01.06.06

How NOT to make money on eBay

Posted in eBay at 11:53 am by admin

We all know about eBay, we’ve all shopped on eBay and we’ve all probably already sold something on eBay as well. So how can we create a steady income stream from eBay?

There are LOTS of websites out there which claim will make you rich overnight on eBay. “Start a home business, $10k/month” they all claim.

Lesson 1: Stay away from these schemes. I just can’t believe how many people fall for these kinds of things. 99% of these “home business” ideas involve registering with a dropshipper and selling worthless no-name novelty items. Nothing happens overnight and nothing is for free. I think I’m a pretty smart guy, yet I’ve been burnt by this simple fact enough times to learn my lesson.

Lesson 2: Stay away from dropshippers. In case you haven’t heard this term before, a dropshipper is a business which offers items for sale which you can purchase and have shipped directly to your customer without the dropshipper’s label on the box.

Sounds like a good idea, right? I thought so too, and fell for it for a while. Many dropshippers are scam artists. Plain and simple. They will take your money, and not deliver the product to your customer, leaving you in the middle with an angry customer on one end, and money lost on a product not delivered on another.

Now, I’m not saying that all dropshippers are scam artists. In fact, I have dealt with a number of very reputable ones. The problem is this: There are actually many great dropshippers out there, which offer huge discounts on products and will ship directly to your client with your label on the box. The problem is that they charge very high monthly fees (in the hundreds, to thousands) and have very high initiation fees. If you already have the volume, go for it! You will benefit from their services.

But if you’re an everyday guy like me just trying to make a couple bucks on the side, this is not the way to go. Dropshippers which claim to have no hidden fees, or no monthly or initiation fees are not dropshippers. They are only retail sites, and their prices are not very competitive. Watch out, and remember that no one will buy that jet lighter shaped as a tiger you can get for $0.47 from your dropshipper, even if it is a good deal.

Lesson 3: Only sell to Verified users. If you’re going to sell items online to strangers (ie. you don’t have a previous relation with your buyer, and you’re not going to deliver it in person) then only accept payment through PayPal, and only sell to Verified users. I really can’t stress this enough.

The problem is that even though you might think it doesn’t happen, there is credit card fraud on eBay and on PayPal. I personally have lost money because of this and I hope you learn from my lesson. If you sell an item to a user who is not PayPal Verified, and they used a stolen card to make the purchase, PayPal will not reimburse you for your loss.

However, if the user is verified, and if anything goes wrong, you are protected and PayPal will fight for you. Just remeber that next time when your auction closes. You can always decide to sell to someone else. Is it really worth the risk?

All of these lessons, I have learned the hard way over many years. Hopefully it takes you less time to learn them than it did for me…

Permalink