Using eBay to Make Money

Selling on eBay can be a great way to make money. It's not hard, but it does require patience, persistence and a good business sense. You don't have to be a business expert, but using eBay to make money means approaching it like a business in order to make a profit.

Just Start

While a solid business plan is essential for any business, even an eBay business, you can dabble on eBay while you’re working on your plan. In fact, using eBay to make money while developing a business plan makes sense because you'll be gaining a storehouse of knowledge. Start by selling whatever you have around your home. Look at items you don't use any more. Take a photo of them, upload the photos to your eBay account, and watch the bidding. Don't be discouraged if your first few auctions don't go as well as you hoped. Instead, keep a close eye on similar auctions to learn how to adjust yours. Conversely, if your first auction is a wild success, don't expect that to happen every time.

As you watch you sales and other auctions, think about what niche you can fill.  Consider products that are hard to find in an offline retail environment. Also consider what products are popular enough to drive sales volume. Then, think about how you can either obtain those products from manufacturers or wholesalers and fill the orders yourself (order fulfillment), or arrange shipping from a drop shipper. A drop shipper handles sending the product to your customer.

Drop Shipping

With this method, you have low or non-existent inventory investment, lots of flexibility, and more time to focus on your core business. However, you have increased costs because you're paying someone else to do work for you, there's more competition because lots of eBay sellers use drop shipping, and returns and product availability (out of stocks) can cause big headaches.

Order Fulfillment

With this shipping method, you keep control over your inventory, can make more profit due to increased margins on the products you sell, and know when you have items to ship. Of course, keeping your own inventory means you need money to buy the inventory, as well as space to store and ship the items you sell. You should carry only as much inventory as you need to fill orders.

The secret to winning in retail is to buy your inventory low and sell it for as high a price as the market will bear.  

Also, establishing a niche will help you make a name for your business. By focusing on one thing to start, you can work out all the issues surrounding pricing, shipping, handling returns, etc.   Then, as you gain expertise, you can think about opening other stores on eBay that fill a niche.

Copy and Photos

Be sure to spend time on you descriptive copy and photos. You may not be a pro and writing headlines or taking pictures on the first product you sell, but you should put time and effort into perfecting this part of your business.

Reputation

Regardless of what you sell, the most important thing you have on eBay is your reputation. Buyers will be able to leave feedback on their experience with you, so be sure to keep the lines of communication open with your buyers. Of course, not every transaction will necessarily go as well as a buyer will like. An eBay company can absorb some negative reviews. Just be sure to keep the vast majority of your reviews positive.