Mining For Gold On E-Bay

Finding gold during the gold rush often depended on finding the right location.  Location on the internet is directly related to traffic.  If you think of the internet as a very busy freeway with millions of cars driving at very rapid speeds you can gain an appreciation for why it might be difficult to catch their attention.

Before you can be successful you have to find out where a large number of those cars are stopping.   You can’t get their attention if they never stop and pay attention to you. If you have ever shopped on E-Bay then you know that millions of those cars are slowing down or stopping for a specific reason.     Which is why selling on E-Bay is a good way to mine for gold.

If you have something people want and they are stopping at E-Bay to look for it you have already solved one of the main challenges with succeeding on the internet.

There are lots of people making money on E-Bay. And, to be honest, there are probably lots of people who are not. You don’t have to be one of those who don’t. Just follow these simple rules for E-Bay and you can make money.

The Basics

Sign up for an E-Bay Account 

Sign up for a PayPal Merchant Account – unless you already have a merchant account and can accept credit and debit cards. You may still want to consider signing up for a PayPal account anyway because PayPal offers you a way to set up a check out process online that you can integrate into an online store.  There are other options besides PayPal if you are interested in those they include Square and Intuit.  Paypal is one of the oldest online methods for sending and receiving money online as well as accepting credit or debit cards without setting up a commercial business account with your bank.

Find items to sell on E-Bay

Some experts will tell you to do a search and find the top selling products on E-Bay. This is a great idea if you can compete with everybody else who is doing this. For example, the #2 item being searched for on E-Bay on February 8th 2011 was the Xbox 360.

If you want to sell Xbox 360’s on E-Bay you need to find a steady supply of them that you can make a profit on. One way you might do this is to take a class on repairing Xbox 360’s. Buy broken Xbox’s for pennies on the dollar and repair them. Resell the “re-manufactured” Xboxes. Or find a place that will repair them for you at volume prices. Unless you can find a steady supply of discounted Xbox 360’s then you don’t want to try to beat the big dogs in this market. Other best selling items include game systems, clothing and designer items like coach bags. These are all very competitive markets and can be difficult to compete in. If you can find a good source of these items at the right price it can be very profitable.

The best way to make money on E-Bay is to find products that sell reasonably well that you can supply on a consistent basis or that are not commonly available. Repair manuals for older cars, trucks and motorcycles often sell extremely well on E-Bay. The reason is that many people own classic vehicles and keep them in good repair. Fortunately for you repair manual publishers aren’t interested in printing repair manuals that will only sell 50 to 100 copies. You can find repair manuals like these at flea markets, yard sales, estate sales, and thrift stores.

Don’t let any resource go untapped when you are looking for merchandise to sell online or offline. Craigslist or other local classified ads, flea markets, yard or garage sales, estate sales, storage unit sales, thrift stores, and local auction businesses are all great sources of items. Going out of business sales for local businesses are a great way to pick up items cheap and resell them. Local liquidators might be a source too. Be sure they are an actual liquidator and not a low-cost department store masquerading as a liquidator.

Gold Nugget:  One very successful method of sourcing products for resale is called Retail Arbitrage.   For example, you find a hot toy selling for $10 at a local retailer.  That same toy on E-Bay is selling for an average price of $20.  Even after expenses it’s possible to make a 30-40% profit.

Choose A Niche

Don’t try to sell to everyone on E-Bay. Identify a market or niche that you can do well in and then focus on that. Some people do very well selling antiques. Others specialize in books.  Do an inventory of what you know about. If you know all about stamp collecting then you should seriously consider buying and selling stamps. Don’t be afraid to learn about a particular area though. Other items that sell well are cell phones, cameras, small appliances, computers and computer accessories, and old books.

When you are just getting started it’s a good idea to go through your garage, attic or closets and sell off your stuff that you aren’t using anyway. This will give you valuable experience on learning to navigate E-Bay and won’t cost you anything except the fees. You will even make a few dollars while you are at it.

Get an Employer Identification Number (IRS)

One thing you need to do quickly is get an EIN or Employer Identification Number from the IRS and establish yourself as a small business with your local and state business agency. You can buy items for resale and at wholesale from other businesses and not have to pay individual sales tax.  You only pay sales tax on the item after you sell it to someone.  And you can have E-Bay collect the sales tax for you.  Having EIN is an advantage because many businesses that specialize in selling wholesale will not resell to private individuals who don’t have an EIN. The IRS will even help you get an EIN

Once you have started making a little money from your E-Bay sales you can consider opening an E-Bay storefront and setting up a website that sells your items separately from E-Bay.

One thing that is very important, no matter which platform you sell on, is the relationships you establish with people.  If you sell on E-Bay it can be challenging establishing a relationship with the buyers of your products. If you violate their Terms Of Service they might close your account.  You can still reach out to people and create relationships.  You just have to follow the rules and do it right.

There is a great book called The Silent Sales Machine by Jim Cockrum that sells for $5 on Amazon that can help you learn the tricks of selling on E-Bay and other platforms.  It will also give you some great ideas for how to build those relationships.

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