The Secret to eBay Business Success: Planning

The big difference between the casual eBay seller and the person running a successful eBay business is often nothing more than volume. Whether you're selling one item a month or a hundred, the process is basically the same. It's just that the professional seller has to manage a lot more activityand do so with the lowest possible expenditure of time and money. Manage this process well, and you'll have a successful eBay business on your hands.

While anyone can become a casual eBay seller, there's a lot more involved if you intend on launching a full-time eBay business. An eBay business is like any other type of businessit requires planning, organization, and a lot of hard work.

I've had a few people read the first edition of this book and comment they thought I spent too much time covering business-related information; in their opinion, you don't need to know all this business stuff to be successful on eBay. Those readers are, of course, mistakenas they'll no doubt discover for themselves in time.

Yes, it's ridiculously easy for any individual to start selling on eBay. You don't need a business degree to fill out the Sell Your Item form and create a rudimentary auction listing. You don't even need any business savvy to become a relatively successful seller, on a small scale. But when your sales start escalating, you need all the business skills you can muster to manage a large volume of transactions, and to keep the slim profits you generate from turning into losses.

Put another way, it takes planning to launch a successful business, organizational skills to grow the business, and business savvy to stay ahead of the competition and keep your business in the black. While anyone starting out can be lucky, luck alone won't keep you successful over the long term. I know too many former eBay sellers who had a nice ride at the beginning, but didn't have the skills necessary to turn their initial success into a profitable continuing business.

Planning for Success

To that end, I encourage anyone who is considering launching an eBay business to take their time, do their homework, and not rush into things. It's okay to get your feet wet by running a few (or a few dozen) auctions, but make sure you've thoroughly thought through what you're doing before you start buying bulk lots of merchandise for resale. As much as I'd like to tell you how easy it is to get rich quick on eBay, success definitely is not guaranteed.

Success is, however, more likely when you do your planning beforehand. What type of planning am I talking about? Here's a short list:

• Research sales across a variety of product categories to find the right merchandise to sell (covered in Chapter 2)

• Think through your business goals and write a short business plan that outlines what you want to achieveand how (covered in Chapter 3)

• Evaluate how much money you'll need to get started, and figure out where you can get that money (covered in Chapter 4)

• Determine what type of business entity you want to createa simple sole proprietorship or a legal corporation (covered in Chapter 5)

• Set up a complete recordkeeping system, including both inventory management and accounting (covered in Chapter 6)

• Determine how much physical space you'll need to manage your eBay salesincluding inventory storage, packing and shipping, and your home office (covered in Chapter 7)

As part of this planning, you need to work up a sales projection for your first year of business, along with a budget of your expenses. You should also determine how many hours per week you'll need to put into your businessas well as any employees you might need to hire to help you out.

Choosing a Business Model

As part of the planning process, you have to determine what type of eBay business you want to run. After all, not every eBay business operates exactly the same. With a half-million businesses making a living on eBay, you know that there are a lot of different ways to proceed; there's no one "right" way to run an eBay business.

What kinds of eBay businesses are there? I like to organize the different business models as follows:

• The Second-Hand Reseller, who buys a variety of used merchandise and resells it to others (covered in Chapter 8)

• The Collector/Trader, who buys and sells on eBay as an extension of a collectible hobby (covered in Chapter 9)

• The Bulk Reseller, who purchases large quantities of closeout or liquidated merchandise and resells it one piece at a time (covered in Chapter 10)

• The Retailer, who resells new goods purchased direct from the manufacturer, just like a traditional bricks-and-mortar retailer (covered in Chapter 11)

• The Manufacturer/Craftsperson, who creates the items he or she sells to eBay buyers (covered in Chapter 12)

• The Trading Assistant, who sells items on consignment for other people (covered in Chapter 13)

Each of these models, as different as they are from one another, is equally viable. Which you choose is entirely up to you.

Making It Yours

Now we come to one last point about launching your own eBay business. Most successful eBay sellers aren't in it just for the money. The best business-people sell what they do because they like doing it. There's no point at all in setting up a business in which you have little or no interest. You'll be more successfuland lot happierwhen you build your business around something you're familiar with, and something you like. Anyone, after all, can sell paper clips; but only you can create a unique business based on your personal interests and strengths. Researching "hot" categories can only go so far; your final decision needs to be made with your head and your heart.

With that in mind, read on to learn how to research and launch the type of eBay business that's best for you.