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Be Realistic When Selling on eBay
As some of you know, I spent many years buying and selling
both on and offline and several of my products are based upon my
own experience in this area. I know that the vast majority of my
customers and subscribers have an interest in trading whether it
be on eBay or at the local market but more and more I am seeing
people with completely unrealistic expectations of what they will
be able to do. Most commonly these unrealistic expectations are
in respect of how much it actually costs to purchase specific
products and what they can then be sold on for.
I regularly get emails from people who want to know where they
can purchase products such as mobile (cell) phones, new release
DVDs, Playstation games and similar at, say, a 50% discount to
resell on eBay. The fact is that such a thing is not available -
it is a simple case of supply and demand and competition.
Take DVDs for example, most people think that these are
excellent products to resell on eBay because they are very
popular, not particularly expensive and easy to package and ship.
Unfortunately, they could not be more wrong. The DVD market is
one of the most competitive that there is - take a look for
yourself and see how many auctions there are on eBay for DVDs at
any one time. I have just looked and counted almost 300,000! At
any one time there will only be a certain number of buyers
wanting to purchase a particular DVD and if you take into account
the numerous different places there are that each buyer could
purchase from, it is likely that in general, there will be more
copies of an individual DVD available than there are buyers to
purchase them. This situation causes prices to fall. The other
factor that forces prices down is the fact that one DVD is the
same as another. By this I mean that from a buyers point of view,
there is no difference to a new DVD purchased on eBay to one
which is purchased from their local DVD store. Often the only way
to differentiate is on price and of course, the only way to make
the price more attractive to a buyer is to lower it.
The above reasons help to explain why the wholesale discount
on a new release DVD is just £1 or £2 at most ($2 or $3
roughly in the US). When you take into account the fact that the
large retail chains can purchase thousands of DVDs at a time and
receive a bigger discount than individual traders, you soon see
why it is very difficult for a small business to compete in such
a competitive industry. You simply cannot purchase new release
DVDs at 50% discount and even if you could, it wouldn't be long
before prices were forced down as there is always someone willing
to sell a little bit cheaper than the next man.
It isn't just DVDs that fall into this category. Take mobile
(cell) phones. Here in the UK you can walk down just about any
high street and get the latest phones either free or for a
minimal token payment. The stores are relying on making their
money from the line rental contract that you will have to sign in
order to get the phone. Of course, the actual cost of the phone
is not free - most new mobiles are actually worth £200 or
£300 which means that if you want to buy a batch of phones
at wholesale, you are going to be looking at a pretty high unit
cost. As with most electrical products, the market is competitive
and prices have been forced down which means that the difference
between your wholesale buying price and your retail selling price
is minimal.
There are numerous products that suffer from the same market
conditions as DVDs and phones and new/small traders really should
avoid trying to sell such items at all costs because it will
usually be frustrating and ultimately not financially rewarding.
When trying to decide what products to sell, you need to be
thinking about the type of market that a particular product is
sold in. If there are already numerous sellers and many large
companies selling at considerable discounts this is far from
ideal. The exception to the rule is if you are able to add value
in some way to make your 'offering' more unique. I wrote about
adding value last year in one of my newsletters - you can read it
here: http://www.thetraderonline.com/jul2204.html
At the end of the day, it is all about research, being
realistic and having an understanding of the market that you want
to operate in. Whilst it would be great to be able to buy and
sell new release DVDs (or whatever) all day long, doubling your
money every time, I am afraid that this is just not going to
happen.
Copyright 2005 Richard Grady
Richard Grady has been helping ordinary people earn online
since 1998. He writes a free newsletter which is published every
two weeks. To subscribe (and claim your free gifts), visit:
http://www.thetraderonline.com/newsletter.html
 MORE RESOURCES updated Thu. February / 09 / 2012
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Elizabeth Taylor auctions raise $183 millionThe Doane LineChristie's auction house says all of the 1817 lots offered sold at auctions in New York and London, some at 50 times their pre-sale estimates. The top lot was Vincent van Gogh's landscape "Vue de l'asile et de la Chapelle de Remy," which once hung in ...and more » |
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Elizabeth Taylor auctions raise $183 millionAZFamilyChristie's auction house says all of the 1817 lots offered sold at auctions in New York and London, some at 50 times their pre-sale estimates. The top lot was Vincent van Gogh's landscape "Vue de l'asile et de la Chapelle de Remy," which once hung in ...and more » |
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Mark Zuckerberg, the 100 billion-dollar manThe AgePrivate capital markets group SharesPost sadly rejected Insider's application to participate in auctions of stocks such as Facebook and Zynga on the flimsy grounds that our net worth is less than $1 million. It still, however, taunts Insider with what ... |
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Elizabeth Taylor auctions raise $183 millionabc13.comChristie's auction house says all of the 1817 lots offered sold at auctions in New York and London, some at 50 times their pre-sale estimates. The top lot was Vincent van Gogh's landscape "Vue de l'asile et de la Chapelle de Remy," which once hung in ...and more » |
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Mark Zuckerberg, the 100 billion-dollar manSydney Morning HeraldPrivate capital markets group SharesPost sadly rejected Insider's application to participate in auctions of stocks such as Facebook and Zynga on the flimsy grounds that our net worth is less than $1 million. It still, however, taunts Insider with what ... |
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