Q: I hear so much about people who started selling on eBay and eventually turned it into their full time business. Is it really possible to build a profitable business just selling junk on eBay? -- Alex K.
A: If Fred Sanford were alive today, Alex, I'm sure he'd be earning his ripple money by selling quality junk on eBay. While it's also true that one man's junk is another man's treasure (I have a garage full of treasure to prove this point), your chances of building a profitable business selling "junk" on eBay (or anywhere else, for that matter) are slim to none.
While there is a lot of junk reasure for sale on eBay, it is typically sold by individuals who have "I break for yardsales!" bumper stickers on their cars and not serious business people.
For serious entrepreneurs, however, selling on eBay can be a good way to start a new business if you are willing to put in time and energy required to make business a success. eBay is also a good option for existing businesses to expand their reach by selling online.
Everyone from small used car dealers to giant companies like Dell Computers have discovered that eBay is an excellent place to hawk their wares simply due to huge number of folks who visit eBay site on a daily basis. Nowhere else on earth will you find such a large pool of potential customers.
Consider these numbers: · There are nearly 69 million eBay users who spend $59 million every day. · Most eBay sellers are home-based businesses that sell every- thing from porcelain dolls to locks of Elvis' hair to $100,000 Mercedes convertibles to $5 million dollar vacation homes.
· Every minute of every day more than 150 new items are listed for sale, more than 500 bids are placed, and seven new people register to shop on eBay.
· At any given moment, eBay is conducting some 12 million auctions, divided into about 18,000 different categories.
· About two million new items are offered for sale every day, and 62 million registered users scour site to find them. · One company is grossing more than $5 million dollars a year selling brand new pool tables on eBay. Their eBay store is so profitable that they have closed their retail location and now sell solely online.
That's right, $5 million dollars from sale of pool tables: proof that you can sell just about anything on eBay if you know how to do it.
Be aware, however, that eBay is no magic bullet. As any eBay Power Seller (a seller who sells a minimum of $10,000 in goods per month) will tell you, building a profitable eBay business takes hard work and requires long hours, and often financial rewards do not make it worth effort spent.
When it comes down to mechanics of it all, running an eBay business is no different than running a brick and mortar business. You still have same considerations regarding product selection, inventory purchasing, product pricing, inventory management, order processing, fulfillment, customer service, etc.
You must also consider legal and accounting aspects of business. Just because you're selling online does not mean that Uncle Sam won't expect his piece of pie. Revenue generated by an eBay business is just as reportable and taxable as revenue generated from a brick and mortar store. And if you sell to customers within your state you may also be responsible for collecting city, county or state sales tax.