November 18, 2016
Why you should, and shouldn't sell on eBay
eBay is a lot of fun. Some people get rich selling stuff there, some people lose money. Whether you want to jump in to sell thing depends on what you know about the process of selling mail order.
Yes, I said mail order. Because as "high tech" as eBay may seem, it's based on a very old model - selling stuff through the mail. And for people who understand this business model, selling on eBay, like any other mail order business, can be very lucrative.
If you already know this, I apologize, but I'm gonna start with the basics from your Business 101 class - starting with The Cost of Doing Business. This is where a business starts. It's all of the costs that a business owner has to pay for themselves before they can even begin to present stuff for sale. That includes inventory, boxes, tape, the computer you use to be on eBay, well, just everything that you have to have to run a mail order business. For many people, the cost of business includes stuff that they already have, like electricity to their home, a computer, a camera, that sort of thing.
Then there's shipping. There's a whole world of information about shipping out there, United States Post Office, UPS, etc. etc. And if you don't think about how your item is going to be shipped, and the cost, you could end up paying more for shipping than your item is worth. There are a lot of people who make a net loss after they've paid the Cost of Doing Business and Shipping. Of course you can pass the shipping costs on to your customer, but people hate that. And since customers know exactly what it costs to ship, if you charge them even pennies above that you are considered to be ripping them off. Don't do that.
Now let's go back to your Economics 101 class and talk about Alternate Cost. That's the value of your time. The time you spend packing boxes, taping, addressing, standing in line at the Post Office. If you consider your time to be worthless, then you have an alternate cost of zero. If your time is worth anything at all, you have to consider it. Spending two hours on something that earns you a profit of fifty cents means that you don't value your time very much. Would you accept a job that paid 25 cents an hour?
I started selling on eBay many years ago. I really didn't have much to sell, but I wanted to understand the process. It was as if there was a big party going on, and I wanted to wander over there and see what the fuss was all about. I started by buying some small stuff, and talking to my friends who sold on eBay. Then I sold a few things. I had a lot of fun with it, taking photos and writing descriptions. I learned more about shipping than I ever wanted to learn. Believe me, shipping is a subject that gets people going - mention it to someone who knows a lot about it, and you'll get an earful!
As a Graphic Designer, I started out with catalog design. My first clients, back in the 1980s, were selling stuff mail order. And I learned a lot, mostly that it's a lot of work, but it opens up your potential customer base to the world. All it takes is some good photos, descriptions, and a mailing address. If it sounds good to you, go for it. The only way you'll really understand it is to do it.
Posted by Brad Hall