Auction Site Income
Making money through auction sites such as eBay, is certainly one way to start a thriving home business with little overhead. In most cases, it’s simply a matter of finding a reliable supplier, posting your auctions, and shipping out your product.
Think about how far we’ve come in the last 5 years or so. I remember starting up an old-fashioned mail order business back in 1999. Even though it’s been less than 10 years, that business model is pretty much dead and has been replaced with technologies such as eBay and PayPal. Back then, you had to find a supplier, place a classified ad in a national newspaper, rent a P.O. Box, wait for orders to come in (if you were lucky), and then ship out your product.
And don’t even get me started on merchant accounts for credit card orders. That was truly a nightmare. If you were lucky enough to have someone approve your merchant account, you paid through the nose for every transaction that was processed.
The mail order process took weeks from the time the initial order was processed to the time the customer had the product in their hands. These days we are spoiled by such services as PayPal. Whenever I hear someone complaining about paying a few dollars for a PayPal transaction, I have to laugh.
Nowadays, all I have to do is secure a good supply of my product, post my auction, sell the item within seven days, collect my money, and ship it to the customer. Most of my stuff reaches the buyer within a week. The entire process is seamless. Because eBay is completely integrated with PayPal, the most you have to worry about is posting your ad and shipping out your product – that’s it.
If you plan on starting a business around an auction site, there are a few things you need to do in preparation. One of the first things you must consider is what business model you are going to use. Here are some examples:
1. You can start by simply selling items around your house.
Everyone has things they’d like to get rid of; why not put them up for auction and make some money? The real benefit here is that you’ll get a feel for how eBay operates and what it’s like to be a seller. You’ll get an idea of what fees are charged and you’ll also have an opportunity to open your PayPal account. Obviously, you’re not going to be able to create a full-time business around this, but it is a chance to get some experience.
2. You can sell information.
Do you have specialized information that other people would find valuable? There are many people today that sell specialized information and make a lot of money doing it. I remember buying a CD for $29.95 on how to make cat condos. The gentleman took hundreds of photos and organized them in a PDF format for each model. With very good pictures and explicit instructions, I was able to create several models that would rival any pet store product. This was money well spent as far as I was concerned. The key here was that the product was high quality. I felt as though he had over-delivered for what I paid for. Can you imagine the profit he made selling one CD for $29.95? And believe me; he was selling hundreds every month.
Up until six months ago, eBay allowed people to sell digital downloads. In other words, once you created your high-quality product, you could sell as many as you wanted and the overhead would be negligible. There was no need to ship anything to a customer, you simply gave them a download link and the entire product was downloaded instantly. Unfortunately, they put an end to this practice because of unethical sellers and webmasters.
3. Sell an in-demand product to a hungry crowd.
Of course, this assumes that you are able to get a decent supply at a fair price. You must always think of profit margin.
I have a friend who sells electronic items such as cell phones, iPods, and computers on eBay. He buys the items from a wholesaler who buys from all the major electronic superstores. This merchandise consists of opened packages, demo models, and returned items. Over the past few years he’s had great success and made a lot of money selling to a hungry crowd. Most of his auctions get multiple bids and he’s always assured that he will get market price for whatever he sells.
He buys the items by the skid and the merchandise is already shrink-wrapped. He never really knows what he’s going to get or how many items will be defective. However, he still manages to make a very nice full-time income from this niche business.
Another seller on eBay lives near a very popular candy manufacturer and has a deal to buy skids of imperfect product. The candy is still good, but some of it is misshapen. He packages the candy and sells it on eBay for half of what you would pay in a retail store. People jump at the chance to buy his product and his auctions are always very active. There is no doubt in my mind that this individual is making a very good full-time income. This is how having a popular product and a good supplier can be extremely beneficial.
One of the biggest drawbacks of auction site entrepreneurialism is that there is a lot of competition for many of the products and, depending on the niche that you’re in, you could be selling your items for less than you would in a traditional retail store. In some cases, the prices are so competitive that it’s nearly impossible to make any profit at all.
Still, there are many successful people that make a full-time income selling merchandise on sites such as eBay. The only difference between them and you is knowledge and experience. Experience will come with time and knowledge can be gained from the auction site itself and from many of the excellent books written on the subject.
You never know – you could be the next online auction millionaire.
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