I get this question a lot and it has three answers: "Yes," "no" and "maybe." Let’s see which one applies to you.
There is no doubt that it is much harder for the individual operating out of their home to make money on eBay today than it was even a couple of years ago. When I started on eBay in 1999, eBay was a license to print money. A little guy (or gal) like your or me could sell almost anything and make money. As far as finding merchandise to sell you could source garage sales or buy surplus and overstocked products from hundreds of dealers. Today, however, many of those same dealers that use to sell to me, are now selling the same items on eBay at the same price they used to sell to me.
There are still some overstock dealers who can supply product, but they are fewer. There is also much more competition on eBay today than in past years. Today there are over 1000 large companies with employees, warehouses and sophisticated distrtibution systems competing for the eBay bidder. In addition to the independent large power sellers there are companies such as Disney, Lands End, Bloomingdales Department Store and many others who either list directly on eBay or have hired companies to sell their merchandise for them under another name.
So what is the little guy to do? There are three basic strategies to succeeding on eBay today. There may be more –but I know these three work, because I have done them and in fact still do them.
The first strategy is to sell used goods including antiques and collectibles. The market for any type of used goods on eBay will always be the purview of the smaller seller. The difficulty of sourcing merchandise makes this a difficult area for large companies. At the higher end of the used market are art, antiques, collectibles and rare books. If you have some knowledge and experience in this field, it is very easy to enter. My wife and I had a small antiques shop before we started selling on eBay, so we knew what was valuable, what the values of items were and where to find them. I can walk into any small town auction in America on any weekend and buy several items that I can turn around and sell on eBay the following week and double my money or more. In fact we still do this occassionally. About a month before I was writing this article, we attended a small town auction in Mt. Vernon, Washington. I bought a box of 1950s vintage advertising tins as a lot for $175.
I broke up the lot and sold the pieces individually on eBay over a 14-day period for over $400 total before eBay and PayPal fees. There were some other advertising pieces selling at the same auction that I did not bid on. They were very clever fakes –repros as they are known in the trade. The point of telling you this is that I could spot them but you might not be able to unless you had the knowledge and experience. The lesson here is that you don’t want to go into an area you know nothing about. But if you do have experience in any specific area of art, antiques, collectibles, stamps, coins, or rare books, then this is a perfect –and fairly easy, way to build a profitble eBay business.
You don’t have to work in antiques and collectibles. There are plenty of other used goods that sell on eBay. In my book, The Complete eBay Marketing System, I list all sorts of areas of used goods that sell on eBay. They vary from clothing to books, to small appliances, sporting goods and the list goes on. I won’t take the time to go into it here –it would make this article too long, but the The Complete eBay Marketing System goes into great detail on how to select used items to sell, how and where to source them and how to sell them.
The next strategy is develop a small specialized niche market. This is in fact what most of the successful eBay sellers do. I often get emails from eBay newbies asking me where they can buy DVDs, plasma TVs, Digital Cameras, iPods and other popular consumer electronic products. I suggest you forget trying to sell any popular mass consumer product. These fields are very crowded, highly competitive and dominated by many large sellers with resources and access to sources that the average person cannot duplicate unless you have thousands or even hundreds of thousands of dollars to invest. Do you really think you can compete on eBay with Best Buy or Circuit City?
A niche is a small specialized product category that a small seller can play in. I currently sell in several niches on eBay. One product I sell is a line of high-priced wood burning firepits. I do have some competitors, but not that many and I think I do a better job of selling them. The price point of $227 is a high average selling price, so I don’t have to sell hundreds of items to make money. They are drop shipped direct from the manufacturer so I am not paying a middleman and the market for these products has been steady now for over two years. You can see my firepit auctions by clicking here. After looking at these you can link to my other auctions and see the other niche product categories we sell.
If you go to the Free Articles page on www.SkipMcGrath.com I have a couple of articles about niche marketing that are worth reading if this strategy interests you. In both The Complete eBay Marketing System and The Wholesale Buying System, I cover how and where to find wholesale sources for your niche products.
The last strategy I want to point out is Consignment Selling. I like to call this the perfect eBay business: No upfront investment in products, no inventory, high profits and minimal expenses. Once you qualify you can register as an eBay Trading Assistant and eBay will help you promote your business for free.
Once you know how to sell on eBay, it is pretty easy to find people who have goods to sell. My strategy uses low cost targeted advertising. I spend less than $40 a month and can end up some months with over $10,000 or more worth of merchandise to sell.
The trick to being successful in the eBay consignment business is in learning how to market your services, learning what type of merchandise to sell –and which to reject and how to control your fees. All of this is laid out in my best-selling book, How To Start & Run an eBay Consignment Business, published in early 2006 by McGraw Hill Publishing Co. The book includes all of the advertisements, forms, contracts and resources you need to start and run a profitable eBay consignment business.
So back to the original question: Can the little guy still make money on eBay? The answer is "yes" if you apply some of the strategies and techniques I outlined here and if you take the time to learn the skills you will need. The answer is "maybe" if you try some other techniques or just stumble around trying to learn as you go. And the answer is probably "no" if you try and compete with the big boys unless you have the financial resources and business experience to actually build a large consumer products business.