Starting an eBay Business

With the recession and all the recent financial hardships we've been facing, many people are still tightening their belts and looking to save money how ever they can. Many people are also looking to secure a second income, usually from an online business that they can do part-time or even after their normal hours of work.

 

Many have great ideas, but don't know where to start. There are many ways to make extra money, from selling on eBay, to selling at markets, garage sales, and car boots. But for most people, selling items on eBay is perhaps the easiest way to start. The benefits are clear to see, as you can work from home, selling to millions of prospective buyers who have cash to spend, and can devote as much or as little time to it as you wish. It is very easy to start a small business on eBay, however, many fail at the beginning. The usual mistakes are failing to find products to sell on eBay that have a good profit margin, finding products to sell that people will want and the failure to understand best practices on how to sell on eBay effectively.

 

The assumption that big retailers get their products at cheap wholesale prices, is mis-guided on a number of levels. First, big retailers have the capital to secure products in genuine bulk (bulk meaning hundreds of thousands of pounds/dollars on a set of products). This is a huge mistake that new businesses make, with their thinking being that they can go to a wholesaler and purchase in very low quantities.

 

True wholesale prices are only attained through big orders, often needing to meet the wholesalers big Minimum Order Quantity. When you're starting out on eBay, you'll want to purchase items in smaller quantities until you know that they are selling and that you'll be making a profit. So although you'll be paying slightly more for your items and selling them with a smaller profit, your up front costs are lower and you're not risking a large amount of money.

 

The second big mistake new businesses make, is the assumption that high ticket products, like tablet computers and laptops, have huge margins for profit. Often they do not and they can actually be one of the lowest margins out there. Big retailers actually make very little profit on the sale of these items. They make their profits from a process called up-selling. That is, selling a product on top of the initial main product, such as accessories or extended warranties. They also need to sell a high amount of product to make a lot of money.

 

There are many trains of thought on how an everyday person can start a profitable eBay business in their spare time. The most popular way is sourcing products from China, where often the minimum order quantity will be lower, and the cost per unit much lower than UK or US wholesalers. However, the problem here is that a buyer still needs to buy in true bulk, as often shipping rates are high, and with Import Tax being charged on top of this, it sometimes works out more expensive to source items from China. Buying smaller quantities at slightly higher prices from your own country instead of importing is the way to go when you are starting out.

 

A lot of new start ups on eBay also assume that they need to be offering large quantities of the same item. With eBay you'll have a selling quota where you can only list a set amount of items per month. If you list 60 tshirts with the exact same design, you're eating into a lot of your quota and you are best of diversifying the products that you offer. Offer a good range of products.

 

To be successful on eBay, an entrepreneur must research and learn how to sell on eBay and how to set up their eBay business correctly. Secondly, a business must thoroughly look at and research products to sell on eBay, in order for them to start a profitable eBay business.

 

In all, it is not easy to start any business these days, however, eBay does offer an excellent platform for even beginners to start building up a small, successful business.