eBay is often cited as a good way to start a home-based business. And there are several models of an eBay business. This post looks at two of the primary models: Consignment and Reselling.
Consignment on eBay is where you sell other people’s stuff for them and charge them a commission fee. eBay consignment really took off a few years ago and some might argue it’s run its course.
I am not a big fan of consignment selling on eBay for 4 reasons. The first is that consignment selling requires you continually find a stream of clients to sell on behalf of. Secondly, most consignment clients are going to be one-job clients as opposed to repeat clients. This isn’t always true (think taking on churches or other nonprofit organizations as clients) but in general people don’t consign out their stuff very often. Also the work associated with continually finding those clients is a consideration. Third, because you will be selling a potpourri of products, you will be creating new listings for nearly every product you must sell on eBay. Very seldom will you sell the same thing twice and that adds up to a lot of unique work. Fourth, in eBay consignment selling, you have clients AND customers to keep happy. Not only must you keep your consignment clients happy but you will have eBay customers to attend to.
Reselling is purchasing items (usually wholesale) and marking them up for resale on eBay. None of the issues associated with consignment exist with reselling. You don’t have to worry about clients and the work involved in finding them. That leaves you more time to focus on providing exemplary service to the eBay customers. Also in this model, you can do the work for an item once and re-use that work over and over again. Say for example you sell a particular brand of kitchen timer. You only need to write one listing and take one set of photographs – then you just re-use the work over and over again. That’s called leverage which is hard to get with consignment selling.
The downside to reselling is twofold. One is that there is significant work involved in finding the niche products that will sell profitably on eBay. The second is that you generally must keep a stock of those products you intend to resell. This makes it difficult to keep this model in the context of a home-based business. But if you can overcome these two obstacles, reselling can make sense on eBay
So if you are considering eBay for a home-based business, give some thought to the type of model you will use. For information on choosing the right products and finding wholesale suppliers for eBay, check out the Auction Research System!