How to Become a Second-Hand Reseller

If second-hand reselling sounds good to you, what are the next steps? First, I advise you to dip your toes in the water before you make a final decision. This step is particularly easy with this type of business, because you probably have lots of stuff around your house that you can sell on eBay. Take a half-dozen items and put them up for auction. Work through the entire process to get an idea of what's involved. See if you really like it.

If you do, you need to do a little planning. Take another read through the chapters in Part 1 of this book, "Planning and Launching Your eBay Business." Do some research about what types of merchandise are hot and what aren't, put together a short business plan, evaluate your funding needs, start up some sort of recordkeeping system, and have a talk with your accountant. Think about how much space you need to store your inventory, where you'll do the packing, whether your home office is sufficient for all your auction management tasks. In short, get ready to go big time.

Then you need to get into bargain hunting mode. Figure out the best sources of second-hand merchandise in your area. Locate the flea markets and thrift stores. Find out where people advertise their garage sales and yard sales; learn how estate sales work. Get smart about identifying merchandise with high resale potential.

And when you're done with all this preparation, just turn the key. Start buying, start listing, and start selling. This is an easy type of business to start small and then ramp up as you get more experience. You don't have to plan on selling $2,000 worth of merchandise your first month. Go easy until you're comfortable with what you're doing, and then start doing more of the same. That's how little businesses become big ones.

Seller Spotlight: clact

eBay seller clact is, in reality, Martin Adamo, a 40-year-old CPA and investment advisor, and his wife, Cheryl, who works as a controller at a mid-size business. Martin owns his own accounting firm and, with Cheryl, runs an eBay business that specializes in reselling secondhand merchandise. Their eBay store, shown in Figure 8.1, is called Once Upon a Bid (stores.ebay.com/Once-Upon-A-Bid/).

Figure 8.1. Martin and Cheryl Adamo's eBay Store, Once Upon a Bid.

Martin and Cheryl got started selling on eBay in January of 2004. Under the clact ID, they sell a variety of items on eBaybooks, collectibles, toys, games, and "Funny Friends," a line of stuffed animals made by Cheryl's employer. They find merchandise to resell at a number of different places, including local flea markets, thrift stores, book sales, and discount stores.

In addition to selling on eBay, Cheryl is an eBay educational specialist. She teaches the "Basics of eBay Selling," "Beyond the Basics," and "Basics of eBay Buying" courses in the Greater Wallingford area, near New Haven, CT. (You can view information about Cheryl's classes at clact.poweru.net.)

Martin and Cheryl believe that it's best to have many sources of items across many categories, in order to have maximum flexibility. They've found that by offering a lot of different items, they can get a feel for what people like or are looking for, and if it does well, they tend to do more of that type of item.

The initial cost of the item is also a consideration. Martin says that they get the best return with items that cost very little to acquire. For example, he once acquired a used book for $1 and resold it for $70. As Martin states, "Things acquired for less than two dollars account for much of our profits."

Most months Martin and Cheryl list 350 or so items for auction. Their sell-through rate is typically in the 40%60% range, although some categories achieve sell-through of 80% or more. They've been averaging close to $2,000 each month in revenues.

I asked Martin about his most memorable sale, and he related this story:

"Back when I first started selling, I would sell to U.S. customers only. I received a very nice email from a fellow in Holland. He was beaming that he just found a book I had in the listings while browsing, titled Hope for the Flowers. He had remembered and wanted this book for years, but could never think of the title or author. He saw the gallery picture and was excited and wanted to know if I would ship to him. I did, and he was particularly happy that the book had an inscription from one person to another in high school about love, he thought that made the book special."

The Adamos' advice to other resellers is simple: Read and research. As Martin says:

"I read almost all the new books on eBay selling, I also read a few of the e-books sold on reputable sites. I learn something from almost every book or e-book. These little things add up to success in the eBay world. There are many excellent books out there. Also, I read and research other sources of information as much as possible. I strongly recommend that new sellers buy a few books (which can later be resold on eBay, as they sell well) and make at least a brief business plan before launching their sales."

All that research has certainly paid off for Martin and Cheryl, who are now eBay PowerSellers with a solid red-star feedback rating. You can read more about Martin and Cheryl's eBay experiences on their blog, The Incredible World of eBay (worldofebay.blogspot.com).