A lot of people out there claim to have some big secret that you’ll need to know to make money from home on eBay. However, all you actually need if you want to know how to make money on eBay is a basic understanding of economics, a supplier of goods and the willingness to put forth some effort. Once you put the work in and find suppliers for items that you figure will sell on eBay, the rest is fairly mechanical and simple to do. In what follows, we’re going to walk you through the process of making money on eBay and eventually scaling up to a sizable operation.
Finding Where the Demand Lies
The premise of your eBay operation will be to sell items at a higher price than you pay for them. This sounds simple, but it actually takes a lot of effort. The first thing you’re going to have to do is perform market analysis to find products that are in high demand. A really good way to go about this is to do a lot of research upfront and to get a list of at least 10 to 15 products when you’re starting out. If you want to do more, that’s great, but going higher than about 30 items is going to be overkill during this step. Your list should include a precise description of the items being sold, the prices the items are being sold at, and the approximate shipping costs. Once you have this list, it’s time to research suppliers.
Getting Suppliers to Meet the Demand
Once you have your list of products that you could potentially sell, you want to start looking for suppliers for these items. The main things you want to look at are the prices of the items themselves, the price of shipping and any bulk discounts you can get. An ideal situation is when you can find suppliers who will drop ship the items. Drop shipping is when your supplier will mail the products directly to your customer, and this helps to cut down on costs since shipping is only paid once. While finding a supplier that will drop ship is ideal, it’s not going to be particularly common, and chances are that less than one half or one third of the items that you have on your list will actually have suppliers willing to drop ship.
Starting Slow is Key
Now you have a list of items and a list of suppliers for these items. Go down your list and find two or three items that offer the largest profit margin. These are going to be the items that you start with. The important thing to keep in mind here is that starting slow will allow you to see if these items are going to sell like you hope they will. When most people are working out how to make money on eBay, they are really eager to get started and often jump into the metaphorical deep in. You should be more patient when you’re starting out and try to make sure that things work on a small scale before you try to make them work on a larger scale.
Keeping Good Records
If you keep your lists of items and suppliers organized in a spreadsheet, you’ll be one step ahead when your operation starts taking off and you have to keep up with all of your individual sales. In the same spreadsheet file, but in a different tabbed sheet, it’s a good idea to dedicate an area to list all of your sales. Having this information organized ahead of time will save you a lot of grief when it comes tax time, but it also helps you to have a clear view of which items are profitable to sell and which items are slowly becoming unprofitable over time. Because the markets change, the items that you sell will have to change as well if you want to continue making money on eBay over the long run. By adapting to the changing circumstances and analyzing your records, you will be taking an active approach in protecting your future. People who take an active approach like this one are the people who ultimately make real money on eBay.