Selling on Ebay: Twelve months on

There has been a lot of debate recently about how on-line retailers are hurting established retailers. My wife decided last year that she had had enough of her job so she quit and started trading on ebay. Twelve months later, and she is still trading, and I thought it would be a good opportunity to share what she (and I) have learnt.

Copyright

Not long after she started, she ordered a shipment of a popular brand of exercise DVDs. They looked completely legit (not pirated), and we were able to sell them a lot cheaper than the same brand in the major stores, and still with a large mark-up. Within hours of listing them we had sold at least 10 box sets, and we were already ordering more and planning how to spend the small fortune we were making. It was too good to be true. A day after we listed them, we got a blunt email from ebay, saying some lawyers from the copyright owner weren't happy, and our listing had been cancelled. I thought it was unfair, because I believed the DVDs were genuine, and even if they weren't, how could the copyright owners know from an ebay ad? But I did some research, and I found it is illegal to import any copyrighted material into Australia without the copyright owner's permission. So they had us on that even if the DVDs weren't pirated. So we ended up refunding our small fortune to the buyers, and dumping a load of DVDs at the tip. We never heard again from the lawyers :-). We're staying away from copyright items now.

Buyers

We have found that 99% of ebay buyers are great people, and when you communicate honestly with them they will really appreciate it, even after something has gone wrong. The other 1% threaten you before they've even paid for their item.

Freight

We always send our parcels with Australia Post, and rarely have any problems. Once we sent a kitchen utensil in an envelope, and the recipient received a note from Australia Post that the item had been destroyed because it got jammed in their sorting machine, and they said it was our fault for not packaging it correctly. Once the post office stamped over the address, and then the postman couldn't read it, so it got returned to us. But out of all the items we sent we've had a pretty good success rate.

Buying unique items to sell

I thought it would be a good idea to find stuff on ebay that is poorly advertised, and buy it with a low bid at auction, and then resell it at a higher price. It certainly is possible, but is time consuming, because you have to prepare an ad for each item, and the most you can sell of it is one. It is much more time efficient to have a small range of products, but buy them in bulk, because then you can write a small number of ads, and potentially sell a large number of items.

For example, we bought a bulk lot of assorted women's underwear, and it worked out to 50 cents a piece, and we were able to sell them for $5 a piece. It sounds great, but because each piece was unique we had to photograph every single one, and write a separate ad for every piece.

Buying in bulk

We have done most of our buying through two web-sites that connect suppliers in China with retailers. DHGate and AliExpress. We have checked the customs rules about importing, and found that no import duty is payable if you import goods worth less than $1000, so we always keep our purchases under that amount. Sometimes there is language difficulties with the suppliers, but if you keep your messages simple they usually understand. Keep in mind that if you ever have to ship something back to them (e.g if the order is wrong), it will cost a lot more than the cost of shipping to Australia.

I recommend stocking items worth between $50 and $200, because any less and you will not make enough to justify the time you spent advertising and sending it, and any more and your customers will ask a lot of questions, and expect support from you to use whatever it is you've sold them. I borrowed that pearl of wisdom from Tim Ferriss's book.

Ebay fees

Fees work out to be nearly 10% of every sale, when you count the listing fees, the PayPal fees and the final value fees.

Conclusion

Selling on ebay can vary from a hobby to a big business. The key success factors are having the confidence to seek out wholesalers and negotiate with them, choosing your stock carefully, and having the flair to write a good ad. It can be enjoyable and challenging or it can be a chore, it just depends whether you have a passion for that type of work.