Land

[Motherfucking Shit]

Over the past year, I've made more than $10,000,000 via eBay. That's net, not gross! My strategy is: set a very high "Buy it Now" price, and make that the same as your "Reserve" price. For someone to actually win, they have to capitulate to exactly the amount you were hoping for. If you locate evildoers who are selling similar products at a lower price, just have the Attorney General send a VeRO dispute to eBay. Easy!

The media has criticized me for running what they call "no-bid" auctions, but it's sure been profitable on my end, so what's their problem?

Regards,

R. Cheney
HalliBay, Inc.

Promised Land

[turgid]

It's where they promised to send me something, and it never turned up.

50% of my ebay transactions have resulted in the loss of my time and money. I don't use ebay any more.

FreeCycle

[ClioCJS]

http://www.freecycle.org

Index of 4000+ local yahoo freecycle groups. All groups are ways of getting stuff for free, and getting rid of your own stuff easily. I got a 27" TV for my bedroom and a free router.