Making a profit on eBay

eBay has become one of the biggest websites on the internet and as such allow millions of people to sell items in an auction format. Like any online site there are plenty of opportunities to make a profit on eBay, whether it is by selling your own obsolete items, or selling on other items – with a lot of hard work you can actually make a lot of money trading on eBay.

Disclaimer: this page is intended to give you some ideas on how to make money on eBay – there is no guarantee you will ever make a dime, and you could even lose money! With hard work and dedication you can make a living on eBay, but I should point out that the number of people who actually make a living using eBay is very small. Also please note that if you click on some of the links or products on this page, I will earn revenue.

The first thing you have to do is to set up an eBay account. Click here to register. It’s easy to register and absolutely free. There is no obligation once you have registered – you never have to buy or sell anything to maintain an account.

Once you’ve registered you then have the ability to bid on items for sale on eBay or can begin listing your own items for sale.

Click here for the official eBay Tutorial.

If you want to receive quick and secure payments, and also payments via credit card then you’ll need a Paypal account. Set one up here. Paypal is becoming one of the largest and safest online ways of transferring money, however you should also take Paypal fees into consideration when calculating the profit of an individual item.

The first thing you have to understand is that listing an item for sale on ebay costs money – even if you don’t sell the item – the more ‘flamboyant’ the listing, the more it will cost.

Secondly, once you have sold the item, eBay will also take a percentage fee.

Thirdly – when you list the item for sale you have to estimate the shipping cost – generally I get an exact cost for the item (based on weight etc) and then add a small amount for handling and packaging – this way you cover any unexpected additional shipping costs.

Finally, if you’re accepting payment via Paypal then you are also likely to be charged a fee.

So before you even start listing items for sale, you really need to calculate all the costs and this will help you decide exactly how much to charge for the item.

For more information on fees, click here.

If you’ve never sold anything on eBay before, it’s always a great idea to ‘practice’ by selling some of your household items. This serves several  purposes:

• Gives you some insight to the whole process and helps you tweak your own system to maximize profits.
• Helps you build a reputation – the more people that give you positive feedback the better – so the more items you can sell before really investing in selling on eBay, the better.
• Gives you some cash with which to buy stock etc.

One method that seems to work well is to go to garage sales and look for bargains. As an example, look for old DVDs and offer a price for bulk purchase – perhaps paying $20 for 50 DVDs – you should be able to sell a DVD on eBay for at least $1 and therefore have made a $30 profit (less costs) without even trying.

Another great way, although it may be a little macabre, is to go around to all the estate sales you can find - generally the quality of items will be better, as most garage sales are for people to get rid of their 'old' stuff, where an estate is generally liquidating assets.

Drop shipping is essentially supply chain management – you do not have any stock, but instead transfer customer orders and details to a wholesaler, who then ships the goods directly to the customer. Most drop shippers will charge a monthly fee and take a percentage of every sale, so you have to really make sure you set the price at the right level. Most of these companies have tools that allow you to automatically list their items.

Drop shipping is a great idea, but you have to realize that there are literally thousands of people using drop shipping techniques on eBay and therefore it is very difficult to actually get that many sales.

I wouldn’t advise any beginner sellers to use this method of selling products on eBay until they thoroughly know the market and the competition.

Absolutely! Making your own products is probably the best way to make profits on eBay. However, you must do your research and try and find out what the market wants and what your competition is. High quality items are probably going to sell the best in the long run, and if you can find a niche market (for example – handmade wooden light-houses) then with the right marketing you could really do well on eBay. I’d suggest you create a separate web page about your products and then link to the relevant auction item.

There are a lot of people making money by creating their own items. Examples of this are jewelry, favors etc.

It’s always a good idea to do a test run, perhaps make five items, and see how well or quickly they sell.

This is a great way to make a lot of money – however, you really have to know the products you are buying and know how much they can sell for. Spotting items that have no bids and then purchasing them for the lowest possible price, gives you the opportunity to re-list the item and potentially make more money – this is a risky method though, as you may have to spend more on marketing to get the items to sell.

There are many companies on the web that buy unsold inventories from high street stores, and then sell them on in bulk lots. This can vary from clothes, to DVDs, CDs and Video games. You normally buy a job lot with a generic titles such as ‘100 Action Video Games’ and often do not know what you are getting – but if you can afford to buy in bulk, you can get these items very cheaply and should be able to make a profit on them – again there is risk involved as you have no idea what you are buying

There is a small but lucrative market for making and selling software / worksheets / websites etc.

Essentially you design the software and then sell it on to the customer, for example I have sold:

• Worksheets that assist eBay sellers in calculating the profit from individual items or multiple items on eBay.
• Worksheets that help people plan their monthly cash flow

Other ideas:

• Websites that sell particular products – usually the designer will buy a domain, create a website and a Google adsense and Amazon affiliate account and then sell them on to the customer.

Using the eBay affiliate network is one of the easiest ways to make money on eBay – essentially you become an affiliate of eBay and list auctions on a webpage that you own. You will get paid for any clicks that go from your website to eBay. The amount per click is based on the quality of the customers you send to eBay and the amount of sales.

For example, all the books listed on the website are listed using my affiliate account – every time someone clicks through to the auction I earn some revenue. It’s an easy way to make money off eBay and as long as you can create and maintain decent websites and work on marketing and SEO is also relatively cheap.