My ebay Business Strategy

The key to making enormous profits on eBay is to develop a detailed and efficient strategy long before you list your first item.  First you need to know what type of product you want to sell, where to find your niche market on eBay, and develop a profile of your average customer.  In addition, you should already have determined which categories are appropriate for your product. Now you are ready to set your strategy for the business.

I'm going to present you with a strategy that you can apply to virtually any product you wish to sell on eBay.  I will generalize the outline so you can fill in the specifics related to your own particular niche market and merchandise.

There are two types of sellers on eBay which I will call High Volume Listers and Low Volume Listers.  High Volume Listers are those who list more keep more than 10 auctions online at a time.  Low Volume Listers keep fewer than 10 auctions online at a time.

The profit margin of the product you sell determines which category you will fit into.  For example, if you sell real estate and make $10,000 per sale, you may only need to list a few properties each week on eBay to make a real killing with your internet business.  The same applies for the sale of expensive jewelry, automobiles, and other items with a large profit margin.  However, if you sell magazines or other inexpensive items you may only make $5-10 per sale.  In this case, you would need to list hundreds of items at a time to make large profits, and thus you would become a High Volume Listing. 

I know what you're thinking - why would anyone go through the effort of listing so many items when it seems so easy to list a few large items and make a fortune? The answer cuts to the heart of internet sales itself: ONLINE BUYERS ARE MOST WILLING TO SPEND UNDER $50.00 FOR A PRODUCT. This makes sense - would you pay thousands for something you have never seen?  Another reason that High Volume Listers are more common and often make more money on eBay is that it is very easy to buy inexpensive items at wholesale prices, but very difficult to buy real estate or automobiles at wholesale prices.

Armed with this information, you must consider the product you're selling and make an intelligent, informed decision on whether to become a High Volume or a Low Volume Seller.  If you have plenty of free time to devote to your new business, I recommend you opt for the High Volume option. But if you are an eBay seller at nights and on weekends, you may wish to start off with the Low Volume option until your business really takes off. Again, only you know best which option to choose based on the amount of time you have available and the profit margin of your merchandise. Once you determine what type of seller you will be, you are half-way to developing a sales strategy on eBay. 

The next step is to integrate everything you have learned so far in this manual and project your selling strategy into the future.  For example, let's assume you have decided to sell jewelry on eBay.  Here is a test case for consideration:  You have identified your niche market and found the associated categories.  You know that your buyers will probably spend $50.00-100.00 per purchase and you realize that the average profit of your auctions will be about $60.00.  You have plenty of time and your profit margin is low, so you decide to become a High Volume Seller on eBay and choose to list 100-200 auctions per week.  You estimate that 70% of your auction will end with winning bids, which is the eBay average.  Based on this prediction, you calculate your weekly income at $6300.  Using database software, you plan to keep track of your auctions and use the built-in market analysis feature to discontinue unpopular items and relist the popular ones.  You have a wholesale account set up with your jewelry supplier and have already purchased enough inventory to cover your first week of eBay sales.  You plan to relist every auction as soon as it ends and place one weekly order to fill your inventory along with one weekly outgoing mailing to your buyers.  Your basic sales strategy is set and you are ready to begin listing your auctions!

In the example above, you will notice that the seller thought of EVERYTHING before listing a single item, making sure that he/she was prepared for the task ahead and establishing a solid game plan.  Before beginning, you should project your sales strategy into the future and run through all possible problems, resolving them in your mind.  If it helps, write out a paragraph like the one above and analyze it for errors of logic.  KNOW YOUR SALES STRATEGY BEFORE YOU BEGIN.

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