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Is eBay selling the right small business for me?

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Is eBay selling the right small business for me?

If you're used to a bustling office full of co-workers or a busy shop stuffed with customers, running an eBay selling business can feel like a very solitary enterprise.

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Question: Is eBay selling the right small business for me?

eBay often appears breathlessly in the same sentence as phrases like "small busines" and "home business" or even "start your own business," implying that eBay is a great business choice for anyone wanting to exercise their entrepreneurial spirit. In fact, these days eBay is so closely associated with small business in the online era that in many cases it's become the conventional symbol for or exampe of the small business today.

Answer:

eBay often appears breathlessly in the same sentence as phrases like "small busines" and "home business" or even "start your own business," implying that eBay is a great business choice for anyone wanting to exercise their entrepreneurial spirit. In fact, these days eBay is so closely associated with small business in the online era that in many cases it's become the conventional symbol for or exampe of the small business today.

Less often considered or asked are questions about just what kind of small business an eBay small business is, and who an eBay small business is right for (or, alternatively, wrong for). Here are some facts about eBay small businesses that may help you to decide whether an eBay small business is right for you.

An eBay business is:

  • Retail. At the end of the day, for the most part eBay small businesses are about sourcing goods at a price low enough that you can mark them up and re-sell them elsewhere. You are the same sort of middleman that you would be in any other retail endeavour, and all of the standard retail tasks apply: market research, sourcing, accounting, taxes and licensing, marketing, fulfillment, and customer service. If you wouldn't be inclined to operate a retail company in any other context, operating one on eBay may not be the thing for you, either, unless eBay's virtual nature alleviates most of the problems you'd have running a retail business or eBay's unique affinity for used goods and collectible or hobbyist goods is a distinctly good match for your business idea and/or tendencies.
     
  • Time-intensive. Contrary to the popular image held by those that aren't attempting to support themselves and/or their families as ebay sellers, an eBay business is not a "set it and forget it" affair, no matter the particular eBay business model that you adopt. Even when using drop-shipping providers and/or fulfillment services, most successful eBay sellers spent the equivalent of a full-time work week every week performing the tasks outlined above. eBay doesn't behave like "residual income," with an up-front investment in time and money paying off for years to come. In fact, eBay generally can't be made to operate that way at all, no matter what you've heard.
     
  • Not risk-free. Though there's also a lot of harping on the low-risk nature of an eBay business, this advantage may often be oversold. While it's true that there are ways to operate with relatively low risk on eBay (say, while using drop shippers to avoid having to purchase and own any of your own inventory, the level of success achieved on eBay often tends to be in proportion to the level of risk one is willing to take on. Because drop shipping is less risk, for example, eBay is littered with drop-shipping sellers all selling the same products and trying to undercut each other by a penny or two on razor-thin margins. More to the point, as is always the case with retail, you're subject to complaints, chargebacks, legal action, and all of the other things that any retail shop might potentially face.
     
  • Not entirely online. Apart from the aformentioned drop-shipping methods that are often amongst the least successful and plausible on eBay for long-term results, your eBay selling business is unlikely to be an entirely virtual affair. Aside from the simple realities of packing and shipment that must either be handled by you or by whomever is doing your fulfillment, most sellers find that sourcing product and doing market research successfully also involve footwork in the "real world," and of course, there is always the need for office space and other practical non-virtual needs of the same sort to contend with.
     
  • Lonely. While this isn't universally true, many starting eBay sellers have found themselves suffering from a case of the work-from-home blues as it gradually dawns on them that—partcularly as an eBay small business—there are few or no co-workers or employees to interact with, little in the way of direct business-to-customer contact outside of email, and little in the way of person-to-person contact with suppliers and/or fulfillment partners in most cases. If working online at a screen by yourself and pounding the pavement as a lone wolf for goods don't appeal to you, then an eBay business may not be right for you. Yes, some eBay sellers cite the fabulous "community" to which they belong as eBay sellers, but by and large this community exists in message boards and via email—modes of communication and interaction that aren't for everyone.
     
  • Not a prestige win. These are no longer the days of the dot-com boom and the "new thing called the Internet," during which anyone that did anything "online" successfully was seen as some sort of cutting-edge innovator, even if they did it as a one-or-two-person small business. These days, most people understand that barriers to entry and start-up costs on eBay can be very low and that many people "sell on eBay" either as a sideline to make ends meet or as a way to clear the junk out of their house every spring. You'll thus find that there's not much of a social win in being able to say that you're an eBay seller, even if you come to make a decent living doing it, and you'll certainly struggle to make hay with it on a resumé or CV should you decide after months or years that a full-time eBay business is not right for you and you want to return to productive work as someone else's employee.

If it sounds as though this list is intended to make running an eBay business sound like a downer or a hopeless cause, it isn't. In fact, there are plenty of people for whom this list sounds just fine—people that are happy to operate a fundamentally retail-oriented business that is a full-time job, involves typical retail risks, that is both online and offline, that requires long hours of independent and solitary work, and whose payoff is in dollars, not prestige, achievement, or resum&eactue; value.

If reading this list makes you hesitate, then an eBay business may not be right for you. Maybe you're not sure you want to work in such a solitary way, preferring instead the company of co-workers and/or customers that might come from operating a more traditional, walk-in brick and mortar business of some kind. Maybe you're not sure that you're interested in something that requires a part-time or preferably full-time commitment, but would instead like to find a sideline that can be done nights and weekends with minimal commitment beyond that. Maybe you'd like to start a small business, but want something that can stand out as an achievement once it's successful, rather than simply being "just another eBay selling business" amongst hundreds of thousands or even millions of these out there today. All of these are valid positions that ought to make you think twice before going "all in" on eBay.

If, however, you got through this list undeterred, then you may be a prime candidate to have a go at making a living on eBay.

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