Poor Man Survival
Self Reliance
tools for independent minded people…
ISSN 2161-5543
A
Digest of Urban Survival Resources
Is an Online Business Right for You?
The retail industry is going through the worst wave of
store closings in modern American history with nearly 3,000 stores
reportedly projected to be closing in 2017 due to the cost of developing prime
retail space [think cost of government red tape] and pension funds are melting
down all over the nation-so
is it finally time to consider an online business? If you are, keep in mind, so are many other
people and that competition keeps profit margins tight and finding profitable
niches even tighter…but there it hope.
Starting
a part-time eBay business had been a great thing in the mid 1990s and early
2000s when my wife and I averaged $2500 per month net profit. This was on top of the money we earned from
our antique shop and infrequent live auction and estate sale that we conducted
in Arizona…then the market for antiques and antiquarian books dried up when the
economy tanked.
However,
despite the fact that our economy has never really returned, the great thing
about it to me was that I could essentially turn it on or off when I felt like
it. Also, I’ve continually experimented
with other online selling venues as well. If I needed some extra income for a vacation I
was saving for I could sell some stuff for a month or so and then when the
vacation rolled around I could temporarily shut it down just by not listing any
items.
It
is this freedom that makes it a lot more enticing than the traditional
“brick-and-mortar” businesses. When a heart attack put me in a recuperative
mode for several months, I watched as the economy continued to tank under
President Obama’s over regulated policies and as other Americans started
selling online [out of necessity] to supplement their income. Nonetheless, online selling still provided
some much needed revenue to our pinched household because as we discovered, if
you don’t have a gaggle of kids, it is rare to obtain any kind of government
assistance.
1. Starting
the Ebay biz
As
I mentioned in an article I wrote called 7 steps to selling on Ebay for
beginners I started by
selling junk around my house. This is the best way to get your feet wet with
Ebay. Actually, I take that back. The best way to get your feet wet is to
purchase a few items on Ebay
. This will benefit
you in two ways:
1.
It will help you to understand the Ebay community a bit better
than you will if you just start selling. It is not the “virtual garage sale” that it once was and
it is a rare case when you can imagine something that hasn’t been sold on Ebay.
2.
I
mentioned that Ebay is a community. This is not a cause for worry, but you do
need to be aware that since it is still lightly based on an “honor system”, you
need to prove yourself. Buying a few items and
proving that you are an upstanding member who pays for items will help you out
when you start selling.
2. Picking a
product to sell on Ebay
It
may sound easy or difficult. It is some of both actually. I set out to
supplement my current income, not necessarily to generate a full time income
from it. Because of this I was able to take more of a chance by NOT picking the
right product. I felt comfortable that if I jumped into an over-saturated
market I could jump ship and try a new product.
I
wanted to find something that I at least knew something about, since in my
previous experiences of selling some of my wife’s clothes made me very aware
that I know nothing about women’s clothes. I would get questions from buyers
asking me how many inches it was from this to that. I didn’t even know what
areas they wanted measured, let alone know how to measure them. Do yourself a favor and know at least a
little bit about what you are planning on selling.
I
finally found a product that was related to something that I knew a decent amount
about, since it was a hobby of mine. [We’re always looking for niches, however,
each time we find a profitable one, every other marketer seems to copy us and
the market becomes crowded and profit margins get squeezed. For years I made a very healthy living
selling antiquarian books and how-to books which I often found at thrift
stores. Now, they are virtually
impossible to find as Goodwill and others have bypassed their retail customers
and now sell direct online –effectively screwing those, like me, who have
previously donated to them!]
3. Finding a
supplier
Google
“(Your product) + wholesale” and combinations similar to find a supplier who
will sell to you at wholesale prices. I know some people run small ebay
businesses by finding clearance items at retail stores and reselling them on
Ebay, but your profit margins will probably be smaller than if you bought them
wholesale.
Most
suppliers are going to want to make sure you are legitimately interested in
becoming a dealer for their products, rather than just trying to get a deal for
yourself. This process is probably going to be slightly different for different
products. For me, I found some suppliers on Google and I asked a friend who he
used.
Once
you have an account with the supplier you should ask for a catalog and a
pricing guide. If they have a website for dealers available, that will work as
well.
The better
option
I
never did this because I wanted to start out the simple way, but thinking long
term with this, you will probably want to turn your biz into a drop-ship business (where the supplier sends the
product directly to the customer for you, without you ever touching the actual
product).
Since
I was only doing an experiment, I was okay having 8 products in my living room,
but if I had turned this into a real business it wouldn’t have been cool having
my living room and garage overflowing with products. This is why
drop-shipping has become so popular. Your profit margins will be a little
smaller, but you don’t have to deal with inventory, shipping, or a variety of
other things.
So
just keep that in mind and the biggest dropper-shipper I’ve found is
called Doba and they have millions of products
available to dropship.
4. Testing
your Ebay market
Once
I got a price guide from the supplier I was then able to see exactly what my
purchasing price would be for the items that I would be selling. This is a very
important number to get, because without it you won’t be able to test the
profitability of the item.
Once
I knew the price I would be paying for my items, I went on over to Ebay and did
a search for each item. As you can see in the image below there is an “advanced
search” link next to the search box. You can type your product in the field and
hit the advanced search link.
Start
by checking the ‘Sold Listings‘
box and this will show you all the items that match your search terms that have
actually sold and the prices they went for. After that, I would check the ‘Completed Listings’ box. You
will now probably see some listings that were completed without selling and
some that did sell (green ones sold, red ones did not).
Ideally,
each listing of your product would show as sold, but realistically I wouldn’t
expect that. But skim through and get a feel for how many weren’t selling and
see if you can figure out why. Were they all priced too high, or are
there just way too many people selling that product? Hopefully, there is
a good variation between what the items are selling for and what you can
purchase them for. Even if there is, don’t get too excited yet, because there
are still lots of other expenses to account for.
Knowing
what the items sold for is going to be very helpful in deciding if you should
move forward with the product you have in mind. But even if it looks good, keep
in mind that you still don’t know how many times the seller had to list the
item to get it to sell. Currently Ebay allows you to relist one time for free,
but if the item doesn’t sell again then you need to pay them another listing
fee to list the 3rd time.
The easier
option to test your Ebay market
What
I just showed you is what I did because I didn’t really know there was another
option. But there is and it is easier and will provide much more information
for you. Terapeak is a website that makes it
easy to get tons of great market research info for Ebay. They do charge
for it, but they have an all-access free 7-day trial. If you are serious about
finding a great product to sell, I would check them out.
5.
Estimating other expenses
Now
that I had gotten some solid numbers about what my item had been sold for in
the past I had a starting point. From here I tried to get a best guess estimate
(or exact if possible) of how much other expenses would be. These were a few
other expenses that I had…
·
Shipping
and handling from my supplier to me
·
Shipping
and handling from me to my buyers
·
Boxes
and packing material (styrofoam peanuts, tape, etc.). I bought in bulk from uline.com and got an average cost of about $1 per
item.
·
Gas
and wear and tear on my car from driving to the post office or bank. The post
office is very close to my house, so this wasn’t very much for me.
After
adding up all these expenses I still saw that I would likely be able to make a
decent profit assuming that I would be able to sell each item within a couple
weeks. If I would have had to relist each item 10 times to sell it, the Ebay
fees would have eaten up most of my profits.
I
was estimating that I could make about $20-$50 for each of the products I was
going to sell. This was good enough for me, so I decided to move forward with
it.
6. Buying
the products
This
was actually the easiest part for me. I decided just to sell the exact products
that I had seen sold in my research. I figured if someone bought it before,
they would buy it again (This was not necessarily true – I will explain later).
I then just called my supplier and gave them my order. Two days later the
shipment had arrived.
7. The photo
shoot
I
could only find one picture of each of my items on the supplier’s website.
Knowing how important pictures are to Ebay buyers I decided I was going to take
the most detailed and best pictures I could with the tools I had to work with.
1.
I
borrowed the best digital camera I could find from a family member.
2.
I
found the cleanest and nicest looking background I could to shoot against.
3.
I
grabbed about 5 bright lamps from around my house and placed them to get good
lighting.
4.
I
took about 10 pictures of each item. Some full shots and some detailed
pictures.
I
spent a good deal of time on this process knowing that it was work that would
increase my chances of sales. But, the other motivation for investing a lot of
time was that if I did it well the first time, I wouldn’t have to do it again
later. Once I had good pictures for the items, I could always use the same
pictures when I sold more later on.
8. Listing
the items on Ebay
If
you are looking to do this as a full time or even a part time gig, you may want
to use a listing tool. I used Auctiva which I was pleased with. Just
getting started it may be better just to manually list them with Ebay to get
the hang of it, but as you progress always be looking for tools to simplify and
speed up the process.
I
knew that my items didn’t have a huge demand so I listed them all only with a
BIN (Buy It Now) price. If I would have been selling iPods or something I may
have been able to get away with a straight auction, but since I was willing to
wait to make the sale at the price I wanted, I did BIN.
9. Analyze
the results
My
test run of selling 6 different items went pretty well. I listed all of them
BIN as mentioned before. One item sold in the first listing and three more sold
in the relisting. The remaining two items had to be relisted again (incurring
another ebay listing fee) and one sold very quickly. The last item taught me a
good lesson that I mentioned I would get to earlier.
I
had assumed that if someone had bought it before, they would buy it again. This
did not appear to be the case with this item. I should have used a bit of
common sense, it was a very specific and random thing that not many people
would have wanted. It just so happened that it was one of the recently sold
items that I saw. I ended up just listing it again as a straight auction with
my starting price being my cost. It did quickly sell and actually fetched a
decent price.
Selling
quicker for more profits
I
chose to take my time selling these items because I wanted to see if I could
get the prices I was asking for each of them. I could have lowered my prices
and probably sold them all in the first listing, but that wasn’t my goal for
this test.
What
was exciting to me was to see that by selling just three products I could make
$100. So, in theory if I could sell 30 products in a month, I was looking at
$1,000. That’s not a bad part-time income! And if I were to start buying
products from Doba as a dropshipper it would take
a whole lot less time each month as well.
Final
thoughts about starting an Ebay business
There
is really a lot to learn and as you sell more you figure out more and better
ways to minimize expenses. I have learned a lot from selling on ebay, but there
is still a lot more to learn. Just don’t be intimidated or afraid to try it out
if it is something you are interested in doing.
There
are other online selling venues such as Bonanza [which I use with modest
success] and facebook [which for most sellers I know, rank near the bottom,
unless you are willing to pay for their substantial ad costs…
Yours for
better living,
Bruce, the Poor Man
A Final Note…
You Have a
16-Cylinder Brain-Learn How to Use It and Reawaken the Genius Inside You!
Additional
Resources
Starting an Internet Reselling Business to Raise Cash
Multiple
Income Streams
Many people are realizing they aren't guaranteed the luxury of a lifetime job anymore so why rely on one stream of income? Now is the time to consider the possibilities of creating multiple income streams.
Many people are realizing they aren't guaranteed the luxury of a lifetime job anymore so why rely on one stream of income? Now is the time to consider the possibilities of creating multiple income streams.
How to Get The Most When You're
Selling Online
10 Tools for a Succesful Online Sale
Becoming an ebay Power Seller
10 Tools for a Succesful Online Sale
Becoming an ebay Power Seller
In the age of
digital-everything, there are many new business opportunities, and nearly
everyone with the desire can go into business for themselves.
Escaping the Rat Race with Your Own Business-CD ROM
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A Smoking Frog Feature, Shallow Planet Production
2 comments:
So many options and given the continuing uncertain economy, it's always wise to have a Plan B!
Great roundup of resources for us who have never tried this before and you're right, it is getting harder to make a buck in this country.
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