Can eBay Make You Rich?

adamlazz writes "For 11 years, eBay has been a great resource to buy or sell goods without leaving your computer. And with many stories of people getting rich exclusively from doing business on eBay, NewsFactor has decided to go in depth with these stories, and explore what it takes to really make your million on eBay. From the article: 'A tiered system designed to reward qualified sellers, the PowerSeller program is by invitation only, and has a number of criteria that must be maintained to keep the designation. At the lowest level, Bronze, a PowerSeller must average at least $1,000 in sales per month for three consecutive months; have an account in good standing; and get an overall feedback rating of 100, with at least 98 percent of the comments marked as positive.'"

Comments

As a buyer it costs money if anything goes wrong

[Anonymous Coward]

If anything goes wrong for an Ebay transaction and you can't settle it with the seller, you may be out of pocket for at least the cost of providing 3rd party "impartial" proof on a company letterhead that there is indeed something wrong with the item you received, and if you're outside the US, you may to have to fax it at your expense to the US. On a low value transaction, it just isn't worth it and you're not going to get your money back...and this is if you pay by Paypal. One thing though. If you pay by credit card and you return the item if its not as described (again at your own cost) you might be able to get your credit card company to issue a chargeback.

Now, the only reason that a seller can't sell 100 low value items, then ship turnips instead is that it'd affect their feedback score.

I use to buy lots on Ebay until I had a problem with a low value transaction. I'm not planning to use Ebay again.

I'm posting anonymously because even though what I am saying is true, I wouldn't want Ebay or Paypal to initiate legal action as prooving that I hadn't slandered them would cost a mint.

Top ten ways to get rich

[Skythe]

My friends mum does quite well for herself on ebay. She buys clothing from op shops and sells them on ebay for higher prices, usually ironing/washing and restoring the clothes herself if needed. She makes at least a few hundred a month, cant really remember how much, but she does very good for herself for a mother of 5 kids.

Not what it is cracked up to be....

[Anonymous Coward]

I used to sell on ebay, as a full time business. In antiques, collectibles, and later on, pick ups at auctions.

While this article alerts the viewer to the hard work necessary to get a profit, I feel the title alone makes people think it's more promising than other ventures. I say no.

For me, ebay was booming goldmine from 1997-2001 for items in the mainly sub-$500 range. Back then, I generally got the prices I wanted for many items and once in a while something skyrocketed in price beyond my dreams. In fact, many items I could not sell locally for years found an interest buyer on ebay. About 75-85% of what I listed sold. Better yet, people emailed me after auctions to make offers and I often sold another 5-10% on the remaining 15-25% or so. Ebay fees were also reasonable. The one downside was the shipping. Many people don't realize it the time it takes to package 5-10 items and ship them off (my items were fragile) including filling out insurance/delivery confirmation tags by hand. It take a good chunk out of your day. Also, as paypal was not the norm back then, cashing checks or money orders took quite a bit of time. Remember, I was a mom and pop operation, I could not automate these processes beyond a certain point.

To make a long story short, what happened?

1. After this period, ebay has clamped down. Every single fee has been raised, doubled, tripled, or more in price. Items that used to cost 50 cents to simply list now cost over $2.00 to list in some cases. More and more pay-for "options" were added, which wouldn't be so bad but they had the effect of making competition stand out more - so on one level with seller's it became a cold-war style game on who could outspend each other. The "gallery option" of a small thumbnail (which is almost ubiquitous in some categories) added (now) $.35 cents PER auction.

2. This all sounds like chumpchange, but my ratio of auctions sold went down, over time, to 25-40% selling rate. Worse yet, I hardly get after auction offers, as ebay clamped down on emailing members outside the control of their system a few years back. Also, the prices I had to accept were declining and going below what I actually could get locally for them. The fees started killing me. The profit margin was killing me. The shipping was killing me (if you ever see a guy with cheap prices on ebay but expensive shipping, that's because shipping is his profit margin, ebay doesn't collect fees/shipping off of that besides Paypal).

3. Everybody pays now with paypal. It is great and convenient but another expense.

4. The downswing in sales had several causes. One of which is because of ebay's success as a marketplace, every started selling there. While the amount of sellers went up exponentially by my estimate since 2000, the amount of buyers went up only linearly, creating a glut in that market. By looking at certain listings, it also is apparent to me that many must be or take sellers that work under minimum wage of the US. Some of that is because they are foreign sellers. It's fine that they sell, but I can't compete at their undercut prices - just a fact of life. They don't have the expenses I do. It's ebay's form of outsourcing.

I know other companies that had an ebay branch that have been losing money for years by creating too many listings, dazzled by revenue, but not checking all the expenses or just hoping to "build an audience" until they become profitable (customer loyalty is not strong here if prices differ more than a few percent). One such colleague just stopped after posting over 200 auctions daily for the last 7 years in addition to his regular business (he has workers, not that he sat there posting himself). After all this time, he ran the numbers and just noticed it did not make sense. After paying his workers, he was actually losing money. (The reason he never caught this was that the workers were considered as a expense on the whole company before, not that branch - he didn't seperate expenses). He just quit

Re:Ebay made me rich in experience!

[thomasj]

I know, I know. It is humourous. And I laughed too.

... But there is a grain of serious truth in this: If you value a good you are selling, chances are that it is rated too high. If you sell what you consider junk, chances are that you provide more value to somebody else than the good provides you.

This the marginal law. If I have a thousand coconuts, the last coconut provides me very little value. On the other hand somebody without coconuts at all would want to give you good money for the first coconut, less for the next ones, and very little for the 100th coconut. But as economy works, there will only be one price: The price at which the seller would think the price of the last sold coconut is still fine, and the buyer thinks the same of the last bought coconut. And that is the marginal principle. If you try to sell something where the marginal value of the (one piece of) good you are selling is higher than any buyer would have of buying it, there is no provision for a trade.

So, yes, funny but more than that.