Few business ideas are as simple or accessible as opening your own eBay store. Anyone can do this, and it’s a business you can run from the comfort of your home, even supplementing income from your full-time job by running your eBay store as a part-time gig. Once you understand the ins and outs of making money with eBay, you might even make a decent living as an eBay seller that allows you to quit your “real” job. Many sellers are able to start small with a part-time eBay store, then build to a full-time job.
Regardless of how you choose to approach selling on eBay, you must read the guide below, which shows you how to make money with eBay and ensure your profits remain high. So, without further ado, let’s jump into the guide!
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How do you make money with eBay?
This seems like a good place to start; how do you make money with eBay? Well, you already know that eBay is essentially an online marketplace unless you’ve been living under a rock for the last several years. Anyone can create an account and advertise products for sale on eBay. So, whether you approach eBay as a fancy online garage sale or set out to make some extra money, your first step is the same; creating an eBay account.
Effectively, you make money by selling different goods to people all over the world. You can list your items with a ‘buy it now’ price, or leave them open for bidders, which is the original method developed for eBay. Now, you should be able to guess which of these options will yield the highest profits! Yep, leaving an item open for bids is a bad idea as may end up selling it for way less than you hoped. It’s simply too much of a risk, turning your business into a guessing game of how much money you’ll earn, which limits planning and hampers strategy development.
When you sell goods, you must pay eBay 10% of the sale as a selling fee. Think of this as your way of thanking eBay for setting up this lovely platform to support your business. After all, eBay does the heavy lifting of bringing visitors to the site with their advertising, social media marketing, and SEO (search engine optimization). You may find the fees a bit annoying, but fees are capped at $ 250. If you think the payments to eBay are wasted, think about the expense necessary to create your own e-commerce site, drive traffic to the site, and manage payments.
Instead, eBay created an easy-to-use interface for both you and your potential customers, complete with a payment portal. All you do is list your products (hopefully at the “buy it now” price we recommended), fulfill orders, and collect your profits from eBay. Of course, there’s more to being successful at making money with eBay, so read on.
Create your own products
Nothing is stopping you from creating and selling your own products. In fact, this strategy may provide significant profits as you may find that only a small investment is necessary to make products. Then, you sell your products for double or triple the price, making a lot of money for your efforts.
The issue with this approach is you put a lot of time and effort into making the products. Not only does this limit the inventory of products you have available to sell at any given time, but may result in costly stockouts that result in poor customer experiences. Not only that, but you’re dependant on payments to fund the purchase of additional materials needed to complete more products, resulting in a cyclic pattern of product availability.
If you’re only able to make 30 items a month, you’ll only ever be able to max out at 30 sales. Plus, you sell all your inventory to ensure profitability, but there’s no guarantee consumers will buy. Your investment may languish for months waiting for enough buyers to purchase your backlog of products.
If you want to go down this route, ensure you have a product that solves a consumer problem in a unique way and that you keep costs down to a minimum. There are loads of great products you can make and sell from home and makers spaces offer a low-cost means to manufacture without the huge expense of purchasing expensive equipment such as laser cutters and 3D printers, or building painting booths. If your product has a very short turn-around, you might even consider a make-on-demand model where you only manufacture your product once you have an order in hand.
Buy and sell other products
Making your own items is one idea, the other is to buy and sell other products, which is the most common type of store you find on eBay as this is likely the most profitable way to make money in the long run. Certainly, opening a retails store is how most of the successful eBay sellers made their profits. The idea is a simple one: buy cheap products, sell them for higher prices.
Often, products sold through eBay come from low-cost manufacturers in places like China and Indonesia. Of course, given the long lead time needed to receive products from these countries, you must purchase and store inventory closer to your ultimate buyer. An alternative source for retail products comes through purchasing inventory from other retailers, especially those who are closing stores or who have a large surplus of unwanted inventory. In fact, this is how Walmart got its start in the pre-internet world.
When purchasing products for reselling, the big thing to watch for is counterfeit sellers and ensure your products sold on eBay are counterfeit. If customers suspect your products are misrepresented they learn how to report a counterfeit on eBay to have them removed from the platform, which endangers your business.
Having said all of that, your most profitable venture is to buy cheap items in bulk from other websites. Alibaba is often used by eBay sellers as you can purchase unbranded products in large quantities for low prices. From here, you can sell them through your eBay account at a big profit.
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Build your eBay profile
OK, you’ve built your platform on eBay and have a reliable source of products to sell in your online store, now you must work on building your presence on eBay. It’s not enough to create an account and assume you’ll start making lots of money. Instead, you must make your profile look professional and trustworthy. As you start selling items, you improve your profile by gaining good feedback and ratings from your customers by always providing fast and effective customer service, and ensuring your products live up to the promises made in the description. These ratings demonstrate to other buyers that they can trust you and trust is a big issue on eBay!
What about when you’re just starting out? Well, you can still improve your profile by focusing on three things:
- Create a solid eBay history by purchasing items and leaving feedback. This shows you’re active on the website and not just some corporate robot designed to sell products.
- Use a professional profile name! I can’t tell you how important this is for your image as a seller. People are more likely to buy from an account that has a professional-looking name, rather than one that’s a jumble of letters. Try to think of a brand to call yourself, and set that as your username.
- Ensure you correctly translate information so users feel comfortable that you’re not some scammer. It’s a running joke that some product descriptions contain automated translations with huge errors that make the description nonsensical.
These three things help build the foundation of a professional eBay profile, and your customer service adds to this by bringing in great feedback. The more you sell, the easier it is to find additional customers.
Set the right price
Coming up with the right pricing strategy is fundamental to finding success in making money with eBay. Sell for too low a price and you leave money on the table, called an opportunity cost. Sell at a ridiculously high price and you simply won’t find any buyers. Finding the right price is a tricky line to tread, but you must find the sweet spot where your prices are both attractive and profitable.
A further wrinkle in pricing involves the informational value of price, especially for products whose quality is hard for consumers to judge. A price that’s too low suggests to buyers that the quality of the product is subpar and may result in too few sales, rather than more.
Thankfully, eBay has a feature that lets you search for a specific product and see the average price for that product across sellers on the platform. Let’s say you’re selling headphones, you can look at the most recent sales to calculate an average selling price. Once you know the average price and can play around with your pricing. If you undercut the other sellers slightly, you may be able to steal some customers while still making a profit.
Factor in delivery fees
Delivery is also part of your pricing strategy as it makes a huge difference in how much something costs end customers. You may choose to include delivery in your product’s price, or display shipping and handling as a separate fee. Either option works well, just make it clear to customers and, if you choose to include shipping, remember to factor average shipping costs in when calculating pricing and profits. If you forget to add the delivery to a listing, someone will buy the product, and you’ll have to pay for shipping, thus reducing your anticipated profit.
If the delivery fee is small, list it separately from the product price. If shipping is expensive, include it in the product pricing, since high delivery charges highlight the relationship between the cost of the product itself and the relatively useless shipping costs. Yes, that sounds absurd, but it’s how the human mind works sometimes!
Finally, the last tip is to be consistent when selling on eBay. If you don’t pay attention to the operational aspects of your business, you end up with lots of disgruntled buyers. When you make a sale, you must act fast to get products shipped out. The quicker your service, the better your ratings and the better your business looks.
Likewise, be sure to keep selling products month after month if you want to make money with eBay. You can list up to 1,000 products a month for free, after which there’s an extra charge for listings. Sell as much as you can to maximize profits!
On that note, we’ve come to the end of this guide. There’s a lot of information, but it’s all very valuable. Use this guide to set yourself on a path to eBay selling success.