Three billion dollars (that’s billion with a "B") in revenues, 135 million users, millionaires all over
place at eBay! Yeah, eBaby!!!, to steal a line form another great author. (See "EBay: No Way…Yes Way (Ten Seller Themes) by Barbara Snyder M.A.” at http://www.sbmag.org/howtosellonebay.html)Yeah! Wow! … Make a million! Open a store on eBay and get rich! Man this is easy!!! –NOT!!!
It’s way to easy to get caught up in all hype out there about eBay and to start thinking all you have to do is set up an eBay store and you are on your way to life style to which you would like to become accustomed. Don’t believe it.
Before you start primping for your own segment of "Life-styles of Rich and Famous," there are a few things you should learn about eBay and small business start-ups in general.
The rate of survival of a traditional small business reads something like half of all new business start-ups fail in first year and half of survivors do not survive second year, and eBay is probably no different. In fact, it’s not easy at all anymore (if it ever was) to carve out a fortune on what has been dubbed "the world’s largest garage sale".
"But Floyd, take a look at all that money", you say. Sure eBay is doing just fine, but of that three billion dollars, how much of it is actually spent on items in "your" category or product line "you" have for sale?
Everyone has to decide exactly what business he or she wants to be in. Then they have to decide if they are going to be a niche player or try to carve out significant market share. Either way you decide to go, you may find out that pool you are swimming in is not as deep as it may first appear. Unless you are selling automobiles or real estate, not all or even a large percentage of that three billion dollars is spent in your merchandise category. Make sure you check water before you dive in head first.
When you do decide to jump in, make sure you are ready both financially and mentally to go through a learning curve of some months. Back in earlier days this may not have been case, but today eBay has become extremely competitive and significantly more expensive for sellers. And don’t expect a lot of help from eBay directly. They are not greatest company in world at customer support. They have a lot of information available, but they also have a tendency to answer help questions with loads of boiler plate "fixes" that usually serve more to confuse then to actually help.
Speaking of fees, this is how eBay lives. They literally nickel and dime you to death (actually its more like quarter and dollar)… thirty cents for cheapest insertion free, thirty-five cents for a gallery picture, a buck for "bolding" and on and on. And then there’s fair value selling commission and PayPal fees (PayPal is a must have!). All these small fees add up fast. Don’t forget, you pay listing and insertion fees whether your item sells or not. You will quickly learn that your selling percentage becomes crucial and why it is so important you learn how to make very efficient listings at lowest cost possible as fast as possible. If you fail to learn this, before for you know it, eBay is taking half or more of your total sales just in fees, not counting your cost of product and shipping.
eBay has been called "world’s largest garage sale" for good reason. You know what people are looking for at garage sales, cheap prices. In beginning, if you were only one on eBay selling a specific product, you could demand and get higher prices. Today it’s a bit different. The competition is brutal. You are competing against people and business of all sizes, and there is always someone selling your product at very, very low prices, or worse yet, using it as a loss leader. Some of these people are huge jobbers and or manufactures themselves, hard to compete against. Some sellers are part time or hobbyist and don’t need or care if they make much money (and they probably don’t). Unless you have a very unique product or are in a position where you can bring a new, hot product to eBay first, you must be prepared for extremely aggressive pricing competition in a market where average buyer is looking for cheap beer prices on high quality champagne.
