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Written by Stephanie Chandler
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Page 1 of 2  | | business start-up |
Launch or Expand a Business by Following a Few Easy Steps
There is no better place to access an audience of potential buyers than on eBay, the world’s largest online auction marketplace. With more than 56 million active users, the earnings potential on eBay is abundant. Whether you want to start a new business or expand your existing business, it’s easier than ever to get started.
How It Works
eBay began as a forum for buying and selling collectible items and has morphed into a mammoth online marketplace where millions of items are listed for sale each day. There are dozens of merchandise categories ranging from books, household goods and antiques, to jewelry, concert tickets, computers and cars.
The community is built on trust as demonstrated through a feedback rating system. After each completed transaction, the buyer can post a rating for the seller of “positive,” “neutral,” or “negative,” along with a brief comment about the quality of the overall transaction. Conversely, the seller can post the same type of rating for the buyer. The goal of any reputable seller is to achieve the highest percentage of positive feedback ratings. Poor feedback ratings or complaints can adversely affect a buyer’s decision to purchase from a seller or even get the seller banned from eBay completely.
There are four main formats for selling on eBay:
~ Traditional Auction: The seller sets a beginning bid price and a duration of one to ten days for auction activity. Potential buyers can bid on an item up until the final seconds of the close of auction. The highest bidder wins the auction and is required to send payment to complete the transaction.
~ Buy It Now: This is a fixed price format where buyers can avoid bidding via auction and choose to purchase an item immediately.
~ Dutch Auction: A seller can list multiple identical items and sell them individually to the highest bidders.
~ eBay Stores: This option allows a seller to set up an online store and maintain an inventory of products for sale. Store items can be sold via auction or “Buy It Now.” This system is ideal for businesses that want to maintain an ongoing inventory and presence on eBay.
Money, Money, Money
When you sell an item on eBay, you are charged an insertion fee and if the item sells, a final value fee. Fees are charged on a tiered scale based on the price of the item.
In addition to the insertion and final value fees, there are other options such as the ability to list multiple photos on eBay’s picture service, add additional text to the item description, or display a photo next to the listing.
eBay Stores are structured differently and require a monthly subscription fee. A “Basic” store account costs $15.95 per month plus listing and final value fees. With a basic store, you receive up to five pages to list items for sale in your virtual storefront. The “Featured” store level offers up to ten pages for $49.95 per month, and an “Anchor” store offers up to fifteen pages for $499.95 per month.
As a seller, you can require that buyers send you payments via check or money order, although this can slow the sales process and limit your market reach. Most sellers utilize payment collection services either through a merchant card processor or Paypal. Paypal is a subsidiary of eBay and allows consumers to securely send and receive payments via an e-mail account. There is no fee to sign up as a Paypal user, however, a small transaction fee is deducted from each payment collected, similar to the fee charged by other merchant card processors.
Business Opportunities
Millions of people make a living by selling items on eBay. Whether you’re a stay-at-home mom looking to generate some extra income or an innovative retailer with access to a unique set of products, the opportunities are plentiful.
Small business owners aren’t the only ones cashing in on eBay. Some big retailers are liquidating overstock and reaching new customers. The Sharper Image, Sears, Hewlett Packard, and Dell are just a sample of the retail giants with a presence on eBay. If you already have a successful online or other business, you could diversify your sales strategy by using eBay to offload your overstock, sell products individually, or sell items in bulk quantities.
According to the most recent investor report from eBay, buyers shop the site in search of selection, value, convenience, and entertainment. The report also reveals that sellers benefit from access to broad markets, efficient marketing and distribution costs, the ability to maximize prices, and the opportunity to increase sales.
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