- Apr 16, 2018
The auction site eBay became popular way back in the mid-90s. It was an exciting time; the internet was still fresh, and new websites and online businesses were popping up. The infamous dot-com crash was still a few years away, and everyone wanted their slice of the digital pie. But when the market did crash, it took quite a few casualties with it. (Anybody remember pets.com and Webvan?)
Against all odds, eBay and other e-commerce sites like Amazon survived. We all know that Amazon has grown to become an online retail behemoth. (It must be good being Jeff Bezos) But what about eBay? While the auction site is still huge, its earnings the last couple of years have been fluctuating. With the influx of user-friendly e-commerce solutions such as Shopify, Magento, as well as Facebook’s pivot to e-commerce, eBay is no longer the default platform for sellers.
Which leads us to the questions: is eBay still a viable platform for small sellers in 2018?
I also need to qualify what I mean by “small sellers.” A small seller can be someone who occasionally sells stuff they’ve accumulated over the years (think online garage sale), or it could be someone who manages a modest inventory. I like buying and flipping old action figures, so I would fall into the latter category.
Anecdotally, I’ve seen lots of people close down their eBay shops. A close friend of mine used to make a killing selling old vinyl records on eBay. But he has since moved on to other selling platforms (Facebook, mostly) and even selling the old-fashioned way: in swap meets and conventions,
I asked my friend why he moved away from eBay (he still sells on eBay, but he says it’s just to keep his feedback fresh). The reason was simple: the associated costs were too high for him. The site takes a cut off the final selling price, and after PayPal fees (which eBay sellers always shoulders) there isn’t a whole lot of profit left. He considered jacking up his prices, but it’s a buyer’s market. It seems like a seller needs to shoot himself in the foot just to stay competitive.
My own eBay experience
That was my friend’s experience. I mentioned earlier that I am also an eBay seller. I say “am” not “was” because I think it’s still worthwhile selling there. My eBay earnings supplement my regular income, but I wouldn’t consider my eBay earnings disposable. On the contrary, I need those earnings. I roll the money back into my shop. The money is used for gas money going to yard sales, estate sales and, of course, buying stuff for resale. I also spend a lot of time cataloging, photographing, and promoting my inventory.
I’ve poured a lot of money and effort into my eBay store, and I definitely think it’s still worth it. You just have to be extra smart and try to maximize your earnings.
Good news: selling fees on eBay are now lower
The reduced fee is one of the bigger factors that encourages me to hang on to my eBay account. The auction site reduced its fees in 2013, which coincidentally was a year after my record-selling friend quit the eBay game. I’m sure my friend wasn’t the only one who quit. The mass exodus of sellers to places like Facebook and Amazon Marketplace probably forced eBay to evaluate the fees it charges sellers. So in 2013, it lowered fees in a bid to attract sellers and score some goodwill points from the community.
A realistic picture
The auction site is a business, and like any business, there are pros and cons to it. I’ve stuck it out with eBay, but I need to give you a realistic picture. So here’s a list of good and challenging (I don’t want to use the word “bad”) things about eBay; I hope you can use these to manage your own expectations and create a lucrative eBay shop in 2018!
First, the Good. After all these years, eBay is still totally legit and has a robust set of features, as well as a thriving, supportive community.
No advanced technical skills required
Other e-commerce sites like Shopify are simple to use, but they would still require a bit of coding (or at least Content Management System) skills. Ebay is super-easy to use. There are a lot of features and options to check out, but anyone can have an auction up and running literally minutes after registering.
You’re exposed to a huge market
Ebay used to be the default destination for people looking for a bargain, and it still sort of is. I can vouch that there are still tons of potential buyers on eBay. And tons of potential buyers mean tons of potential sales!
One of the best thing about eBay buyers is that they are comprised of extremely wide demographics. I sell vintage action figures, which is pretty niche. Still, I’ve found buyers who are just as obsessed with them as I am (probably more so). Best of all, they were willing to pay fair market price for the stuff I was selling. And this leads me to the next item…
People are willing to pay top dollar
The misconception about eBay buyers is that they’re all looking for a bargain. While this could be true - who doesn’t want a bargain? - many bidders know the value of what you’re selling. We sometimes forget that this is an auction site. And that means bidders and are willing to duke it out with other bidders.
Of course, you need to sell stuff that’s actually worth bidding for. I doubt anyone will bid on an old, stinky pair of sneakers.
Low-risk and overhead, high-reward
Setting up a business the traditional way can be a daunting, and expensive, task. EBay greatly lowers that barrier of entry. Anyone with a decent inventory and some basic business and customer service skills can set up a thriving shop on eBay.
Also, eBay gets a cut off completed sales and auctions. If you don’t sell anything, you don’t have to pay anything to eBay. That’s a pretty sweet set-up because it gives you room to experiment with different products and see what the market responds to.
That was the Good; time to cover the flipside. (I’ll try to make sure this doesn’t discourage you too much)
Huge market = huge competition
A few years ago, I had this idea to sell vintage action figures on eBay. Superhero movies had gotten big, and geek culture had gone mainstream. It looked like I had the perfect opportunity to cash-in on the interest and nostalgia associated with these properties.
I scoured garage sales and checked the local classifieds. I dug through literally thousands of chaff hoping to find a few valuable toys I could resell. A few months later, I had amassed what I thought was a decent inventory.
So I registered on eBay, confident that I had found my niche… only to learn that hundreds, if not thousands, of other sellers were also selling vintage action figures.
I was disheartened at first, but I thought about it this way: at least I had a good overview of the market. I spent countless hours studying other sellers, what they sell, and how much. Think of it as informal market and competitor research.
With a good overview, I was able to calibrate my selling strategy and build a modest but dedicated, repeat customers.
Find your niche
There’s a big chance that your unique idea isn’t so unique. I’m not trying to discourage you; I’m just trying to keep it real. Take my idea, for example. It turned out many people were thinking the exact same thing.
Here’s a little secret: when you think you found your niche, look at what other people are doing and see how you can improve their formula. The new, improved idea will now be your TRUE niche. Then get out there and kick ass!
Popular items net lower profits
When the first Iron Man movie dropped, I knew there was going to be huge a demand for toys based on the character. While those toys were sure to sell, many other sellers are trying to get in on the action. And since Iron Man was a popular character, I couldn’t sell him as a rare or collectible item.
That meant I had to compete based on price. I lowered my prices as much as I could, sometimes even barely making a profit. The good news is I sold TONS of these. So the profit per unit was low, I got by on the number of units moved.
Sales from these, in turn, supported my more niche auctions. Profit on those are higher, but it could sometimes take months to find the right buyer.
The Verdict: Worth it or Not Worth it?
Just remember that eBay has its good and challenging sides. Play your cards right, find your niche market, and keep hustling! If you've decided to dive into eBay and would like more information about how to find the right products (along with tonnes of other tips on how to make money from eBay), check out this ebook: Auction Arbitrage
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That was my eBay experience. How about you guys? Have you stuck with it in 2018? I want to hear why you stuck with it, and how you stayed profitable.
Let’s hear your stories!