Starting an Ebay Business - Can it Succeed?

You've probably already seen ads for ebooks or websites telling you a fortune can be made on Ebay. Certainly, a lot of money is being made on the world's largest online auction site, but can you really run a successful auction business this way? There are a few things to consider.

Finding merchandise to sell

Ebay is an online auction site where thousands of products are sold each day. In order to make money off this site, you need a product or line of products that can be purchased cheaply. It also helps to have a wholesaler that will drop ship their products to auction winners directly, as this will save you money on shipping and avoid carrying expensive overhead. There are many wholesalers that will drop ship, as this is becoming popular. Many can be found in the wholesale directory below.

Dropshipping Wholesalers

One place to find dropshipping wholesalers is the Drop Ship Source Directory. The directory below contains real dropshipping wholesalers of various kinds of merchandise. These are ideal for an Ebay business. Permanent access to the directory comes at a cost of $70. This may seem steep, but it's well worth the price considering the countless junk wholesalers lists on the internet. As opposed to these lists, this will provide you with wholesalers, not sub wholesalers.

However, it needs to be stressed that you will need to be able to maximize your profits in order to succeed. Although the product you're selling may have a good retail markup price, there is no guarantee you will be able to sell it for that amount with each auction. In fact, that is the biggest difficulty Ebay sellers face — the uncertainty of pricing. Some auctions will return a good profit, while others may end up causing you to lose money. Since placing an item for sale in an auction is a binding contract, you are obligated to sell the item, even if it comes at a loss. This is something you have to plan for.

Costs Involved

If you can access merchandise or items that can be drop shipped by your wholesaler, then you won't have to carry any expensive inventory or worry about shipping costs. You only pay for an item when it is sold in an auction, and some wholesalers will even give you a line of credit. In most cases, the winner of the auction pays the shipping cost, which is added onto their bill. This flexibility is the main reason an Ebay business appears so attractive, and is the key selling point in many how-to books.

But there are also other costs to consider. Ebay charges a listing fee for each item which is small but can add up over time. If you place hundreds of auctions per week, you may end up with a lot of fees without too many sales.

Furthermore, Ebay charges an additional fee when you actually sell an item. This fee is a percentage of the selling price. If you are worried about the item selling for enough money to cover your costs and hopefully make a profit, you can put a reserve price on your auction. This will prevent an auction from being won without a bidder first placing a bid for a minimum specified bid. The caveat here is that Ebay will charge a percentage of the reserve price, whether or not the item sells. Again, that is something that can add up over time and reduce your profits.

Considering the Competition

If you've ever placed a bid on Ebay, you know that for most items there are hundreds and possibly thousands of listings. That is, an identical item can have countless hundreds of listings. You might wonder then, how you can make your listings stand out among the limited (though large) number of bidders. This competiton is your main concern, since it can cost you potential bidders.

You can make your add stand out visually by making the title bold, adding pictures or getting it listed in a special section, but these all come at an extra cost. As keeping profits as high as possible is also a high priority, you must make sure you can afford to spend the extra money. It helps a lot to have a unique product to sell, since no one else will be selling it and you can spend whatever you want. Do a search to see how many auctions are already selling your product. If it's high, you should consider selling something else.

Of course, there is more to it than that. Other issues to consider include a way for you to manage hundreds of auctions at once. But don't let this put you off. While running a business on Ebay is not an easy walk in the park, there are many individuals working from home making over $45,000 a year. The point that needs to be stressed here is that there is a reason why these people have been successful, while many others have only had moderate success. Quite simply, individuals who succeed know Ebay very well. Be sure to do your research first. Click here to read 101 Auction Secrets Revealed Online

Summary of Running Ebay Auctions

Find a dropshipping wholesaler (this link will help with that) that sells the kind of merchandise you are interested in. Find a product or products that have a good profit margin and has relatively low competition on Ebay already. Then learn about how ebay works—some further reading is a good idea. When you have a pretty good understanding of how Ebay operates, you're ready to begin.

Some Further Reading

Starting an eBay Business for Dummies
This book covers the essentials an eBay user or budding entrepreneur needs to start a money-making venture by trading on eBay. Discover the essentials not only for maximizing your profits on eBay, but also how to run a smart business. This guide explains the enhanced features of eBay including their new Gallery feature designed to help business pull in customers by displaying their goods in individual online boutiques.

The Official ebay Bible
America's official eBay Ambassador shares his humor, know-how, and matchless eBay expertise in this authoritative guide geared to both the beginning bidder and seller, as well as the professional entrepreneur. Whether it's just a desire to make some extra money, buy the latest set of golf clubs, or start a new business, eBay is the best online destination. With a community of more than forty-six million people around the work every day, eBay is the world's online marketplace.

eBay Business the Smart Way
Online auction sales have grown exponentially in each of the last several years, and the undisputed industry champion is eBay, which commands nearly 90% of all online auction business. Selling merchandise on eBay is so simple and profitable that the marketplace has become as fiercely competitive as it is crowded. Whether just starting out or hoping to achieve greater success, online sellers need a solid business strategy to outrun their rivals. EBay Business the Smart Way is the answer, covering everything you need to know.

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