How To Make Money On eBay: A Complete Guide
Da'Vonne Duncan11-Minute Read
December 03, 2021
eBay is recognized as one of the best marketplaces to make money online. Millions of buyers and sellers connect daily on eBay, making it a great place to start a side hustle from home, grow a scalable business or just resell items that you no longer use around the house. Whatever you decide to use eBay for, it can work for you with little to no investment.
If entrepreneurship appeals to you and you want to learn how to make money on eBay, keep reading because we have a lot to cover.
Why Sell On eBay?
In 1995, Pierre Omidyar sold a broken printer to Mark Fraser for $14.83, when he listed the printer on Auction Web for $1. The printer was on sale for one week, until a bidding war drove up the price. 24 years later, the platform, now known as eBay, is a multi-billion-dollar online marketplace responsible for $26.6 billion worth of successfully closed transactions in 2020 alone. Besides successful sales, let’s review the other benefits eBay has to offer:
- Large user base: On eBay, there are 154 million active buyers worldwide and a total of 1.5 billion active sellers, according to the company’s website. This e-commerce giant has a steady stream of buyers constantly monitoring the site, who are ready to buy. And, thanks to their mobile app. eBay has made buying and selling even easier.
- Low cost: There are two types of fees sellers must pay to eBay. The insertion fee, also known as the listing fee, is the upfront cost eBay charges a seller to place an item on sale. The insertion fee depends on the type of item and listing. eBay also charges the seller a variable fee when an item is sold, known as the final value fee. According to eBay’s website, “the fee is calculated as a percentage of the total amount of the sale, plus $0.30 per order. The total amount of the sale includes the item price, handling charges, the shipping the buyer selects, sales tax and any other applicable fees.” However, you’re able to save up to 50% on final value fees and limit insertion fees by selecting a store subscription, whether you’re a casual seller or have a business. For a basic store subscription, you can have 1,000 free fixed-price listings per month and $0.25 insertion fees for additional listings. A basic store subscription is $21.95 per month.
- It’s fast: Once items from your auction have sold, you can expect payment within a week.
- Wide selection: eBay offers items that can be used day to day, as well as unique products that buyers wouldn’t be able to see on other e-commerce sites.
To make more payment options available for buyers, eBay acquired PayPal in 2002. This is what boosted eBay to be an industry leader, as PayPal’s functionality improved the user experience on the platform.
What Can I Sell On eBay?
Eligible sellers on eBay can list a variety of items for sale as long as the item is not banned, recalled or considered dangerous to the buyer. Typically, people sell clearance items, used goods and auto parts. eBay has a product safety policy for sellers to help them follow key government regulations. Even though you have limited freedom to sell what you want, it’s important to stay informed on trending items, or items that are in high demand.
Trends on eBay can help you decipher what people are buying and the latest deals. Luckily, they’re easy to find. If you go to eBay's homepage and select daily deals in the top left-hand corner, you’re able to see trending deals on items that are the most popular. Keep in mind, trending items are subject to change. Top categories include:
- Jewelry and watches: Watches, engagement rings, fine earrings and rings
- Computer, tablets and networking: Printer ink, toner, printing paper, video card, PC laptop and replacement parts
- Cellphones and accessories: Cellphones, smartphones, replacement parts, cases and headsets
- Video games and consoles: Video game merchandise, video games, and video game consoles
- Clothing, shoes and accessories: Men’s clothing, men’s shoes, women’s handbags, women’s clothing and shoes
- Cameras and photos: Lenses, digital cameras and film cameras
- Health and beauty: Fragrances, anti-aging products, vitamins and minerals
- Music and Movies: Music records, DVDs, Blu-ray discs and music CDs
- Automotive: Car audio, car and truck parts, as well as car electrical components
Consider researching trending items in your eBay business because understanding the longevity and success of a product can help you analyze what products you might want to sell while helping you understand your competitors and customers. Think about reading your competitors' reviews to help you reveal their product's pitfalls, what customers value in a product and learn how to avoid shipping issues when it’s time to list your product.
If you're unsure if you can sell your product, be sure to review the site's list of prohibited and restricted items before creating your listing.
Steps For Making Money On eBay
The best way to get started with eBay is by doing research to help you become familiar with the platform and accustomed to finding popular items. If you’re leaning toward committing to a business, you might want to consider using the eBay business account option. If you’re not sure you can handle a full-blown business, sign up with a regular eBay account.
We’ll go over other necessary steps to help you complete your registration.
1. Research Previous Listings
Before listing your product, it’s important to research similar listings to see the kind of market you’re working with. By doing this you'll see how the market affects your product, which will help you navigate your plan to sell. To check out previously sold listings, the first thing you need to do is search for a specific product using 3 – 5 keywords. When the results appear, hover over the left menu, scroll to the bottom, and click on completed listings. You’ll be able to view pricing, condition, quantity and other information for similar items that have already sold.
2. Create Your Listing
When listing your item on eBay, you’re required to provide information about your product. In a typical listing, a seller will have to include a title, photo, price, description, payment method and shipping information. Let’s go over the different elements of creating the perfect eBay listing.
Set Your Price
This involves choosing a starting price and pricing option that makes the most sense to help you get the price you want. Below are the pricing options available to sellers on eBay
- Auction style: In an eBay auction, the seller selects a starting price and buyers place bids, if interested. According to eBay, you should have your auction run for 1, 3, 5, 7 or 10 days. Sellers may be charged an insertion fee.
- Buy It Now: This is the simplest method to price an item on eBay. It allows your customers to make an instant purchase. For a fixed price listing, a buyer knows exactly what they must pay for your product and can pay for it immediately. When adding a Buy It Now option to an auction, buyers can purchase your item right away or place a bid. Keep in mind, the Buy It Now price needs to be 30% higher than the auction price.
- Reserve price: This is the lowest price you’re prepared to sell your item for. If the reserve price isn’t met, the item won’t be sold. You don’t have to list the reserve price in your listing, however, and can adjust the price throughout the auction period depending on current bids.
Keep in mind, when you set a price, fees will apply, such as sales tax, cost of shipping and income tax. eBay charges sales tax to comply with marketplace facilitator laws and they vary by state.
Add Quality Photos
Having images that are good quality and evenly lit can help you sell your item. Include images that are large and clearly show the product. Don't worry about having a quality camera, mobile phones work just fine. eBay even offers picture services to help you enhance your photos. eBay recommends the following picture taking tips:
- Background: eBay recommends setting up your item against a neutral background. If you’re taking a picture of jewelry, a black background may work best.
- Avoid using flash: A flash can cause shadows, reflection and grayness.
- Use a tripod: This can help keep the camera steady for sharper photos. If you don’t have a tripod, put the camera or phone on a flat surface and use the timer feature to minimize motion.
- Capture all angles: Photos of an item should be taken from the top, bottom, and sides with detail close ups. Include pictures that show scratches or imperfections of your product, so the buyer knows exactly what they're getting.
- Avoid stock photos: Stock photos prevent the buyer from seeing actual images of the item. Therefore, buyers cannot see the wear and tear if the item has any flaws.
- Have at least 500 pixels: Sellers should aim for 800 – 1600 pixels for the best quality.
eBay allows sellers to post up to 12 images for each listing.
Craft A Perfect Product Description
When making a product description, always remember the importance of “searchability” so the eBay algorithm can put products in front of the right buyers. After all, buyers typically find items based on their titles, so take the time to write a good one. Create a listing that is concise, complete and descriptive of your product.
Be sure to review eBay’s creating a listing step-by-step guide on the help page, to assure buyers have the basic information needed on your product. If a seller is unable to finish a listing, they have the option to save it as a draft and complete it later.
3. Promote Your Products
Promoting your listing can give the items you’re selling greater exposure. eBay offers Promoted Listings campaigns for different types of sellers, to help you get your product in front of more buyers. And you’re only charged if your item sells.
In 2020, eBay Promoted Listings generated $137 million in revenue, that’s a 109% increase compared to 2019. eBay advertising helps sellers by getting their items in front of millions of active buyers when they’re searching for products and increases sales if used effectively. It also allows you to customize ads based on a budget and gives you the option to increase or lower your budget at any time. However, sellers will not be charged until their item is sold.
One of the benefits of eBay advertising is making sponsored listings more visible. eBay achieves this by having promoted items take up the first five positions in the search results. This means organic listings will practically become hidden and lose importance. So, deciding to promote with eBay might be a great idea for businesses to keep their listings prominent. To be eligible to use Promoted Listings you must meet the following criteria:
- Have a seller level that’s Above Standard or Top Rated and have an established sales history
- This listing has a fixed price
- The product is in any category except for vehicles, real estate, or travel
While eBay ads can help with sales, that isn't the only useful tool to help you gain sales.
Remember that your buyers aren’t just on eBay, they’re on social media too. Businesses saw an 89% increased market exposure due to social media. So, it might be a great idea to use various platforms to let potential buyers know that you’re up and running on eBay. look to promote your products where buyers already are, like Facebook, Twitter and YouTube.
Promoting your item on social media is easy. On every listing in the right-hand corner are social media icons. Once the listing is live, you can use those icons to post directly on your social media.
4. Ship Your Products
As the seller, you can pick which shipping options you want to offer to your buyers when making your listing. Whether you use the business tool or a quick listing tool shipping options will be slightly different.
- Shipping for quick tool: On the shipping page, you can choose whether you want to offer local pickup or ship your item. You either select a fixed price or eBay can calculate the cost for you based on weight and dimensions, then you can pay the shipping cost yourself.
- Shipping for business tool: The business tool offers more options for domestic shipping such as local pickup, freight for bulky items, a flat rate for all buyers or calculating the cost by location. eBay provides a shipping calculator to help you predict what USPS may charge.
Keep in mind, the buyer pays you to ship and shipping fees are included in the cost. For example, your item could cost $10 and shipping is $5, so the buyers pays $15 in total. You could also offer free shipping, which will combine the shipping fee into the total cost of the item. So, the buyer will still be paying $15 altogether, but they won’t see the cost breakdown of the $10 for the product and $5 for shipping. Sellers can use the United States Postal Service (USPS) to pick up eBay sales directly from their home or business. Packages must be prepaid and have labels on them. If sellers are dissatisfied with the shipping service, they do have the option to change mail carriers.
5. Restock And Begin Again
Sellers may think product sourcing can be difficult, but it’s easier than you think if you know where to look. If you're interested in finding products locally, consider going to flea markets, thrift stores and street vendors in large metropolitan areas. When selling inexpensive import merchandise from a vendor, take caution to make sure you’re not selling counterfeit items. Don’t forget you can even find items around your house or make them yourself, such as crafts and eBooks. However, if you want to search for products on the web, think about Amazon as a source and not competition. Amazon has hundreds of markdown items, making it a great opportunity to resell products and have great margins. Once you found your products, it’s your responsibility to restock when needed, this is crucial for product-based businesses.
Not managing your inventory properly can lead to loss of revenue and customer relationships. When a buyer wants to place an order and there's no inventory available to them, the customer will take their business elsewhere. After all, they need your item and you can’t provide it for them. If your inventory is not up to date, customers may get frustrated when they try to buy an item and find out it’s out of stock.
Pricing also plays a big role in maintenance. It’s not best practice to sell your item too low, as this may cause a rapid decrease in your inventory if your product is in high demand. Vice versa, you don't want to sell your item too high since you can have a surplus. Therefore, some sellers may bundle their high-selling and less popular items together, which is useful when you have overstock items and want to make room for other products.
Another thing to consider is using software solutions, as your business grows your inventory might be more difficult to manage. The right software solution can help you sync inventory data to multiple devices and help you track sales, product numbers and restocking needs.
Keeping up an eBay business also means organizing your products physically. You may want to place your items in labeled bins, so they're easier to find when photographing, packing and shipping.
6. Provide Customer Service
The foundation of any business is excellent customer service. eBay should be no exception. The lack of customer service doesn’t just mean bad reviews and low sales, it could mean having your account restricted or suspended if seller performance standards are violated. Here are some customer service tips to keep in mind:
- Keeping open communication and being available.
- Uploading tracking information.
- Shipping products in a reasonable timeframe.
The Bottom Line
Making money on eBay is possible! Most buyers and sellers are drawn to the e-commerce giant because it offers diverse products that might not be available on other online marketplaces. But don’t expect to be a millionaire overnight. You must do research, put in the effort, provide outstanding customer service and have patience to see results.
Learn more about making more money and keeping up personal finance habits through the Rocket HQ℠ Learning Center.
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