Small Business Q & A: The Secrets Of Starting A Successful Ebay Business

Q: I hear so much about people who started selling on eBay and
eventually turned it into their full time business. Is it really
possible to build a profitable business just selling junk on eBay?
-- Alex K.

A: If Fred Sanford were alive today, Alex, I'm sure he'd be
earning his ripple money by selling quality junk on eBay.
While it's also true that one man's junk is another man's treasure
(I have a garage full of treasure to prove this point), your
chances of building a profitable business selling "junk" on eBay
(or anywhere else, for that matter) are slim to none.

While there is a lot of junk reasure for sale on eBay, it is
typically sold by individuals who have "I break for yardsales!"
bumper stickers on their cars and not serious business people.

For serious entrepreneurs, however, selling on eBay can be a good
way to start a new business if you are willing to put in the time
and energy required to make the business a success. eBay is
also a good option for existing businesses to expand their reach
by selling online.

Everyone from small used car dealers to giant companies like Dell
Computers have discovered that eBay is an excellent place to hawk
their wares simply due to the huge number of folks who visit the
eBay site on a daily basis. Nowhere else on earth will you find
such a large pool of potential customers.

Consider these numbers:
· There are nearly 69 million eBay users who spend $59 million
every day.
· Most eBay sellers are home-based businesses that sell every-
thing from porcelain dolls to locks of Elvis' hair to $100,000
Mercedes convertibles to $5 million dollar vacation homes.

· Every minute of every day more than 150 new items are listed
for sale, more than 500 bids are placed, and seven new people
register to shop on eBay.

· At any given moment, eBay is conducting some 12 million
auctions, divided into about 18,000 different categories.

· About two million new items are offered for sale every day,
and 62 million registered users scour the site to find them.

· One company is grossing more than $5 million dollars a year
selling brand new pool tables on eBay. Their eBay store is so
profitable that they have closed their retail location and now
sell solely online.

That's right, $5 million dollars from the sale of pool tables:
proof that you can sell just about anything on eBay if you know
how to do it.

Be aware, however, that eBay is no magic bullet. As any eBay
Power Seller (a seller who sells a minimum of $10,000 in goods
per month) will tell you, building a profitable eBay business
takes hard work and requires long hours, and often the financial
rewards do not make it worth the effort spent.

When it comes down to the mechanics of it all, running an eBay
business is no different than running a brick and mortar business.
You still have the same considerations regarding product selection,
inventory purchasing, product pricing, inventory management, order
processing, fulfillment, customer service, etc.

You must also consider the legal and accounting aspects of the
business. Just because you're selling online does not mean that
Uncle Sam won't expect his piece of the pie. Revenue generated
by an eBay business is just as reportable and taxable as revenue
generated from a brick and mortar store. And if you sell to
customers within your state you may also be responsible for
collecting city, county or state sales tax.

One of the biggest obstacles to building a successful eBay
business may be the stiffness of the competition. Many sellers
sell identical items and the price wars often get ugly, but that's
to be expected in a free market place, which is exactly what
eBay is.

You may be the only store in town that's selling that one of a
kind, custom made just for you, broke the mold after they made it,
Dale Earnhart Memorial Bobble Head Action Figure (Earnhart fans
would string me up if I called it a Doll), but do a quick search
on eBay and you'll probably find a hundred others just like it.

So, can you build a profitable business selling on eBay?

Certainly, thousands of people have done it and so can you.

Here are a few tips to help get you started.

Sell Quality Products
Don't sell junk! Leave the knick-knacks and fake leather jackets
to the less informed. You should offer only quality products at
a fair price.

Research The Competition
Once you have your product in mind, don't invest a dime on
inventory until you have spent some time on eBay to see what the
competition is doing. If you want to sell motorcycle helmets,
for example, you should look at current auctions to see how many
others are selling similar helmets and what prices they are
charging. This step is vital since you may discover that you
can't compete with current sellers on price or there is simply
no market for what you have to offer.

Start Slowly
Many people believe that the more items they have for sale on
eBay the better. They will invest thousands in inventory and
spent hundreds on listing fees (yes, eBay charges you to list
items for sale and collects a final fee if the item sells).
Those are the folks that usually end up with ten thousand Ginsu
knives forever in their garage.

Test, Test, Test
A fair portion of eBay auctions result in no sales, so it's best
to test the waters before jumping in with both feet.

List a few items and see how they sell. If an item doesn't sell,
list it at least twice more. Some items might not sell the first
time, but may the second or third, then sell steadily from then on.

If an item gets no bids the first time, consider adjusting your
price or your terms. If an item sells well, keep it in stock
and then experiment with another item.

Do Your Homework
eBay is too broad a subject to be covered fully here, but there
are a multitude of books available that can help you start an
eBay business. In fact, I bet you'll find most of them for sale
at this very moment at eBay.

What's my bid…

Here's to your success.

Tim Knox
tim@dropshipwholesale.net
For information on starting your own online or eBay business,
visit http://www.dropshipwholesale.net