Selling products on eBay is a great way to make extra money or, for those able and willing to dedicate their efforts full time, a solid income. But before you quit your day job or invest serious money into an eBay business, it is a good idea to draft a business plan, just as you would with any other entrepreneurial endeavor.
Prior to putting pen to paper, there are a few important questions to ask yourself. How much money do you want to make? How much time can you invest in your eBay business? And what will you sell?
If you have an existing business, either online or offline, you will already have a good idea of what you want to sell. But if you don’t, you will have to decide what you will sell and how you will make your eBay business specialized so that you are not just selling “stuff.”
What you sell will determine much of your business plan. For instance, you may have an extensive collection of coins and wish to sell them to other collectors. Your business plan will detail how you will conduct your collectible coin business. Once you have narrowed down your product offering, you can begin conducting market research.
Market research serves many purposes. Analyzing your target customer base to gauge interest and demand in your product can help determine if your business idea is worthwhile from a financial standpoint. In addition, if you are seeking investors or financial assistance for your eBay business, you will need to convince potential investors and lenders that there is sufficient demand for the products you want to sell.
Then you can focus on your actual business strategy: how you will conduct your business day to day. Write down how you will procure goods or manufacture them, how you will list them on eBay, what prices you will charge, and how much profit you expect to make on each sale. You will need to outline your organizational and operational procedures in your business plan, stating how you will create listings, how you will store and manage your inventory, and how you will fulfill (pack and ship) your merchandise to buyers.
Once your market research and strategy are done, you will be able to generate some financial information, including income projections. You will have to determine whether the amount of money you want to make is attainable for the business you have chosen. Be sure to factor in how much you will spend on procuring supplies, products, or manufacturing. Only then will you know your true item cost. If your expenses are too high to make the business concept viable, you’ll need to retool your plan.
You must also decide how much time you are able and willing to devote to building and maintaining your eBay business. Unless you can devote eight hours a day, five days a week, your eBay business will be a sideline.
Your business plan should include a financials section, covering your financial position, how much money you will need to cover expenses involved in procuring, constructing and storing merchandise, and any earnings projections. Your business plan should be logical and organized with subheadings. Any element that affects how you will do business should be included in your business plan. Once you have everything down on paper, take some time to analyze it so that you are confident and comfortable with your business idea and its probability of earning revenue.