How to Choose an eBay Business Model (cont'd)

Business Model: Local Goods, Crafts

How it works: The idea behind this model to identify in your local region or your personal network of contacts a set of unique goods, crafts, products, or services that nobody else on eBay offers, but for which demand exists. Though sales volume is lower with this kind of business, margins are often much higher once you’ve identified such product(s) and developed a stable supply chain for them.

Problems: It’s entirely possible to run a business like this with zero inventory and very little overhead. Instead, your problems are likely to be the in the opposite direction—finding product(s) to sell in the first place and then, and perhaps much more critically, finding a way to ensure that the supply of such products is stable, exclusive, and able to grow with your needs as your business grows.

Potential for success: High. If you’ve chosen well and a market exists on eBay for the goods in question, your business will be poised for steady, stable growth and will be relatively well-protected against other sellers, who won’t be able to quickly duplicate your supply chain in response to your success.

Business Model: Hobby and Specialty

How it works: Using your hobby or area of special expertise, you slowly build up an inventory of unique or expertly collected/assembled goods and a body of very loyal customers who are fellow enthusiasts. Sourcing often isn’t a matter of wholesale and large quantities, but instead of tracking down hard to find items, tools, or components, often reconditioning, refurbishing, or assembling them, and then selling them as top-grade or entirely unique items to specialty buyers on eBay. The real products that you’re selling are your expertise and ability, which allow you to offer enthusiast goods that are rare, unavailable elsewhere, or unsupported elsewhere.

Problems: The most basic problem with this kind of eBay business is that either you can do it or you can’t. Whether the business is comic books, baseball cards, antique cameras, vintage Italian car parts, or Star Trek paraphernalia, the knowledge required to be successful at this kind of business must be built over a lifetime. Beyond this, there is once again the issue of sourcing. For many serious collectors or hobbyists who routinely pound the pavement visiting estate sales, old warehouses, thrift stores, antique stores, auctions, and specialty manufacturers and dealers, this is already a part of life. For others, however, the work involved is a very new wrinkle on their hobby—and one that may not be entirely welcome or feasible.

Potential for success: High. If you have the needed knowledge and dedication and can earn the respect of the enthusiast community you’re targeting, this is one of the most stable eBay businesses going. It's also one that can be taken with you if you ever decide to leave eBay, thanks to the often fierce loyalty of the kinds of customers involved. If you don’t already have a hobby, however, this business probably isn’t for you.

Business Model: Brick-and-Mortar eBay

How it works: If you already have a “real” (otherwise known as “brick-and-mortar”) store, shop, or business in the offline world, simply add eBay selling to it in some way. For consignment and buy-sell-trade stores, this often takes the form of listing the best of your in-house goods on eBay as well. If they sell in store, you cancel the eBay auction. If they sell online, you pack them up and ship them out. For others, eBay becomes a convenient place to liquidate overstock and unsold seasonal goods. For still others, the model is the inverse of all the others here: eBay becomes a sourcing avenue for goods to be sold locally to buyers that don’t shop online.

Problems: The biggest problems here are logistical ones—the trouble involved in adjusting your bookkeeping, inventory management, labor, and other business areas to include eBay as a new facet of your business. You’ll also have to pick up the speed with eBay; the online world moves much more quickly than the offline world, and some traditional sellers have trouble adjusting to the customer service and expedited processing expectations of eBay shoppers. There’s also the biggest problem of all: if you don’t already have a brick-and-mortar store, there’s no way to add eBay transactions to your brick-and-mortar business model.

Potential for success: Medium. At the end of the day, the chances for success here depend on two things, only one of them fully under your control. The first is your ability to adapt as an existing business. The second, just as critical, is the degree to which the kinds of products you already handle can either be bought or sold to your advantage on eBay. If you’re a consignment shop, a bookstore, or a furniture retailer, the possibilities are huge. If you’re a corner grocery or a lube-and-oil shop, however, you’ll have much more trouble making it happen.

• 1
• 2
• 3
• 4