Pros and Cons of Selling on E-Bay

Alright you have some things at home you want to sell online, and than you'll take the profit from that, go to a thrift store buy as much as you can and sell that online, rinse and repeat until you start making a decent profit as an online reseller.

Great, this has potential to make money and can even become an at home career if you're good enough. Now the question is what is the best way to sell online? Today let's look at selling on E-Bay.

Advantages of Selling on E-Bay

The biggest advantage is the sheer size of E-Bay.

When people think of bidding sites, E-Bay is always at the top of the list. So, you don't have to do as much self marketing to find customers. You can't ignore marketing completely, but you don't have to first get a customer to visit your website, then check out your products, then decide if the price is right, then decide if you're trustworthy, and finally buy it, they're already there, and your rating will show if your trustworthy. All you have to do is make your presentation look good.

This advantage will let you focus more of your attention on copy writing, developing nice photo's, customer service, and a bit of SEO. These may seem minor, but a good description and professional looking photo's can mean the difference between making a profit and wasting your time.

The size of E-Bay also means you can sell virtually anything, so use that to your advantage.

Customer List

The other nice thing is creating a customer list. When you make a sale, you learn the customers name and email. Keep a list of all your customers, especially repeat customers, include what they have bought, if you later sell something related to it send an email letting them know you have something for sale they may be interested in.

For example, if someone bought a set of old china, and a month later you have some fancy wine glasses for sale, send an email letting them know.

This type of marketing works best if you have an actual E-Bay store and sell a particular niche, but even if you just have random auctions it can help bring in customers.

Little Initial Investment

When you want to start selling on E-Bay, you can sign up and start selling for free. You get to sell up to 50 items for free per month, before you start having to pay an insertion fee. You will have to pay a 10% final value fee if the item sells, but if it doesn't sell, you're in the clear. So until you get your feet under you, you can list and sell items at no cost to yourself.

Problems With E-Bay

The main cause for complaint against E-Bay are the fee's.

Once you've used up your 50 monthly listings, you have to pay a fee for every item, whether it sells or not, depending on the item this is 10 to 30 cents. Add in the final value fee of 10% of the price, up to a max of $250, and several voluntary services that can improve your ability to sell an item, and you could risk losing money on low profit items.

Forced to Use Paypal

This is the second biggest problem with E-Bay and it actually relates to the fee's. Due to the partnership of E-Bay and Paypal, to get your money from E-Bay you have to use Paypal, and there is a charge for transferring money over, and then shifting it to your bank account.

So, it's best to only transfer your money in a lump sum to keep the fee's as limited as possible, which can be annoying if you only do limited or low priced selling on E-Bay.

Detailed Sellers Rating

The better your DSR the better your ranking, the better your ranking the more sales you'll make. This system is great for buyers, as they can see right away if the seller is trustworthy. However, if you get a bad review due to a lying customer, or because the mail lost your item, this review system can bite you in the butt hard. Fixing it can also cause you many headaches and frustration.

You have to be very customer oriented or risk getting hurt.

New Regulations

Fairly regularly, E-Bay will change their various rules and regulations. So what you used to do to attract customers will now get cost extra money, get you fined or shut down your account.

If you're just starting, this isn't a big problem, as you'll have to learn the rules anyway. But once you've been doing it for a while you have to realize that missing one rules update could cost you. So you have to be very careful about keeping up to date on everything.

Good Potential to Just Break Even

If you want to be a professional seller, this is a serious concern. With the above mentioned fee's, and necessity to spend a lot of time and effort on customer care (free shipping for best results, a detailed return policy, etc), you could find yourself making as little as 5% profit when selling your product if you're lucky.

This is why you need to keep careful track of your sales. In the first month, see what sells best, what gives you the most profit, and what your customers are saying. Drop whatever is making too little, and tweak the rest to improve your profit margin. This requires a lot of time and effort, which has to be be done if you want to succeed. However once you have a system in place you can begin to relax a little.

Generally with most products I think E-Bay has great potential for online sellers to make money. But you can't simply list an item and expect to make money. You have to go in with a plan, an understanding of the various fee's and rules, and learn what the customers want and need.