Expert: Marvinator - 5/18/2004

Question
Hi Marvinator
Wanted to get your advice about selling on eBay.  My daughter had twin girls 3 weeks ago(already had a 3 y/o son) and my wife is looking for a way to help her but we still need her income(about $20,000/yr. We bought the book "Starting an eBay Business for Dummies" but wondering about 3 things based on first hand experience.
Is it possible to make $20,000/yr selling on eBay based on what you've seen or is that a reach and secondly, are wholesalers the best source for product or are garage sales, Costco, Big Lots, 99 cent stores, etc better? And is it better to find a niche instead of trying to sell "everything"?
We don't know what we want to sell yet. That's one of the things we're trying to decide. We've never been one to keep stuff--my philosophy is you either use it or you don't; if you don't, get rid of it.  Wish I had that to do over.....so we don't have a lot of stuff around the house to  start off with. I know that the income side depends on the amount of time we put into it and we're both prepared to work at it 40-50 hours a week, especially at first to get it off the ground. And I know it all ties back to what we decide to sell, so my questions are "generally speaking".  Any other advice you want to throw in would be appreciated.
Thank you so much
Don  

Answer
If I understand your question, it can be broken down into three parts.  1) Is it possible to make $20,000 ayear on Ebay?  2) What amount of work is involved to reach this level?  and 3) what items are best to sell?

Let's get right to it.  
Is it possible to make $20,000 a year on Ebay.  Yes.  I know several people who have done it.  Now, the correlary to that question is that there are literally HUNDREDS of thousands of people that sell on ebay that do not make it. I know many others that have quit jobs, tried ebay and nearly ended up bankrupt in the doing!    

Unfortunatley, the media is partly to blame here.  Most, if not all, of the people profiled on the news (60 Minutes, 20/20, even local and regional News and media) were successful selling their product before they got to Ebay.  These are the wholesalers, retailers, and mail-order moguls who merely moved their focus from one arena to another.  In addition, they kept the income from their old arenas thus widening their profit margins.  This is much like the local hardware store, back in the 50's who discovers that he can widen his market by advertising on a new media: Television. Same business, same product, New Venue. More customers, more profit.

The number of people who are truly "successful" on Ebay and on Ebay alone, are far and few between.  Unless you have a product which can be sold for far less than retail, and still make a profit, Ebay won't be the place for you. I know one woman that sells on Ebay and makes a living. She purchased a brand new Jeep and pays her bills all from Ebay money.  She works 7 days a week.  5 days, Monday through Friday she works 12-14 hour days listing and working the auctions.  On Saturday she's out hitting yard sales, stores and wholesale warehouses for product to sell.  Saturday night she's packing the weeks shipments (sometimes as late as midnight! and she ships on Sunday!  Yes, she makes a living, but note that there is no time for a personal life in that scenario. In addition, if she cut down on the amount of work, her income is affected.  

Lastly, what will you sell? The one thing I can tell new sellers is that you have to sell what you know.  If you know a bit about Widgets, then I'd say that's your area to sell.  If, however, you don't know the difference between a widget and a Flangle, then you will do better to look elsewhere.  Everyone knows a bit about something.  You need to assess your own abilities and your own knowledge areas to find those items with which you will do best.

Ebay is not a venue where you can just buy a box of stuff, put it on auction and have them sell.  Ebay is a constantly changing and shifting market.  what sells today may not sell two weeks from now and visa versa.  This is why it is imperative that you know your product AND be able to sell it better than your competition.

I'm not trying to keep you from continuing with your Ebay experience, but merely to add to your knowledge level.  Now, at least you are armed with the knowledge that many of the sellers out there selling the same items as you are - wholesalers with huge warehouses of product which they can sell quite cheap.  With that knowledge, you must now answer the big question of not which wholesaler to buy from, but 'Where do the WHOLESALERS get their product?'  and "Can I use the same source?"  It makes sense that there has to be a  way for wholesalers or outlet warehouses to get the product that they sell, and get it cheap enough to make a profit.  If you can obtain product at the same level, then you too can be selling cheaper than wholesale.

Many sellers on Ebay find stores that are going out of business and buy their old inventory at reduced prices.  Others deal with department stores buying their shopworn, shelf displays and old stock. These can usually be obtained for pennies on the dollar. As is well known, many sellers troll garage sales, dollar stores and church basement sales looking for product.  With a little work, you can clean up the product (if necessary), test and sell on ebay with a better profit.

The problem with this scenario, and I hope you can see the problem, is that this becomes a two sided business.  On one side you have the listing of product and dealing with buyers, and on the other hand you have an ongoing process of getting, cleaning and preparing the product.  Both seem like full time jobs and in fact they are.  Again, this is why so many Ebay sellers don't make it.  They can't get past the total amount of time that such a business takes.    When you see those people on the news, look past the New cars and jewelry and houses and you will see that the entire family is involved.  

Let's go through the process so that you can see it in one paragraph.  First you have to get the product. Clean it up, (even if this means removing price tags carefully) and get it ready to sell.  Then you have to take a good picture.  Then you have to download the picture, adjust it for viewing, and even crop it. Then, you must examine the product again, taking measurements, getting a good description.   Then write up the auction, uploading the picture with it. Then what a lot of people leave out: Tracking the auction. Checking on bidders with bad feedback, canceling bids where necessary, answering questions from bidders about information you've already put in the auction.  ('What color is this blue blouse?" and "What size do you mean when you say 'large'? Can I fit in it if I wear a..." you get the idea...)  But you're not done yet.  At the end of the auction, you must contact the winner, quoting total shipping and bid. Then you must track the payment, and get the funds in hand and into your bank. Then the item must be packed with care, and taken to the shipper and paid.  One more step, and that is making sure that the bidder GETS the item, and leaving feedback.  Seems like a lot doesn't it? This is the steps needed on any item, regardless of price.  Now multiply that by 100 items a week, every week.  

Again, I'm not trying to keep you out of ebay, but to give you a truthful look at the 'job' of ebay. It's not an easy job.  

I hope you will have a great Ebay future, and if you need further help, I will be happy to answer any other questions you may have along the way.