Tuesday, July 04, 2006

Ebay possible way to get right?

Tricky Business

For those eBay sellers who don't trade in expensive goods, the path to riches is likely to be much tougher, maybe even impassable. Hitting the jackpot depends not only on the amount of time seller put into the effort -- which, by many estimates, is "every possible second" -- but also on how they manage inventory and budgets.

To succeed in making a living selling on eBay, one has to go into it with eyes wide open, says Joe Kennedy, author of "The Small Business Owner's Manual." Kennedy advises a number of eBay sellers and sells a modest number of items himself.

"There are those who get rich on eBay, but there is also more smoke than fire," he says. "What I've found is that if you're a buyer, you can get incredible deals, but the flip side of that is the sellers have to sacrifice to offer them. There are a lot of people working really hard and not making much money. The kicker is that they don't really realize it."

Although it seems odd that sellers would be unaware of losing money, Kennedy notes that it happens frequently, because of the way the system is set up. Sellers might turn over a healthy amount of inventory, get it shipped quickly, and have the money in their accounts promptly, but the level of detailed bookkeeping necessary can give sellers a skewed view of their operations. They might look like they're headed toward riches on paper, but in reality, it could be the road to the poorhouse instead.

"Some work like dogs, and they figure that because they're working so hard, they're doing really well," Kennedy says. "But the fee structures are complex with credit card services and auction management, and it could be that they're losing just a little bit of money on every deal. It happens far more often than most people think. EBay buyers wonder how people can sell things for so cheap, and the answer is: They can't."

To pocket a nice amount of revenue, a PowerSeller has to have access to good products at good prices. While that seems obvious, it's certainly not easy, says Kennedy.

"So many people are scavenging and undercutting each other," he says. "The sellers are a strong community, and support each other, but one thing they won't tell each other is where they get their products."

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