Earning money with eBay, where’s the margin?
So a friend of mine recently mentioned that he wanted to get into eBay as he heard it’s a really good way to earn money online (him along with rest of world). So at a basic level what most people on eBay are doing is buying stuff locally and then selling it nationwide with the hope of making a profit. This in itself isn’t a revolutionary concept but there are a few key things eBay does really well:
- They have the site/system already built. All you have to do is upload the details of your products and they handle the rest (all technical stuff). You don’t have to worry about building your own site and taking credit cards and all that involves.
- They provide the customers. Ok so you can advertise your eBay listing on your own site or in other places but most of the sales are going to come from people browsing eBay and finding what you have to offer. Don’t underestimate this bit because attracting customers is one of the hardest things to do online, there’s a lot of competition out there.
- Trust rating/system. If you have a new site it’s really hard to get people to trust you and even harder to get them to hand over credit card details, after all you could be anyone! EBay provides a great system for customers to view the history of a seller and what other customers thought of them. It’s a great system that allows small sellers to compete with the big retailers. I will trust a small seller with over 1000 positive reviews over a big retailer any day, they have much more to loose by providing bad service.
So on the face of it earning money with eBay should be easy right? Well not really actually, even with all these benefits the margin on selling stuff on eBay is terrible. For a start you have all these little costs that eat into your profit:
- Listing fees
- Final value fees
- Payment processing fees (PayPal/visa etc)
Don’t forget you still have to post whatever it is to the person, the whole thing seems like a massive headache to me so far. Here’s the biggest problem though, the margin you can make on most items is really low, around 5% – 10%. I know there’s lots of stories about people becoming millionaires via eBay but it seems to me the only way to do it would be sourcing a product that’s not readily available in a local market and adding a big margin. If you’re trying to compete with 100 other people selling the exact same thing you’re going to be haggling with other sellers to see who can do it £1 cheaper.
To me the eBay idea is great if you really don’t have a clue at all about the online world and you just want them to handle everything from the website to the marketing. But realise they are going to take a big chunk of whatever you earn for doing this. Also realise that they directly list all of your competitors right beside you every time someone searches for what you’re selling, eBay doesn’t care about your business on an individual basis, only the collective success of their site.
The problem for someone like me when I look at eBay is that I just see how much easier it would be to do all of that stuff myself:
- Out of the box ecommerce solution like oscommerce
- Take payment with PayPal (no need for merchant account I think?)
- Some proper marketing of your site with SEO and PPC
The last point is probably a little over simplified but it is possible to do with time and effort. Once your there though and your generating your own sales on your own products you will realise how much bigger your margins are going to be.
So that’s all I have on the eBay thing, I have a feeling my friend is probably going to just plough ahead anyway, he’s stubborn when it comes to money like other people I know 
Find that secret niche to make millions online
One mistake that I see new people to this business making again and again is picking the wrong niche to enter into for their new website or blog. You see one of the main thought processes that people have is that you should write about what you know and/or are interested in. It’s a good idea in principle but the problem is that so many affiliate marketers are of the same demographic i.e. male between 18 – 35. So what you end up with is a million thin affiliate sites all trying to sell iphone accessories or sports equipment. If you do start your business around one of these “traditionally” male tech/sports products you’re going to be competing with all these other people who also failed to think outside the box and 99 times out of a 100 you’re going to fail.
Now I know trying to think completely out of your own experience’s can be very difficult but trust me that the time spent are the start trying to find that untapped market can be recouped many times over down the line. Another big plus of the untapped market that no-one else is noticing is you can be completely under the radar for months (and even years) before people realise just how much money you are making. Indeed it is some of these more “boring” industries that often allow their owners to earn the most over a short period of time. So i suppose you are thinking just what kind of markets/sectors these might be? Well of course I’m not going to give away the farm in one post but here are a few sectors to think about.
- Make-up
- Clothes
- Shoes
- Office equipment
- Packaging
Ok so as you can see not very exciting but when it comes to earning an income online it’s the more boring the better in my opinion. So your also probably thinking at this point what kind of niches should you stay away from? Here are a few sectors that have ruined many an affiliate marketers dreams 
- Iphones (or anything apple)
- Electronics in general
- Books (you know amazon does this right?)
- CDs (heard of mp3s?)
- Poker
- Loans
- Personal injury
Yes some of those niches are worth huge amounts of money, ie ranking on Google for something like “Personal injury claims” could be worth over £1000 a day just in commission. However most people get blinded by these kind of numbers and just forge ahead without evaluating the situation. Most of the sites in the niches above will literally have teams of people working full time on every aspect of SEO and not just to get the site to the top of the serps but to make sure it stays there. This doesn’t mean there isn’t huge amounts of cash in other sectors too (there is) it’s just not as glamorous and in most cases harder to find.
So how to you find this new niche that’s going to make you millions? Well the two keys are both patience and awareness. Anytime you’re searching the net for something (especially if it’s a gift for someone else) you should have seoquake on and have a quick glance at the competition in this market. After a while this will just become an automatic thing and before you know it you’ll be accessing the competition every time you fire up google, it can become a bit time consuming I have to admit but it will be worth it.
I must also mention that it’s not just markets that have little or no competition that you may want to start in, you also want to enter a market were you can offer something way better than everyone else. One of my favourite bloggers is Allyn Hane over at blogger illustrated who talks in some of his (slightly crazy) videos how he started a blog in the DIY niche. The thing about his blog was that he could offer real reviews on DIY hardware and not just the generic product descriptions that you get on most ecommerce sites. The best thing about his blog though is that he sold it for $30,000 to a venture capital firm, now that’s some serious cash!
So there you have it my advice on how to think outside the box (a little bit) in order to earn some real money on the internet. Until next time my digital peeps
