Can eBay Make You Rich? 235
adamlazz writes "For 11 years, eBay has been a great resource to buy or sell goods without leaving your computer. And with many stories of people getting rich exclusively from doing business on eBay, NewsFactor has decided to go in depth with these stories, and explore what it takes to really make your million on eBay. From the article: 'A tiered system designed to reward qualified sellers, the PowerSeller program is by invitation only, and has a number of criteria that must be maintained to keep the designation. At the lowest level, Bronze, a PowerSeller must average at least $1,000 in sales per month for three consecutive months; have an account in good standing; and get an overall feedback rating of 100, with at least 98 percent of the comments marked as positive.'"
As a buyer it costs money if anything goes wrong (Score:5, Interesting)
Now, the only reason that a seller can't sell 100 low value items, then ship turnips instead is that it'd affect their feedback score.
I use to buy lots on Ebay until I had a problem with a low value transaction. I'm not planning to use Ebay again.
I'm posting anonymously because even though what I am saying is true, I wouldn't want Ebay or Paypal to initiate legal action as prooving that I hadn't slandered them would cost a mint.
A system open for abuse? (Score:2, Interesting)
What's to stop someone from using cheap chinese labour from making thousands of bogus accounts just for blackmailing ebayers?
Top ten ways to get rich (Score:5, Interesting)
Not what it is cracked up to be.... (Score:5, Interesting)
While this article alerts the viewer to the hard work necessary to get a profit, I feel the title alone makes people think it's more promising than other ventures. I say no.
For me, ebay was booming goldmine from 1997-2001 for items in the mainly sub-$500 range. Back then, I generally got the prices I wanted for many items and once in a while something skyrocketed in price beyond my dreams. In fact, many items I could not sell locally for years found an interest buyer on ebay. About 75-85% of what I listed sold. Better yet, people emailed me after auctions to make offers and I often sold another 5-10% on the remaining 15-25% or so. Ebay fees were also reasonable. The one downside was the shipping. Many people don't realize it the time it takes to package 5-10 items and ship them off (my items were fragile) including filling out insurance/delivery confirmation tags by hand. It take a good chunk out of your day. Also, as paypal was not the norm back then, cashing checks or money orders took quite a bit of time. Remember, I was a mom and pop operation, I could not automate these processes beyond a certain point.
To make a long story short, what happened?
1. After this period, ebay has clamped down. Every single fee has been raised, doubled, tripled, or more in price. Items that used to cost 50 cents to simply list now cost over $2.00 to list in some cases. More and more pay-for "options" were added, which wouldn't be so bad but they had the effect of making competition stand out more - so on one level with seller's it became a cold-war style game on who could outspend each other. The "gallery option" of a small thumbnail (which is almost ubiquitous in some categories) added (now) $.35 cents PER auction.
2. This all sounds like chumpchange, but my ratio of auctions sold went down, over time, to 25-40% selling rate. Worse yet, I hardly get after auction offers, as ebay clamped down on emailing members outside the control of their system a few years back. Also, the prices I had to accept were declining and going below what I actually could get locally for them. The fees started killing me. The profit margin was killing me. The shipping was killing me (if you ever see a guy with cheap prices on ebay but expensive shipping, that's because shipping is his profit margin, ebay doesn't collect fees/shipping off of that besides Paypal).
3. Everybody pays now with paypal. It is great and convenient but another expense.
4. The downswing in sales had several causes. One of which is because of ebay's success as a marketplace, every started selling there. While the amount of sellers went up exponentially by my estimate since 2000, the amount of buyers went up only linearly, creating a glut in that market. By looking at certain listings, it also is apparent to me that many must be or take sellers that work under minimum wage of the US. Some of that is because they are foreign sellers. It's fine that they sell, but I can't compete at their undercut prices - just a fact of life. They don't have the expenses I do. It's ebay's form of outsourcing.
I know other companies that had an ebay branch that have been losing money for years by creating too many listings, dazzled by revenue, but not checking all the expenses or just hoping to "build an audience" until they become profitable (customer loyalty is not strong here if prices differ more than a few percent). One such colleague just stopped after posting over 200 auctions daily for the last 7 years in addition to his regular business (he has workers, not that he sat there posting himself). After all this time, he ran the numbers and just noticed it did not make sense. After paying his workers, he was actually losing money. (The reason he never caught this was that the workers were considered as a expense on the whole company before, not that branch - he didn't seperate expenses). He just quit
Re:Well (Score:4, Interesting)
Re:Ebay made me rich in experience! (Score:5, Interesting)
This the marginal law. If I have a thousand coconuts, the last coconut provides me very little value. On the other hand somebody without coconuts at all would want to give you good money for the first coconut, less for the next ones, and very little for the 100th coconut. But as economy works, there will only be one price: The price at which the seller would think the price of the last sold coconut is still fine, and the buyer thinks the same of the last bought coconut. And that is the marginal principle. If you try to sell something where the marginal value of the (one piece of) good you are selling is higher than any buyer would have of buying it, there is no provision for a trade.
So, yes, funny but more than that.
Re:As a buyer it costs money if anything goes wron (Score:3, Interesting)
I even advised the vendor that i would engage DHL worldwide couriers and pay for shipping costs myself. The vendor responded as per above "You bid - now you must pay - thanks".
No resolution was reached.
Making a living on eBay (Score:5, Interesting)
How many are making a decent living off eBay sales? How many people's lives have been transformed by the ability to give up their day job and do what they like while getting paid for it?
For example this artist [ebay.com] who left her job as a web designer nad is now making lampwork glass beads and selling them on eBat.
Disclaimer: I know her personally and this is a bit of promotion - but I think it's a valid example because it would be difficult for someone living in a remote place to have this kind of access to the markets that appreciate her art without eBay.
Worth the effort? (Score:3, Interesting)
It depends on what your goal is. I don't think you can get as rich as Bill Gates is by dealing on Ebay but you I know a few people who earn a living selling merchandize on sites like Ebay. If you happen to have a small corner shop that sells, say sports goods, photographers supples, new or used books etc.. you can supplement the income from your store, especially if you specialize in a niche market and cater to hobbyists or people who practice sports that are not quite as massively popular as foot ball or basketball and for which you cannot get supplies in your neighborhood sports outlet. Another new fad is used car dealers who make use of favorable exchange rates to buy used cars via Ebay but that is something you have to be very careful with since it is easy to get burned. Dealing on via an intermediary like Ebay or Amazon helps because they get a lot of traffic and because there is greater trust than if you are selling your merchandize through a badly designed homecooked website. Even so, Ebay wouldn't always be my first choice if I had to make my living selling stuff online.
Re:A system open for abuse? (Score:3, Interesting)
Problem is that for the rest of us - IIRC, only one feedback counts per account (per time period?) - this was different in the begining, until people started boosting their feedback with false purchases (a week?
That all said, I hate the vultures on ebay who charge bullshit shipping prices and I've bid on some products with the sole intention of ruining their 100% feedback ratings with a negative feedback in the past few years. In exchange, I get a NPB or 3 on a throwaway account - something that leaves me crying at night.
I know, I know, it is ultimately a small thing, but I get a teensy weensy sense of satisfaction by knowing, no matter what they do, they will never get that 100% again.
Before the apologists chime in saying "OMG GAS IS SOO MUCH AND I HAVE TO PAY FOR PACKING MATERIAL AND THAT IS WHY SHIPPING IS $12 FOR SOMETHING THAT WEIGHS 1 POUND" - no assholes, USPS will provide (and even deliver) free boxes, packing material, tape (ok, no tape anymore, people sort of abused it, but then again, they did send you 24 rolls at a time) and will pick up your packages from your doorstep if you ship priority mail, so die in a fire. I really have no fucking patience for people who blatantly and openly commit fraud.
Besides, ebay loves the power sellers because they make tons of money on them (which is also the reason why ebay puts up with clearly fraudulent - and, may I add, quite illegal under several laws - auctions such as $12 prada handbags from Hong Kong with unlisted shipping fees. [ebay.com] And look, the seller is a power seller!
Ebay (and paypal) makes a killing on each and every single sale, regardless of whether it is fraudulent - although they don't make any money on shipping fees. I'm actually surprised that ebay hasn't started going after sellers who inflate the shipping fees to avoid paying ebay their cut. I suppose that with the paypal fees (which are basically pure profit, it isn't like their buyer protection is worth a half damn to the defrauded purchaser, it all works out for ebay quite nicely.
Sadly, because of the obvious conflict of interest, fenceBay won't be the ones who put an end to this sort of behaviour.
Re:Ebay is getting rich, not you (Score:5, Interesting)
That is because they are often stolen goods.
fenceBay is the greatest thing for theives since the invention of the crowbar. It's like a pawnshop that doesn't care and finds you buyers across the country to avoid those pesky "hey, Bill, that laptop you just bought looks an awful lot like my stolen one" moments.
All for the low, low, price of about 10% of purchase price (which is actually quite good, dishonest pawnshops will charge you far more and will give you up if the 50 come looking for you)
Now, granted, some people troll fatwallet and slickdeals looking for bargains, buy up all the stock and list it before it is even delivered, but you really can't say with a straight face that ebay isn't used by a good number of theives.
eBay is the perfect retail environment (Score:4, Interesting)
There are demonstrably people out there who can't or won't google for items before bidding silly money on them, which means that they're unlikely to check your selling history either to see that you've sold a hundred identical "used but unopened, unwanted presents". That seems to be the trick; pitch your "used" item as a bargain, then watch the idiots spend more than they would on a "new" item, apparently convinced that all the other idiots bidding against them must know what they're doing.
The only thing that keeps me coming back to eBay now is the opportunity to message the winning bidders in these auctions with links to where they can buy the same item new for less, often much, much less. Curiously, I've yet to receive a response to these helpful messages that's not a variant on "FCUK OFFF!!!!!!!eleven!!!!"
Can eBay Make You Rich? (Score:4, Interesting)
$19 to ship a saw blade? Are you fucking kidding me? [ebay.com] (and yup, that's from a power seller)
Before the apologists chime in saying "OMG GAS IS SOO MUCH AND I HAVE TO PAY FOR PACKING MATERIAL AND THAT IS WHY SHIPPING IS $12 FOR SOMETHING THAT WEIGHS 1 POUND" - USPS will provide (and even deliver) free boxes, packing material, tape (ok, no tape anymore, people sort of abused it, but then again, they did send you 24 rolls at a time) and will pick up your packages from your doorstep if you ship priority mail. A one rate envelope ships cross country for under 4 bucks.
You can't defend abusive shipping or handling costs. I'm surprised that ebay hasn't made a serious effort to get rid of these sellers, but that's probably because they make enough on paypal fees to make up for what they don't get in listing and closing fees.
Re:Why couldn't you get rich via EBay? (Score:5, Interesting)
I was running my own business up until early this year and I can confirm it is possible to make (some) money on eBay. I have come to see eBay as the business equivalent of a hidden reef for shipping. At first glance it appears to be a good way to get to customers and make some money but once you have taken into account all the factors the profit margin is tiny. I worked out that if I did nothing but pack boxes all day I could just about turn a profit over all.
The problem is that every company is trying to grab their portion of the market and they all do it by having the lowest price. There were times when I would look at items for sale and consider bidding on them myself because they were going for less than I could get them from my supplier (and I felt I had a good deal from my supplier). Six months or a year after first appearing most companies have vanished, presumably because they have burnt through their seed money trying to grab a portion of the market.
I'm not saying this situation is wrong, it's capitalism in action and it's great for the shoppers. It is, however, causing a lot of businesses to go to the wall and using up a lot of people life savings on route.
Re:Can eBay Make You Rich? (Score:2, Interesting)
That's small change. Try $134.97 to ship a Golf Pouch [ebay.com] which costs less than $20 to Singapore.
Re:Not what it is cracked up to be.... (Score:3, Interesting)
Well said, I too ran a mainly eBay business and found exactly the same problems. The nickle and dime death is the biggest problem. The fees are at the level where there is virtually no profit. I gave what I feel was very good service and I had people coming back on a fairly regular basis. Even so I would often be making £30 sale. By profit I mean what's left after shipping and fees. That £1 then had to pay for premises and other business expenses and provide me with a wage. I struggle to see how any business can make money on eBay anymore. It's great for getting rid of one off items that would probably end up in the bin but thats about it.
Re:Not what it is cracked up to be.... (Score:2, Interesting)
It seems like you need to really work hard in order to make any real money off the profits.
The biggest kicker is that after all is said and done and you want out, you work so hard to build up a company that you can't sell. I know some people who's whole business model revolves around their future sale of their business that they worked so hard to build.
There never really seemed to have an end in eBay.
Maybe i'm just short sighted.
Actually... (Score:4, Interesting)
I have a collection hobby, and I actively pursued ebay for more items of my hobby
when I saw weak or less than informative listings in their infancy I'd write the sellers, correct the name or spelling or whatever I knew about the piece to help the seller do a little better.. I have two feedbacks in my history that have no item #-- just sellers who bounced a thank you...
'course, my motivation was- folks who wanted the same series of toys would have less cash for the ones where I didn't help the sellers out....
rating system (Score:4, Interesting)
Re:rating system (Score:3, Interesting)
Sellers aren't going to blink at selling to someone with a 90%+ positive rating, especially if looking at the feedback makes it clear the negative feedback is all retaliatory.
And if a seller does get all freaky and won't deal with you because you've been hit with some revenge feedback, he's probably not someone you want to deal with anyway. His loss.
Re:Why couldn't you get rich via EBay? (Score:4, Interesting)
I quite agree. It became apparent quite quickly that there was little money to be made as a reseller. I'm not at all surprised - it is what I expected the Internet to do. Manufacturers needed distributers and resellers before the Internet because they couldn't hope to reach all their customers any other way. That's not so much the case anymore. I imagine we will see more and more manufacturers selling their own products direct to customers via the web.
My next venture will actually involve me manufacturing something. I just have to decide what :o)
Re:Why couldn't you get rich via EBay? (Score:3, Interesting)
Re:Ebay is getting rich, not you (Score:2, Interesting)
Not really, in the US anyway. A purchase from a pawn shop comes with good "title". When you buy it, it is yours, permanently. Up until that point of sale, it is subject to confiscation by the authorities at the shop's expense.
A "smart" shop will steeply discount a suspicious item to get it off the floor after the mandatory holding period.
Re:eBay is the perfect retail environment (Score:1, Interesting)
Re:Why couldn't you get rich via EBay? (Score:2, Interesting)
I dunno...maybe not disappear entirely, but, fade away a good deal possibly. While there will always be the 'need' to have something immediately, I and others I know like myself, rarely if ever buy anything of merit from B&M stores. I may go out to them to physically look at the product (if expensive or comparing gadgets), but, I almost always research and order online. You often get free shipping and no sales tax.
In southern LA, down here the taxes are about 9%, and that starts racking up on large purchases.