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For the few of you who don’t know, eBay is on online auction site and destination for people to buy and sell goods. Essentially, eBay is one massive garage sale/shopping mall.
Now, by calling it a garage sale, I don’t mean to imply that people only sell junk or that there are not many professional sellers. People certainly can make a living form selling items on eBay and many of the items listed are brand new. eBay has also sold numerous high dollar items, including jets, yachts and even a multi-million dollar lunch with Warren Buffett.
To make money on eBay, you must first have something to sell. Initially, this shouldn’t be a problem for anyone. Unless you are an extreme minimalist (or a newborn baby) you have accumulated a lot of junk over your lifetime. Selling your own items is a great way to start learning eBay, make some extra money, clean out your house, and let others use your unused items.
Once you have run out of your own stuff to sell, you can sell other people’s stuff for a commission, find items at thrift stores and garage sales, buy new items from a wholesale source, or buy underpriced items on eBay to re-list.
As with every other method, eBay has some advantages and disadvantages.
One positive is that selling items on eBay can be very low risk so long as you are selling your own items. You weren’t using that stuff anyway! The risk goes up when you start paying for inventory.
eBay sales has the potential for scalability, it is kind of middle-of-the-road in this regard. Selling your own stuff isn’t scalable, you run out of stuff. If you find a good source of wholesale goods with a decent profit margin, you can scale up and automate, but you may actually want to shift to a different model (starting your own online store). Sourcing goods from garage sales, thrift stores and other eBay auctions only scales to a point. You eventually run out of time to find the inventory. Selling other peoples goods is a bit more scalable if they bring the goods to you, but researching pricing and writing descriptions for diverse items takes time. Most people that I know selling on eBay do it as a hobby for a little extra income. It can be a fun treasure hunt, but profits are limited.
Another advantage of selling items on eBay is that it is a good way to generate funds to fund more profitable and scalable ventures.
Selling on eBay doesn’t require much start-up capital at all. An account is free and if you are selling your own items, you don’t have to buy inventory. Packing materials may cost a bit, but you should be reimbursed. The main start-up cost is time.
There is a learning curve associated with selling items on eBay, and due to the limited scalability of this income stream, one has to question whether all the learning is worth it. If you enjoy thrift stores and garage sales, eBay is an excellent source of a second income. However, if you are looking for something to replace your primary income, other sources hold more potential.
In short, selling items on eBay is fairly low risk, somewhat scalable, and a great source for funding other ventures. It likely is not a good choice for a total income replacement.
Ratings (out of 10)
Start up Cost: 1 – It doesn’t cost much if you are selling your own stuff.
Internal Risk: 1 – Losing money isn’t much of a risk if you don’t have inventory.
External Risk: 1 – The only risk is that you won’t sell anything.
Scalability: 5 – There is potential to scale if you are selling other people’s stuff or you buy in bulk.
Learning Curve: 5 – There is quite a bit to learn to sell on eBay and even more to learn if you hope to do it well.
Profit Potential: 5 – Some people earn a lot of money selling big ticket items, but they are in the minority.
Location Independent: 5 – You are probably limited by where you get your inventory.
Extrinsic Benefits: 2 – Selling on eBay can be fun if you enjoy hunting down treasures.
Links to help you sell stuff on eBay
Photo credit liewcf