Making a Living from Your eBay Business

by Michael Miller

Overview

The power of online auctions is attracting hundreds of thousands--if not millions--of users who want to turn their eBay hobbies into profitable businesses. While turning an eBay hobby into an eBay business might look easy, making that business profitable is much more difficult. Not enough sellers treat their eBay sales as a business, and subsequently are disappointed in the results. To launch a successful and profitable eBay business, the detailed instructions in this book will show you how to get started. It will help you determine what kind of business you want to run, write an action-oriented business plan, establish an effective accounting system, set up a home office, obtain starting inventory, arrange initial funding, establish an eBay presence, and arrange for automated post-auction management. This book is a step-by-step guide for anyone serious about making money from their eBay sales. Unlike other computer-oriented titles, this is a straight-ahead business book that shows how to set up and run different types of eBay businesses, and how to maximize sales and profits while doing so. This book includes a section titled "Choosing Your eBay Business" that details six different types of eBay businesses you can start. Included in this section is a chapter on eBay Trading Assistants (AKA drop-off stores or consignment stores), which is the newest form of an eBay business.

Product Details

ISBN-13:	9780132713979
Publisher:	Pearson Education
Publication date:	10/12/2006
Sold by:	Barnes & Noble
Format:	eBook
Pages:	456
File size:	15 MB
Note:	This product may take a few minutes to download.
Age Range:	18 Years

About the Author

Michael Miller is a top eBay seller and a successful and prolific author. He has a reputation for practical, real-world advice and an unerring empathy for the needs of his readers. Mr. Miller has written more than 75 nonfiction books in the past 17 years for Que and other major publishers. His books for Que include Absolute Beginner’s Guide to eBay, Easy eBay, Tricks of the eBay Masters, eBay Auction Templates Starter Kit, and Absolute Beginner’s Guide to Computer Basics. He is known for his casual, easy-to-read writing style and his ability to explain a wide variety of complex topics to an everyday audience. You can email Mr. Miller directly at [e-mail]. His website is located at www.molehillgroup.com.

Read an Excerpt

IntroductionIntroduction

Many of us dream of running our own businesses. Until recently, being able to achieve that dream meant obtaining some type of outside financing, finding a retail location or office space, and physically opening the doors to new clients or customers. Today, however, there's an easier way to go into business for yourself—from the comfort of your own home.

This new type of dream business is possible thanks to the advent of eBay, the world's largest online trading community. An eBay business makes money by selling items via eBay auctions. You do all the selling from your own personal computer, collect the payments sent to you electronically and through the mail, and then ship the items you sell via the post office. It's simple, it's relatively easy, and it doesn't take a ton of investment.

It's also an increasingly viable way to make a living. According to a recent article in the New York Times, an estimated half-million people make a full- or part-time living from selling merchandise on eBay. On any given day there are close to 4 million items listed for auction at eBay. For the year 2004, that added up to more than $34 billion worth of merchandise sold online—or $950 worth of sales every second.

You could be making some of that money. Getting started on eBay is as easy as finding something to sell and creating an auction listing. Anybody can do that—as witnessed by eBay's 135+ million registered users. However, to turn that selling into a business will take a little more effort.

What do you need to know to run an eBay business? More than you think, if you want to do itsuccessfully. You need to determine what kind of business you want to run, write an instructive business plan, establish an effective accounting system, set up a home office, arrange any necessary funding, and purchase and warehouse your starting inventory.

And that's before you sell a single item.

Once you start selling, you have the entire auction management process to deal with. You have to list items for sale, manage your inventory, correspond with winning bidders, handle customer payments, deal with deadbeat customers, and pack and ship all those items you sell. To be truly successful, you need to do all this as efficiently as possible; you'll need to automate those repetitive tasks, manage your costs, and find a way to increase the success rates of the auctions you run.

Fortunately, you don't have to reinvent the wheel. You're not the first person to dream about running his or her own eBay business, so you might as well learn from others who've already done it.

Which is where this book comes in.

Making a Living from Your eBay Business presents everything you need to know to launch and run your own business, using eBay auctions to sell your merchandise. Unlike other eBay books on the market (including several that I've authored previously), this book focuses on the business aspects, not the technical details of running an auction. If you need to learn how to create a basic eBay auction listing, turn elsewhere. (To my Absolute Beginner's Guide to eBay, for example.) Once you know the basics, then this book will show you how to turn that knowledge into a workable business model.How This Book Is Organized

This book is organized into five main parts, as follows:

• Part 1, "Choosing Your eBay Business," presents some basic info on how an eBay business works, then introduces you to six common types of eBay businesses—one of which should be just right for you.

• Part 2, "Planning and Launching Your eBay Business," walks you through the "homework" you need to do before you start selling on eBay. You'll learn how to research your business model, create a business plan, evaluate your funding needs, deal with legal and tax issues, set up a recordkeeping system, and put together your eBay back office.

• Part 3, "Managing Your Day-to-Day Business," takes you through everything you need to know about running your business. You'll learn where to buy and how to manage your inventory, how to automate the auction listing process, how to manage customer payments, the best ways to pack and ship your merchandise, how to deal with customers (and customer problems), and how to more effectively automate your auction management.

• Part 4, "Maximizing Your eBay Sales," helps you make your auctions more successful—and your business more profitable. You'll learn some tips for improving item sell-through and increasing your selling price, for choosing the most effective listing options, for creating more powerful auction listings, for taking and displaying better product photos, and for promoting your eBay auctions.

• Part 5, "Growing Your Online Business," shows you how to take the next steps toward business success. You'll learn how to become an eBay PowerSeller, open an eBay Store, sell at other online sites, and manage your business's growth.

At the end of the book you'll find two useful appendixes. Appendix A is a brief accounting primer, for those of you who slept through accounting class in school. Appendix B lists some of the most common abbreviations you can use in your eBay listings.

Taken together, the 28 chapters and two appendixes in this book will help you launch and manage a profitable eBay business. By the time you get to the end of the final chapter, you'll know just about everything you need to know to make money on eBay. Now all you have to do is do the work!Let Me Know What You Think

I always love to hear from readers. If you want to contact me, feel free to email me at [e-mail]. I can't promise that I'll answer every message, but I will promise that I'll read each one!

If you want to learn more about me and any new books I have cooking, check out my Molehill Group website at http://www.molehillgroup.com. Who knows—you might find some other books there that you'd like to read.

© Copyright Pearson Education. All rights reserved.

Table of Contents

Introduction.

How This Book Is Organized.

Let Me Know What You Think.

I. CHOOSING YOUR EBAY BUSINESS.

1. So You Want to Start an eBay Business...

What, Exactly, Is an eBay Business?

Different Ways to Sell on eBay.

   Standard Auction Format.

   Reserve Price Auction.

   Dutch Auction.

   Auction with Buy It Now.

   Fixed-Price Sales in eBay Stores.

Understanding eBay's Fees.

Launching Your First eBay Auction.

   Before You List.

   Creating the Item Listing.

The Many Types of eBay Businesses.

2. The Second-Hand Reseller.

Easing into Business-By Selling What You Own.

Moving from Pastime to Business.

Sell Everything-or Certain Things?

Running a Second-Hand Merchandise Business.

   Finding Merchandise to Resell.

   Managing the Auctions.

   Packing and Shipping.

Pros and Cons of Second-Hand Reselling.

   Pros.

   Cons.

How to Become a Second-Hand Reseller.

3. The Bulk Reseller.

Selling in Bulk Means Buying in Bulk.

Specialize-or Vary Your Inventory?

Running a Bulk Reseller Business.

   Making the Buy.

   Storing and Managing the Inventory.

   Managing the Auction Process.

   Packing and Shipping.

Pros and Cons of Bulk Reselling.

   Pros.

   Cons.

How to Become a Bulk Reseller.

4. The Collector/Trader.

Turning a Hobby into a Business.

Grading and Authenticating Your Merchandise.

   Understanding Grading Systems.

  Getting Graded.

Running a Collector/Trader Business.

   Finding Merchandise to Resell.

   Preparing Items for Auction.

   Managing the Auctions.

   Packing and Shipping.

Pros and Cons of Collecting and Trading.

   Pros.

   Cons.

How to Become an eBay Collector/Trader.

5. The Arts and Crafts Seller.

What You Make Is What You Sell.

Running an Arts and Crafts Business on eBay.

   Deciding What to Make.

   Managing the Auction Process.

   Packing and Shipping.

Pros and Cons of Selling Arts and Crafts.

   Pros.

   Cons.

How to Become an Arts and Crafts Seller.

6. The Official Retailer.

Becoming an Authorized Dealer.

Running an Official Retailing Business on eBay.

   Ordering and Stocking the Product.

   Managing the Auction Process.

   Packing and Shipping.

Pros and Cons of Official Retailing.

   Pros.

   Cons.

How to Become an Official Retailer on eBay.

7. The Consignment Reseller.

Selling Other People's Stuff.

Setting Up Shop-and Setting Prices.

   Create a Consignment Contract.

   Set Your Fee Schedule.

   Consider Opening a Drop-Off Location.

   Go the Franchise Route.

Running a Consignment Business on eBay.

   Finding Clients.

   Advertising Your Business Online.

   Taking Possession of the Merchandise.

   Managing the Auction Process.

   Packing and Shipping-and Settling with the Client.

Pros and Cons of Consignment Selling.

   Pros.

   Cons.

How to Become an eBay Trading Assistant.

II. PLANNING AND LAUNCHING YOUR EBAY BUSINESS.

8. Researching Your Business Model.

Why Research Is Important.

Searching Closed eBay Auctions.

   Performing the Search.

   Extracting the Data.

   Analyzing the Data.

   Using the Data.

Using Other Research Tools.

   Ándale Research Tools.

   AuctionIntelligence.

   DeepAnalysis.

Determining Your Business Model.

9. Creating a Business Plan.

Thinking It Through-Before You Start.

   What Type of Business Do You Want to Run?

   How Much Money Do You Want to Make?

   How Much Time Can You-and Do You Want to-Devote to Your Business?

Why You Need a Business Plan.

How to Create a Business Plan.

The Components of a Winning Business Plan.

   Mission.

   Opportunity.

   Strategy.

   Organization and Operations.

   Strengths and Weaknesses.

   Financials.

Writing the Plan.

10. Evaluating Your Funding Needs.

How Much Money Do You Need-and Why?

   Estimating Costs.

   Projecting Revenues.

   Determining Cash Flow.

Where to Find Funding.

   Personal Savings.

   Credit Cards.

   Friends and Family.

   Loans.

   Investors.

Which Funding Option Is Right for You?

11. Establishing a Legal Business Presence.

Choosing a Type of Business.

   Sole Proprietorship.

   Partnership.

   Corporation.

Filing and Registering.

Dealing with Taxes.

   Collecting Sales Tax.

   Paying Taxes on Your eBay Income.

   Withholding Employee Tax.

Setting Up Your Bank Accounts.

   Merchant Checking Account.

   Dealing with Credit Cards.

Obtaining Insurance.

Hiring Professional Help.

12. Setting Up a Recordkeeping System.

Why You Need to Keep Good Records.

Components of a Bare-Bones Recordkeeping System.

   Inventory Records.

   Customer Records.

   Financial Records.

Setting Up an Accounting System.

   Tracking Your Business Activity.

   Key Financial Statements.

   Software for Small Business Accounting.

   Working with an Accountant.

13. Assembling Your Home Office.

Setting Up Your Home Office.

   Personal Computer.

   Computer Software.

   Printer.

   Scanner and Digital Camera.

   Internet Connection.

   Telephone and Fax.

   Filing System.

   Furniture.

   Office Supplies.

   Configuring Your Space.

Setting Up Your Packing Center.

   Finding the Space.

   Essential Supplies.

   Boxes and Envelopes.

Managing Your Physical Inventory.

III. MANAGING YOUR DAY-TO-DAY BUSINESS.

14. Buying and Managing Your Inventory.

Where to Find Merchandise to Resell.

   Wholesale Distributors.

    Merchandise Liquidators.

   Ándale Suppliers.

   Other Sources of Merchandise.

Managing Your Inventory Levels.

   Ordering the Right Quantity.

   Managing Your Reorders.

   Deciding to Drop Ship.

15. Automating Item Listing.

eBay Turbo Lister.

   Creating a Listing.

   Uploading Your Listings.

eBay's Other Listing Programs-Seller's Assistant Basic and Seller's Assistant Pro.

Ándale Lister.

Auctiva Poster and Mr. Poster.

SpareDollar sdLister.

Vendio Sales Manager.

Other Bulk Listing Options.

16. Managing Customer Payments.

Evaluating Different Payment Options.

   Cash.

   C.O.D.

   Personal Checks.

   Money Orders and Cashier's Checks.

   Credit Cards.

   Escrow Services.

Accepting Credit Card Payments via PayPal.

   Setting Up a PayPal Account.

   Paying for PayPal.

   Activating PayPal in Your Auction Listings.

   Collecting PayPal Payments.

   Withdrawing PayPal Funds.

Setting Up a Traditional Merchant Credit Card Account.

17. Establishing a Packing and Shipping Routine.

Choosing a Shipping Method.

   U.S. Postal Service.

   FedEx.

   UPS.

   Other Shipping Companies.

Calculating Shipping and Handling Fees.

   Working with Flat Fees.

   Working with Variable Fees via eBay's Shipping Calculator.

   Determining the Handling Charge.

   Combining Items for Shipping.

Packing Your Items.

   Picking the Right Shipping Container.

   How to Pack.

   How to Seal the Package.

   How to Create the Perfect Label.

  Printing Labels with Prepaid Postage.

   Shipping Insurance.

   Tracking and Confirmation.

Streamlining the Packing and Shipping Process.

   Setting a Packing/Shipping Schedule.

   Creating a Packing Assembly Line.

   Getting It There.

   Arranging Regular Pickups.

Shipping Larger Items.

Shipping Internationally.

18. Dealing with Customers-and Customer Problems.

Answering Bidder Questions.

Managing End-of-Auction Correspondence.

   Communicating Manually.

   Sending an Invoice at the End of the Auction.

   Communicating with eBay Selling Manager.

   Emailing in Bulk with Selling Manager Pro.

   Communicating with Other Auction Management Tools.

Handling Buyer Complaints.

   Listing Your Terms of Service.

   Guaranteeing Your Merchandise.

   Resolving Complaints with a Mediation Service.

Dealing with Deadbeat Bidders.

   Step One: Contact the Unresponsive Bidder.

   Step Two: Go Through the Unpaid Item Dispute Process.

   Step Three: Leave Negative Feedback.

   Step Four: Block the Bidder from Future Sales.

   Step Five: Give Other Bidders a Second Chance.

   Step Six: Relist Your Item.

Coping with Complaints About You.

   Responding to Negative Feedback.

   Getting Negative Feedback Removed.

   Responding to Item Not Received Complaints.

19. Automating Auction Management.

Should You Use an Auction Management Tool?

Evaluating Auction Management Tools.

Popular Auction Management Tools.

   Ándale.

   Auction Hawk.

   AuctionHelper.

   Auctiva.

   ChannelAdvisor.

   eBay Seller's Assistant Basic.

   eBay Seller's Assistant Pro.

   eBay Selling Manager.

   eBay Selling Manager Pro.

   HammerTap.

   Marketworks.

   SpareDollar.

   Vendio.

Another Option: Software Tools.

IV. MAXIMIZING YOUR EBAY SALES.

20. Improving Item Sell-Through and Selling Price.

Setting a Pricing Strategy.

   Set It Low Enough to Be Attractive...

   ...But Don't Set It So Low That It's Not Believable.

   Make Sure You Recover Your Costs...

   ...But Not So High You Pay Too High a Listing Fee.

   Make Sure You Can Live with a Single Bid.

   So What's the Right Price?

Determining the Best Days and Times to List.

   Best Time of Day to List.

   Best-and Worst-Days to List.

   Seasonal Variations.

Other Tricks for Improving Item Sell-Through.

   Offer a Discount for Multiple Purchases.

   Offer Free or Discounted Shipping.

   Make Changes Mid-Auction.

Selling Internationally.

   Pros and Cons of International Selling.

   Accepting Foreign Payments.

21. Choosing the Most Effective Listing Options.

Selecting the Right Auction Length.

Choosing a Different Start Time.

Picking the Right Category.

Choosing Listing Enhancements.

   Subtitle.

   Gallery.

   Gallery Featured.

   Bold.

   Border.

   Highlight.

   Featured Plus!

   Home Page Featured.

   Gift Icon.

   Counter.

22. Creating More Powerful Auction Listings.

Writing an Effective Item Listing.

   Write a Title That SELLS!

   Write the Right Description.

   Stress Benefits, Not Features.

   Use the Right Abbreviations.

   Don't Reinvent the Wheel-Reuse Item Listings That Work.

Creating Better-Looking Item Listings.

   eBay's Listing Designer.

   eBay Turbo Lister.

   Free Listing Templates.

   Third-Party Listing Tools.

Using HTML in Your Listings.

   How HTML Works.

   Entering HTML Codes.

   Codes to Format Your Text.

   Codes for Font Type, Size, and Color.

   Codes for Paragraphs, Line Breaks, and Rules.

   Codes for Graphics.

   Codes for Links.

   Codes for Tables.

Ready-to-Use HTML Templates.

   Second-Column Details.

   Big Picture, Colored Background.

23. Displaying Better Photographs.

Taking Effective Photos.

   Shopping for a Digital Camera.

   Don't Forget the Accessories.

   How to Take a Good Photograph.

   Five Types of Pictures Not to Take.

Scanning Instead of Shooting.

Editing Your Photos-Digitally.

   Choosing Image Editing Software.

   Resizing Your Pictures for Best Effect.

Adding Photos to Your Item Listings.

   Using eBay Picture Services.

   Using Third-Party Image Management Services.

24. Promoting Your eBay Auctions.

Cross-Promoting All Your Auctions.

   Linking to Your Other Auctions.

   Linking to Your About Me Page.

Linking from Other Sites to Your eBay Auctions.

   Linking to Your About Me Page.

   Adding a "Shop eBay with Me" Button to Your Web Page.

Promoting with eBay Keywords.

Other Ways to Advertise Your Auctions.

V. GROWING YOUR ONLINE BUSINESS.

25. Becoming an eBay PowerSeller.

What Is a PowerSeller?

Do You Qualify?

PowerSeller Benefits.

   Priority Customer Support.

   Other Official Benefits.

   Psychological Benefits.

How to Become a PowerSeller.

Ten Tips for Achieving PowerSeller Status-or Just Increasing Your Day-to-Day Sales.

26. Opening an eBay Store.

What Is an eBay Store?

Benefits of Opening Your Own eBay Store.

Do You Qualify?

The Costs of Running an eBay Store.

How to Set Up an eBay Store.

   Creating Your Store.

   Listing Merchandise for Sale.

   Customizing and Managing Your Store.

Earn Referral Fees.

27. Other Ways to Sell Online.

Other Online Auction Sites.

   Amazon.com Auctions.

   ArtByUs.

   Bidville.

   iOffer.

   Yahoo! Auctions.

Other Selling Sites.

   Amazon Marketplace.

   Half.com.

   LiveDeal.com.

The Other Alternative-Opening Your Own Online Store.

Utilizing a Prepackaged Storefront.

   Ándale Stores.

   ChannelAdvisor.

   Infopia.

   Vendio.

  Zoovy.

Building Your Own Site from Scratch.

   Finding a Web Host.

   Obtaining a Domain Name.

   Creating Your Website.

   Incorporating E-commerce Software.

   Web Design Firms.

28. Managing Growth.

Analyzing Your Business.

Locating More Merchandise to Sell.

Finding More Space.

Hiring Additional Employees.

   What Should Your Employees Do?

   Don't Forget the Details.

Managing Your Time.

How Big Is Too Big?

VI. APPENDIXES.

A. Accounting Basics.

Revenues, Expenses, and Profits.

Assets and Liabilities.

The Difference Between Profits and Cash.

Financial Statements.

   Income Statement.

   Balance Sheet.

B. Listing Abbreviations.

Index.