Starting an Ebay business

[freddy]

I had an small ebay business in the early years,
I was selling things for other peoples and companys and taking a commision,
I was making about 30k a year from it so was a nice sideline at the time,
Wouldn't work now though i don't think

Like betfair i would imagine it not as easy as it once was

[Iron]

I've been pondering about to what extent what I've learned about how Betfair and the financial markets is applicable to Ebay.

Often on Betfair, people will take money from the queue rather than waiting to be matched, even in very low volatility situations. There are various reasons why they might do so, including impatience and inexperience. This is what enables scalpers to profit, and I wonder whether the principle is applicable to Ebay. Often when I'm on Ebay, I'll just go for the 'Buy it now' option, as I can't be bothered waiting till the auction ends and then getting frustrated when I discover that I've been outbid by someone who bid 50p more than me! But if I'm selling, and I wait around and shop around until I find a bargain, and then sell it a profit, and then sell it at a markup, that might be a route to profitability.

One of the things that makes prices drift and steam on Betfair is the perception of scarcity, which makes people think 'I had better take this price now, or I'll miss the boat'. I wonder whether this principle can be used to good effect on Betfair. If you sell something that's not readily available elsewhere (such as a bundled package), and write compelling copy that gets people excited about it, perhaps you can get people bidding far more than the item's worth as they scramble to be the winning bidder.

Any thoughts?

Jeff

[Online Trader]

If you sell something that's not readily available elsewhere (such as a bundled package), and write compelling copy that gets people excited about it, perhaps you can get people bidding far more than the item's worth as they scramble to be the winning bidder.

What sort of thing are you thinking about, if you are thinking eBook type of thing don't bother you will not make any money.

Are you thinking of a specific market sector or are you just thinking out loud?

The secret is to think outside of the box and you are right to certain extent sell something that's not readily available elsewhere, it is finding that thing that is the Golden Egg and as the saying goes "if it was easy everybody would be doing it"

Generally speaking if it it is not available on eBay then it probably doesn't exist

We were the 1st company to import and sell "pink laptop cases" on eBay, this was back in 2006, we were selling them at £35.00 each plus postage, we had 18 months with zero competition and sold literally container loads of them.
Then the competition started to arrive and the prices started to erode, we sold all of our remaining stock and moved on.

You can buy a pink laptop case now on there for £10 with free postage!

[PeterLe]

Jeff
Using you analogy of Betfair v Ebay..The trick is to buy at the correct price.
7/8 Years ago, I tried a small venture on the side selling modern day furniture, Barcelona chairs etc. The idea was to use Ebay initially and then launch a web site afterwards.

To be competitive the key is to buy right (like all things). I found a company in China (via an import export company in the UK ) and bought a dozen samples (about £1500) and rented a half container via a shipping line.

My experience was that 90% of the items were very good (cheap with good margins), but on the other 10% there were flaws in the manufacturing and this eroded the profit. Its difficult to send things back to China!

I still think you could do something like this, but you would need a agent working on your behalf in China checking the items before dispatch.

I made a small amount from this exercise but decided that the effort wasn't reflected in the profits. I also think that the category I chose wasn't the best. ie if you were to choose something that was smaller in size, couldn't be damaged in transport etc etc

Good luck!
Regards
Peter

[steven1976]

Think about whether you want to make good margin on one sale or sell large quantities.
I dont have experience but Id imagine due to so much competition on there the really cheap stuff doesnt sell in large volumes. Therefore find something that if you sell 1 piece compared to 100 of the cheap one you still make the same amount of pounds.

If you are able to sell 1000s of pieces at cost and make 3 or 4 quid per piece on postage and packaging then thats another way to look at making money. I know from deals websites this works well. I think I once saw someone doing free or 1p jewelry on ebay. I dont know how they did but people like to think they got a bargain and then pay 4 quid on shipping a pair of ear rings that cost 50 p to get to the uk.

[hgodden]

Good point Steven but I think ebay have banned wildly inflating postage costs now to stop that kind of thing

[Iron]

Are you thinking of a specific market sector or are you just thinking out loud?

The latter, if I'm honest!

Perhaps a good route to go down is finding a product that excites people, as it might lead to irrational buying. An example. A friend of mine recently bought tickets to see the Stone Roses, even though they cost more than half of what he makes in a week! That's the kind of over-exuberance I want to tap into!

Jeff

[superfrank]

if you want a sustainable business, rather than a short-term punt, then you have to think of providing good value and service.

too many people are looking for easy money or trying to create "niche markets" - better to get into a larger market that already exists and try to take a small slice of it by competing imho.

[freddy]

Are you thinking of a specific market sector or are you just thinking out loud?

The latter, if I'm honest!

Perhaps a good route to go down is finding a product that excites people, as it might lead to irrational buying. An example. A friend of mine recently bought tickets to see the Stone Roses, even though they cost more than half of what he makes in a week! That's the kind of over-exuberance I want to tap into!

Jeff

I made a bit around xmas 2006 i think it was, buying up the newly released consoles like the wii, ps3 and 360 before they all sold out.

it was one of those rare situations that come up from time to time where there was virtually no risk,
worst case i had 20 xbox's and wii's that i would have to sell at cost price and break even.

It's always worth a punt on the next kids craze on the run up to xmas

[Iron]

Thanks for the advice guys.

Jeff