1. Money
Send to a Friend via Email

Supply and Demand on eBay

How to know what to buy and when to sell

By

Sometimes it's not enough to merely have something to sell.

If your only goal is to hold a garage sale on eBay and turn your old junk into quick cash, eBay's a no-brainer. List stuff you're not using anyway, get paid, and smile all the way to the bank. If on the other hand you plan to turn eBay into a small business, a supplemental income, or even an occupation, you're going to have to be much more careful about what you buy and later sell.

eBay is a Fluid Market

It is true that nearly everything will sell on eBay. It is also true, however, that many things on eBay typically sell at well below retail value because of eBay's nature as a near-ideal market: every seller can approach every buyer at the same time with no barriers, real or imagined, to trade. For manufactured goods that are neither rare nor out of production, this potential for near-infinite supply has the effect of driving prices down.

At the same time, the rapidity with which stock can enter and leave the supply chain on eBay leads to a marketplace in which demand can fluctuate as rapidly as consumer tastes. If you're a seller that has invested real money in your inventory with the expectation of generating a return, you don't want to be caught suddenly with worthless stock!

In order to stay above the fray and make money, you need to understand how demand for different types of items behaves on eBay, and be able to make smart business decisions accordingly before you buy.

The Types of Goods

There are four major categories of goods that are the most viable foundations for eBay businesses: limited-life goods, general goods, seasonal items, and investment or collectible items. Each of these has its own demand characteristics and is suited to a particular size, type, and temprament of seller.

Read on to learn about each of them.

©2014 About.com. All rights reserved.