When it comes to selling products online, the first place that most people would think about is eBay. From a wrecked Honda Civic to a vintage pendant, you can find a plethora of things on eBay. No doubt, there are many people who have become successful with it, but how easy is it to make money on eBay? Let’s find out.
What Is Ebay?
Ebay is an eCommerce website which allows people to sell a variety of goods and services online. It was founded by Pierre Omidyar in 1995, who first sold a broken laser pointer through an online auction. Today, the online marketplace operates from 30 countries worldwide while handling millions of retail transactions daily.
How Does It Work?
Step #1 – Product Research
If you are new to this platform, you might want to start by finding out what are the things that you can AND can’t sell on eBay. This is to make sure that you comply with the law and to prevent you from becoming a blacklisted seller.
If the item is appropriate, the next step is to find out the demand and competition through a special analysis tool called Terapeak Market Research Tool. This software is capable of providing information to help you find profitable products to sell, evaluate your sales, source your inventory and optimize your product listings on eBay.
One the other hand, if you are looking to convert second hand items into cash like on Craigslist, eBay offers an interactive graphic to help you gauge the average market value based on new, used or vintage products.
Another way to find out the popularity of a product is to use keyword research. This data reflects what the majority of people are searching for online and it will help to guide your marketing strategy on eBay. If you don’t know what keyword research is all about, I recommend that you use Jaaxy to get started.
Now that you have done your research, let’s move onto the next step.
Step #2 – Product Listing
The way you list your products can either make or break a sale. At eBay, you are encouraged to;
- Provide detailed product description and visual presentation.
- Offer attractive and convenient shipping option for your customers.
- Set a competitive price for your product (watch the video below).
This information are factors that will attract online shoppers to view your product based on their first impression. Therefore, it’s important to get this process right from the very beginning.
Step #3 – Product Shipping
When it comes to shipping, you want to make sure that the package reaches its destination promptly and safely. Hence, eBay provides shipping labels, supplies and feedback system to ensure the efficacy of the product fulfillment.
Step #4 – Getting Paid
PayPal is the preferred payment gateway at eBay. If you offer this method of transaction, your product is likely to attract more online shoppers and you get access to better sales tracking tools too. In order to maximize profits, you might want to consider setting up an online store so that you can sell more products and build your online brand.
How Much Does It Cost?
This part isn’t the easiest to explain, but I’ll do my best here to simplify things for you, okay? Now, remember the Terapeak Marketplace Research tool that I talked about in Step 1 (see above)?
It is not compulsory that you get one, but considering how saturated the online marketplace has become in eBay, it’s wise to have some retrospective data that can give you some insights about your market positioning as a new seller. After all, you do want to make some money.
You can get the tool for free (with limited features) or pay a certain amount of fee (more features) as shown below.
Back on eBay, whenever you list a product, they will charge a certain percentage of a product’s total selling price. Here’s an overview of how the fee is calculated;
- Insertion Fee (Basic) – The fee incurred for listing a product online.
- Final Value Fee (Basic) – The final price of an item which includes shipping charges.
- Listing Upgrade Fee (Optional) – Customizing features that will enhance your listing to attract more online shoppers.
To help you get through this nerve-wracking calculation, eBay provides an online calculator to help you generate an estimation of the fees with just a few simple clicks.
But that’s not the end of it. For every transaction made via PayPal, an additional fee will incur on the seller’s side. The standard fee is 2.9% plus 30 cents for domestic transactions, and 3.9% plus 30 cents for cross-border transactions.
In summary, your cost of selling a product on eBay will look something like this;
- + Product cost
- + Insertion Fee
- + Final Value Fee
- + PayPal Fee
- +/- Terapeak Marketplace Research Tool
- +/- Listing Upgrade Free
That’s an awful lot of fees if you asked me.
Let’s Hear What Some Sellers Have to Say about Ebay…
Leveraging the marketplace at eBay, you are able to promote and sell to a wider audience.
Providing good product description will make a difference in your selling experience.
And if you stay in business long enough, you could become a power seller someday.
However, as described earlier, you have to be prepared to pay for the fees.
Meanwhile, the lack of a reliable feedback system…
And the one-sided buyer protection are some common frustration faced by some sellers.
So, Is It Easy to Make Money With eBay?
Millions of people trade on eBay’s marketplace daily. So as a seller, you can definitely benefit from these advantages;
- It’s easy to set up an account and list your products (even if you just have one).
- Used items can be sold for a good value if you are creative enough.
- Get local as well as international visitors to view your product listing.
However, as with anything online, making a reasonable profit can be challenging due to these circumstances;
- You are in for a very competitive market, regardless of your niche.
- Without a product or market research, you’ll be selling blindly on eBay.
- Considering the amount of fees that you are subjected to pay to eBay and PayPal, selling larger volumes or high ticket items can yield more profit.
- Make sure that you understand the implication of inadequate processing fees, refund policies and negative customer feedback (just to name a few) to avoid having to deal with unsatisfied buyers or worse, unforeseen legal complications.
Think this is complicated? Well, unfortunately, there are no easy ways around it. If you are willing to familiarize and learn their business system, eBay can be a great platform for selling.
But do you know that there is a better way to control your product marketing while keeping most of the sales profit? By creating your own business website, people can find you not only on eBay, but also on Google Search as well.
Don’t know how to set up a website? No worries. The training at Wealthy Affiliate has all the tools and support to help you become a webpreneur. Here are some of the features that you can use to kick-start an online business.
Having a business website will certainly set you apart from other sellers out there. So check out the training and start selling today.
Do you have any thoughts or questions about online selling? Just leave them at the comment area below and I’ll get back to you.
Hello Cathy!
You have done a great work with this article. Very detailed description of how eBay works and what somebody can expect from working with it. I have done it in the past but gave it up after some time. It works I know, but in my case I figured it is not my type of business for a long run. My main problem was to find a sortiment and supply of good products to work with. I guess if you resolve that issue, eBay can be a good place to do business.
Hello Cathy,
I occasionally buy or sell something on eBay with good success. I think there are quite a few people who have successful eBay businesses. Like anything, to succeed you have to have the knowledge of how to accomplish your goal, you have to have the desire to do it and you have to put in the time and effort it takes to become good at it.
I agree with you that the fees seem to have become more numerous and higher than they were in years past on eBay. I suspect that this may be due to an increasing percentage of the sales over time being from “professional” eBay retailers. But whatever the reason they are higher.
Thank you for the discussion of the price comparison tool, I was unaware of it. Good tip!
Hi there Xin Zhang,
Effort and commitment are crucial to succeed in any online business, be it on eBay or on your own. But if you are putting the same amount of time to drive audience to your product, why not focus on the larger audience coming from the search engine? Why not leverage those fees and invest on paid traffic instead?
Competition is a big factor to consider when you are just a new seller. Aim for something with lower competition and scale from there. By creating your own website, you can take the advantage of keyword research to get rank and be found by more targeted audience and still make money than trying to compete with the giants on eBay.
In the training at Wealthy Affiliate, new business owners are thought to do just that and many achieve amazing results. Just goes to show that when you focus on lesser competition, you’ll excel more as being unique in your niche.
Thanks for your write on how it’s like to make money on eBay. Even though I have sold a thing or two on the marketplace in the past, it has always been my question as to how I can create a business out of selling products on eBay. Do you have any advice on that or how I could start my business online for that matter?
Hi there Christian,
Unless you really understand and willing to accept the challenge that comes with selling on eBay, I would recommend that you start by creating a business website instead. It will give you a good foundation and an avenue to build, change and improve on your business ideas without having any restriction.
There are two ways you can go about this. If you already own a business or helping a family with a retail business, give it a good make-over by bringing it online. If you are not a business owner like me, then dive into a niche that you like by becoming an affiliate marketer.
A good training that can help you get started is at Wealthy Affiliate University. They have all the basics and vital tools that put you on the right track in the world of online marketing, whether it is business or affiliates. I have been with the community for almost 2 years now and you can read more about how I started my time freedom journey with them.
Hi! Thank you for your post, it was really interesting. I am a member of Wealthy Affiliate for some time now with an active website and I have a question: Can you become an e-Bay affiliate or it doesn’t have an affiliate program? Do you know if it is available in all countries? Thanks again.
Hi there Effie,
Ebay has an affiliate program and it is called eBay Partner Network (ePN). I did a quick scan of the network agreement and didn’t find anything that states country restriction so I am guessing it’s available to anyone as long as you have a website with good traffic. That seems to be a very important prerequisite from what I’ve read.
I’ve tried selling a jacket on Ebay, haven’t been succesful. Problem is that they charge sellers fees, and these fees are monthly recurring, from my experience. Though I do enjoy buying things on Ebay, I don’t auction ’em anymore, I’m just not good when it comes to auction competitions. Amazon sellers face some similar ordeals when selling their items.
Thanks for sharing your experience with us Lakan,
I think when it comes to bidding, you need to have a few losses experience before you can really start to earn anything. Competition on both of these platforms are huge and trying to look unique as a beginner seller can be quite tough. It’s probably better off to just start your own business website and build your traffic from there.
Hi Cathy,
I enjoyed reading your article about Ebay. I have sold a bunch of things on eBay over the years and have made some decent money on a few items, but have made little to no money on others due to all the fees as you mentioned. I think it’s best to sell higher priced items as the smaller things just don’t seem worth it.
I was unaware of the research tool though, so I will check that out. Ideally though, starting your own website is definitely the way to go!
Hi Kristy,
Those fees can really take up a lot of your profit. Most people who are thinking of selling on eBay are quite unaware about it. So I do hope that this article is able to shed some light on the topic.
Really interesting post. I have looked at making money on eBay for a long time and have had a little success. I like the concept, but there can be a lot of negatives too. If you have patience and the ability to look and see great offers and trends, then it can certainly make you a feasible income.
Hi Chris. EBay is such a huge marketplace; it can be quite daunting for beginners to start selling their products online. So many rules and regulations yet so little room for customization and creativity.
Cathy.
Great post on eBay. I myself am a long time business owner of theirs and have been successful to varying degrees. eBay of course, is like any business you work. It requires learning what is going on, then developing a marketing strategy that pertains to your products.
But all in all, it is a long and timely venture. You also do not get all the money you think you do. They take out close to 20 percent of your profits in fees going to eBay ads, staff, and overhead, along with PayPal which you most definitely need to be using anyway.
Selling drop shipping products is what I do on eBay. And it’s one of the easiest ways. Yet like I said, very long and tiring business to be in. The competition is so fierce I would actually tell you to avoid it in the future. It is getting even worse.
But as you mentioned Wealthy Affiliate, a program where you can build the business you want to be in, and perhaps sell products you already have, or even sell someone else’s products. Oh yes! I would recommend it just like you.
In fact if I wasn’t an online success already, I would sign up from this very article, given my experience with eBay.
Thank you and hope this helps others going through to their own success online.
Hi there Rick,
Thank you for sharing your in depth experience on eBay with us. I understand that growing an online business takes time and effort, but 20% cut sounds like a lot to take from one’s profit. Now I understand why some experienced people advice that we should go for higher priced items when selling on eBay.
To make the most profit, it would be best for business owners to use specific keywords to attract targeted audience and sell the products directly from their own website. The training at Wealthy Affiliate outline this process step-by-step and even people without any experience can get started easily.
I have never really got the whole eBay thing, it always sounded to me as just another way to spend money on more useless stuff. I guess I really didn’t understand how it all worked.
Thanks to another one of your great posts, my knowledge about eBay has increased tenfold!
Make that two of us, John. Some people have recommended that I start an online business with eBay because it’s easy, but despite the popularity, I never figure out how it works. As it turns out, you can either like it a lot or hate it. I personally don’t fancy the fees that are applied to sellers and would much rather promote better quality products through affiliate marketing.