Pardon us for a moment while we play "Devils Advocate" to explain the reasons why some of these 11 most commonly suggested methods for making money on eBay, are impractical or more accurately, are methods destined for failure.
If your goal is to start an eBay based business you should read this article.
The best way(s) in our opinion, to make money on eBay as part of an well crafted eBay business plan, will be revealed after our review of these more "commonly" touted methods.
The text in this post edited in italics is a previously compiled list of 11 common methods for sourcing products to sell and make money with on eBay. The article was originally written by a self appointed drop ship guru by the name of Mike Makler AKA "The Coolest Guy in the Universe".
Last Year over 20 Billion Dollars worth of product was sold on Ebay. (Yes Billion with a "B"). Many people are earning $10,000 or more selling on Ebay. Many more would like to sell on Ebay but they face that big hurdle - Where Do I find Items to sell on Ebay. Here are the 11 Best Places to Find Items to sell on E-Bay.
Copyright © 2005-2006 Mike Makler the Coolest Guy in the UniverseOriginal Article Source: http://EzineArticles.com
About The Original Author:
Mike Makler has been Marketing Online Since 2001 When he Built an Organization of over 100,000 Members
1 - Garage Sales
The Strategy that works best with Garage Sales is stop by at the end of the day and offer to buy all the merchandise they have left. You can often spend $25 - $50 and then resell on Ebay for $500 or more.
Why is this a very difficult way to make money on eBay? - Because for every item you spend the time to find at a garage sale you must perform several time consuming steps before that single item can be sold on eBay. Each item must be evaluated, cleaned, tested, described, photographed, categorized, listed and stored. This is a lot of time invested in each item purchased at "Garage Sales", and that time is multiplied by a factor of however many items you purchase in that lot for $50. Therefore, for each 20 item lot you purchase for $50, you will spend approximately 20 hours of your time getting those items listed on eBay. How much is your time worth? Lets say you value your time at a very low $10 per hour, now your investment in these 20 items is worth in excess of $250, not including the time or gas money spent in finding the original "Garage Sale". Will each lot or haul from these "Garage Sales" net even one item which will return your investment in time and cash? Will all of the items sell on the first listing on eBay? How much more money will you invest in eBay fee's and charges to sell these used cast off "Garage Sale" items? - Garage Saleing is a fun pass-time for the retired and a possible business endeavor for people who work at Flea Markets, but for eBay it is a losing proposition. Suggesting that eBay sellers should source product using this method is similar to suggesting to gamblers that they can get rich by playing bingo.
2 - Storage Units
You've seen those Storage units. If people don't pay their rent the contents are auctioned site unseen. You can almost always make huge profits reselling these items on Ebay and you almost always break even if you happen to get a lemon.
Breaking even is not the goal - The goal is to create a business on eBay. While this is a better idea than Garage Sale sourcing... because the auctions which list these storage unit sales are organized and localized (i.e. you will spend less time finding product). It is not a way to make money on eBay on a consistent basis unless you have a system to cull through an enormous amount of useless and profitless items packed in boxes and crates to get through to the few items which will make you a profit on eBay.
3 - Household Items
Clean out the attic, go through the garage and even your closet. Most Households have hundreds if not thousands of dollars of "Junk" they can sell on Ebay.
This has to be the most commonly used and most ridiculous suggestion of all. Do you honestly believe you can sustain a business of any fashion by selling off your personal items? It may be a good way to get a taste of how eBay works, but this is not a way to "make Money on eBay". Breaking even is the only goal here...
4 - Government Auctions
Government Auctions are a great place to find things to sell on Ebay.
This is almost the best suggestion in the list - Government auctions can be a very interesting way to convert investment into profit on eBay. You must know what it is your buying and how much your investment will cost you to make it salable however. Most of the profitable items in this sourcing pipeline are in the eBay motors categories. Confiscated boats, cars, motorcycles, RV's and more can be purchased at select government auction locations. Finding the real auctions and cutting through all of the bogus lists of these auctions in the first chore. But once you find your local or regional Federal, State, County and City auctions, you can locate some incredible bargains among the wrecked, damaged, and titleless vehicles for sale at these auctions. I would suggest that unless you have an extensive background in vehicle repair and sales that you should avoid this method of making money on eBay. One bad deal can suck up all of the profits from three good deals. Additionally, your costs for advertising the items for sale will be much higher than with general merchandise. Plan to invest at least $75 for each eBay motors listing - then price your Government auction finds low enough to make sure they sell the first time.
5 - Consignment
This appears to be one of the fastest growing small business of the New Millennium. You sell things for other people on E-Bay and you keep 25% of the profit.
I am an registered eBay Trading Assistant, I have been a Franchise Rep for a multi-national chain of eBay drop stores, I have been working in the trenches of eBay consignment for many years... And while there are numerous reasons why you should add eBay consignment selling to an existing business or retail operation, there is simply no good way to make a profitable business out of focusing on eBay consignment as your primary form of income. eBay consignment is a great way to add secondary income, if done correctly. eBay consignment can and will attract a great deal of exposure and traffic to your retail location and your Internet web presence. BUT if you are about to launch a business as an eBay trading assistant or as a drop store franchisee, your prospects for becoming prosperous or even profitable are very slim. If you are already in this business, you should be looking for ways to bring in additional income streams, eBay consignment will not pay the overhead of a retail store location. The same rules apply here as with the Garage Sale scenario - Every item is different and every item must be categorized, cleaned, photographed, researched, described, listed, and if it sells, it must be packed and shipped. All of this is not difficult to do, but it is time consuming. When you add in the time it takes to turn away good customers because the items they bring into your store will not provide enough profit to make the investment in them to list, then you have a nightmare on your hands. The only suggestion I can provide for those who are in the drop store business, is to consider signing up for an eBay Store and then list every under $100 consignment item which comes through your door as an eBay store item. Add to the size of your web presence, create an attractive eBay store design and use the small items as bait to bring in traffic for your larger ticket items. Then get large ticket items listed - go after cars, boats, and RV's... It is the only way you can survive.
6 - Ebay
If you know a market like coins, Antiques, Stamps you can often buy items on Ebay at deep discounts from motivated sellers and then turn around and sell them at a very nice profit.
To be honest, this is how I started in eBay - On the surface it seems like the perfect plan but in the end, shipping will kill you and as a business plan, the long term availability of a sustainable niche product is not assured. Of course you can keep an eye on your favorite eBay category and look for bargains usually made available by eBay novice sellers, but as a business plan this is hit or miss. Who really wants a hit or miss business plan?
7 - Retail Inventory
If you happen to own a store this is a great way to get rid of your overstock, Off Season or returned items. Using the consignment idea you can offer to sell (hard to sell items) for local merchants on Ebay.
While this idea is not completely explained by the author or the original list, as a business plan, this is the best of the lot! If you have a retail store front and your familiar with your product line, have your source of supply already established and have a secure income stream from your existing business... Then by all means, eBay is an excellent addition to that business! Using eBay as a tool to add income, increase worldwide exposure for your business and bring in new leads in the form of satisfied customers, either buyers or consignment sellers, is an excellent eBay business plan! eBay can add o much to an established business, and in so many ways, it is difficult to fathom why more business owners have not caught on to the eBay revolution. If you want to investigate the enormous advantages of adding an eBay component to your current business plan, please contact Scott Pooler at All Business Auctions.
8 - Flea Markets/Swap Meets
Flea Markets/ Swap Meets often have Day Sellers. Many of these people don't want to load up the stuff at the end of the day and take it Home. By offering to by all that is left at the end of the day you can often get great deals.
Have you been to a flea market lately? If you have, could you tell me what is it that you would be willing to purchase at the end of the day at a flea market, haul home, process, and market on eBay? If it is available at your local flea market, it is most likely available in every flea market in the USA. How many buyers are willing to even pay shipping costs for an item they can find at the local flea market. Not a business plan, this is desperation...
9 - Church Bazaars
The Church Bazaar strategy is similar to the Flea Market Strategy above. Offer to buy what's left at the end of the day at a deep discount.
OK - I think we are really talking desperation here. What do you find at Church Bazaars? The stuff people could not sell at their garage sale... Don't even go there if you looking for a business plan.
10 Fairs and festivals
Use buy it all strategy above at local fairs and festivals.
Repeating the same useless "strategy" is somewhat deceptive. If the author is talking about Art fairs or festivals he should also know that the art category is one of the most difficult eBay categories to sell in. People almost must see art in person to be motivated enough to purchase it. I really have no idea what else the author could be speaking about? The image of the Mother Teresa in a cotton candy swirl?
11 - Drop Ship
Drop Shipping is a great way to get items to sell on E-Bay. See the Ebay Resource link below for more information.
This is where the author of the original article promoted his drop shipping list. Let's discuss drop shipping -
Drop Shipping is a universally touted almost magical elixir for eBay sellers. It sounds so easy, you set yourself up with a drop shipping resource, usually for a fee, you choose from thousands of items made in around the world (insert China), you place these products on eBay for sale, sight unseen... People line up in droves to buy the same off-brand junk every other drop shipping eBay seller is offering, you sell an item, the drop shipper then is supposed to take your order and ship it directly to the buyer.
As a business person, this sounds ideal, you never have to store merchandise, you never have to ship merchandise, you just market it on eBay for someone else, collect a small profit - if any, and hope to the gods that the drop shipper actually delivers the items you do sell.
The only good way to set up drop shipping is if you have an established relationship, one on one with a manufacturer or distributor or name brand products. These products must be in demand, they must be name brand and you will have already researched the profitability of these products before entering into any drop shipping arrangement with the company.
One scenario which would work in drop shipping would be if there were a manufacturer in your town or city, and you were able to get a business relationship established with this manufacturer. The following rules must be applied:
The products this manufacturer are in demand and are searched for on the Internet.
The price you must pay for the product allows your to make a profit - AFTER eBay fees and PayPal charges.
The manufacturer will allow you to have an exclusive eBay or better yet, Internet/Web sales channel for the products.
Without these highly desirable factors in place, you will have no control over the products you sell and therefore you are at the mercy of the drop shipping supplier, and the buyer. If the buyer is unhappy, you will be responsible. Buyers do not care if an item is drop shipped, they do not care about anything but the product and the reputation of the seller. As a seller, your reputation (feedback) will suffer if your drop shipper drops the ball too many times with shipping delays, broken merchandise, or other possible problems.
As a business owner, you must have some control over your product - how can you be if you are in business with a drop shipper you have never met?
How can you really make money with an eBay business plan?
Do exactly that - Plan to make money. You must have a business plan in place.
Add eBay sales to your present income stream if you own a retail or wholesale business.
Create an information product - Information products are a very worthwhile and interesting method to not only earn additional income for your business but also to draw traffic in to your storefront and your Internet website and eBay store.
Establish a relationship with a manufacturer of name brand products in your town or region and market their product for them on-line and on eBay with a set profit margin in mind.
Establish and eBay consignment depot within your present business - offer eBay services to your customers and they will come back more often.
Use eBay to set up a trade-up program for your new retail sales of big ticket items or equipment. Customers will appreciate the convenience and uniqueness of this concept and you will not have any capital outlay in the used equipment while selling new equipment to your established customers.
There are obviously ways to make money on eBay - 20 Billion reasons prove that out each and every year. The trick is to know the tricks and/or to not fall for the commonly proposed methods of establishing an eBay business. The real money is being made by established and recognized retailers who have adopted an eBay strategy and have used eBay to their advantage. There is no reason why your business can not benefit in similar ways and Sears and Circuit City on eBay. You must have a plan and you should not expose yourself or your business to the many methods which will help you to lose more money than you make.
eBay is like any other business - it is not an overnight wealth building magic pill - you must work at it and be smart!
Give us a call if you would like more information about how and why adding eBay and Internet sales to your business plan are good ideas and how you can avoid the pitfalls of starting an eBay business plan.