How to Make Selling on eBay into a Business

I have been a member of eBay since January of 2003, I signed up in order to sell some bobble head dolls I had received as part of a promotion at a football game.  My initial thoughts were that if I sold the bobble head dolls for enough, then I might be able to pay for my tickets to the game.  I was able to sell the two my wife and I received, along with another bobble head that someone left behind.   After paying all the fees, shipping, and tickets to the game, we had a profit after selling only two of the three bobble head dolls.

Selling on eBay can seem like a daunting task to some, but for the most part it’s pretty simple, and there isn’t a wrong way to do it (unless you lose money), and the main thing is to have fun.  There are several things you have to do before you start selling on eBay.  Here are your first steps to selling on eBay:

Getting Started Selling on eBay:

1. First things first, you must sign up for an eBay account.  You can register for a FREE eBay account by simply following the steps and creating a user-name.  This account allows you to buy and sell your products on eBay.
2. You must determine how you are going to take payments. There are several payment options that eBay allows, you can choose several different options, however, PayPal is considered the safest and easiest method to send and receive money on eBay.  PayPal can do a lot more than just sending and receiving payments however, we will get to that in a minute.  First you should go ahead and register for a FREE PayPal account.  There are three different account types, Personal, Premiere, and Business.  If you are just signing up as an individual who wants to buy and sell, you will want to sign up for a Premiere account. Once you have registered your going to want to take a minute to get PayPal Verified.
3. Next you will need to know how you are going to ship your products. There are three main companies to use for shipping.  You could use the United States Post Office (or USPS for short), United Parcel Service (or UPS for short), or FedEx.  I would recommend getting familiar with their shipping and handling rates.  Each company has it’s own positives and negatives.  The more you know about each company the more money you could potentially save.  Once you get into a regular habit of shipping items you will probably figure out which method is best for you.  I personally use USPS most of the time, for my products, Priority Mail is hard to beat.  It ships the fastest and cheapest most of the time.  Plus USPS will give you free Priority Mail envelopes and boxes.  You can even order them from their website and they will drop them off at your door for FREE!  This will save you tons of time at the post office.  USPS also will schedule pick-ups free right from your house.  Using USPS might be a great place to start for your shipping needs.
4. Selling on eBay isn’t free, figuring out how much eBay fees are will save you money in the long run.  Not knowing what the eBay fees are can quickly cut into your profits.   Understanding how eBay charges can help determine your pricing structure.  For instance, you don’t want to list something in an Auction Style Listing with a price of $200.00.  The insertion fee goes from $2 to $3 for items listed over $199.99.  If you listed a hundred or more listings this tip could save you over a $100 in fee’s alone.
5. Know the rules, play by the rules. Getting  to know all of the eBay Seller Policies and PayPal Buyer and Seller Policies will take a little bit of time, but DON’T skip it.  There are several reasons for this, in the case of a dispute, you will be prepared and protected from buyers filing false claims.  For instance, if your auction sells for over $250 PayPal requires the seller to get signature confirmation for delivery.  Without purchasing this option you could lose the dispute.  Knowing this allows you to adjust your shipping and handling fee’s if necessary and makes sure you aren’t the victim of fraud.

Once you have signed up for your eBay and PayPal accounts, read all the policies and procedures, know what shipping methods you want to use, now all you need to know is what your going to sell.  More importantly, how much are you going to make.  But first we need a little information.  Here are a few tips to know before you list your item for sale on eBay.

Knowing What and How to List Your Items on eBay:

1. Sell what your interested in, in the long term this will help you to become successful on eBay. Think about what your hobbies are and then make those items your primary items to sell – this is of course if it can make money!  If you are into computers or electronics find a way to buy these cheap and turn them over for a profit.  There are many ways to find items to sell, you can start by selling your own items or some of your friends items (this is a great way to build up your feedback), buy items using Craigslist (you can read my article on Buying and Selling on Craigslist) or you can find a drop shipper to purchase products from.
2. Research, Research, Research! Knowing what your product is worth is vastly important.  There is an old saying in real estate that goes something like this, ‘You make money when you buy…’ This is true when buying and re-selling on eBay.  If you buy to high your profit margins evaporate.  Know what your items are worth and make sure there is money to be made, after you include all your fees.
3. Create your own set of policies for people who bid on your auctions. Write your expectations for buyers.  Will you offer refunds on your items?  Will you offer or require insurance, signature confirmation, or express shipping?  Will you offer multiple item shipping discounts, or limit who can bid on auctions based on feedback?  These are all things you should consider before setting up your first auction.
4. Know when to list your auction.  Depending on the type of auction that you use (auction style or Buy it Now) you may want to list your items at different times so that they end at the correct time.  If you want your auction item to receive the most possible traffic, you are going to want to have you listing expire during a time where all time zones in the US have had a chance to view your auction.  Most people recommend ending your auctions on Sunday nights between 6PM and 12AM Pacific Time.  However, I would highly recommend that you experiment for yourself and find what works best for you.
5. Using eBay tools or third party services can increase your profits and make you more efficient. Using a template or theme for your auction can give your auction a more professional appearance.  A drop shipper can get you access to large amounts of product, you can use the eBay Turbo Seller to list multiple items at once, or tools such as Auctivia, Square Trade, or Auction Snipers (for buyers).  There are many extensions available for buyers or sellers that fit right into your Internet browsers, including the FireFox eBay Companion , the Chrome eBay Extension, or the Internet Explorer eBay Side Bar.  There are many, many more eBay tools out there for sellers.  A simple Google search will provide dozens more.

Creating a Top Notch eBay Listing

1. Create a winning title for your listing.  When you are listing an item, you should think of every word in the title of your auction as a keyword, just as you think of keyword in Google searches.  The more relevant keywords you use, the better chance you have of your auction item showing up in a potential buyers search list.
2. Using photos in your eBay listing.  Using photos can be a very important part of your auction.  Whenever possible use authentic pictures and not just stock photos.   Showing detailed photos with defects of your items will establish trust with your buyers.   Buyers want to see the condition of the item they are purchasing if you use stock photos it can appear as though the seller is trying to hide something.  In some auctions it will be worth paying the additional eBay fees to include multiple photos in your auction.
3. The difference between Buy it Now and Auction Style Listings. There are several different types of auctions that eBay allows.  The first, and most common, is the auction type listing.  Auction style listing start at a specified price and are bid up until time runs out and the highest bidder wins.  You can also choose how long to list your item for up to ten days.  You can choose to put a reserve on the item or not, which protects you in case your auction doesn’t sell for as much as you want it to.  Or, you can choose to use a Buy it Now auction.  This type of auction allows you to determine a set price for your item.  If a buyer uses Buy it Now then the buyer pays the full amount at the time that they choose Buy it Now.  The main benefit is that you don’t have to wait for the entire duration of your auction until you sell your item.  The downside is that you could be leaving money on the table if you don’t set your Buy it Now price high enough.  You can also choose to include a Best Offer with a Buy it Now auction.  This allows potential buyers to submit an offer less than your Buy it Now price.  This can come in really handy if you have priced your item to high.  For a more in-depth review you can read an eBay review and guide written by a member of the eBay Community.
4. Communicating with potential buyers. Communication is one of the most fundamental elements of any successful business.  If you want repeat business and positive feedback then you need to make sure you are clear, concise, and accurate with your auctions.  When someone asks you a question it’s important to reply fast and thoroughly.  In addition, you can incorporate Skype into your eBay listings.  This gives you the ability to to communicate with buyers immediately if you are online, without giving out your real phone number.
5. What to include in your auction.  There are many things you should incorporate into your auction, and you should always be as thorough  as possible.  Things to include in your auctions should be (if relevant) the quantity of items included in your auction, what it comes with, technical details or specifications, links to manufacturers or retail sites, reviews of your product, etc.  You can also set up your eBay account preferences to show your eBay auctions in Facebook by using this eBay Facebook Application.

Finalizing the Sale of your eBay Auction

1. Packing your item to ship. It’s important to make sure you pack your items carefully.  Make sure you pack your items accordingly, this means if it’s electronics then pack it in bubble wrap or something similar.
2. Ship your item intermediately. Buyers like getting their items fast.  When you meet or exceed buyers expectations you are more likely to get good feedback.  Since everything on eBay revolves around getting positive feedback, you should do everything in your power to ensure that every transaction goes smoothly.  The best way to do this is to ship it fast.
3. Include a personalized note for your buyer. This is one way you can increase buyer satisfaction.  It shows that you care and that you took the time to write something specifically for them.
4. Leave feedback for your buyer. I mentioned earlier that eBay revolves around buyer and seller feedback, so it’s important to leave accurate information.  However, as a seller I would precaution you to not leave feedback until after the buyer does.  Once you ship an item and the buyer receives the item it will usually take them a few days to leave feedback.  Once the buyer leaves feedback then it’s your turn.  However if you do this out of order and leave positive feedback just because a buyer bought something, the buyer could turn around and give you negative feedback and you won’t have the opportunity to leave accurate feedback for them.
5. Set up a spread sheet to keep track of your expenses for your eBay business. After selling nearly fifty items in just a few months I learned how important it was to know what items I had been selling and how much they were selling for.  In addition, I started tracking were I was buying my product from (Craigslist, friends, eBay, other classifieds, etc), this allowed me to make my business much more efficient and to know where all my money was going (read: eBay, PayPal, and shipping fees).

Final Thoughts

There are many, many ways to make money on eBay.  I have only briefly touched the surface of what is possible.  It’s true that knowledge is power and that they more time and effort you put into learning about your new eBay business, the more money you can make.  What works for one person doesn’t necessarily work for another person.  You will learn the most through trial and error.

For those of you who have made money on eBay, what works for you?  Where do you buy product, how do you ship, what tools do you use, and what has failed?

Related posts:

1. 10 Tips for Buying and Selling on Craigslist