Well, the holiday season isn’t just a time of year when you get everything you want, it’s also the time of year you get a lot of things that you really don’t want. Many people view ebay as a way to sell those items and make a little extra cash, that is one method but keep in mind that if you don’t want it there might not be much of a market for the item. Still, other people intentionally buy anything they can find on steep discounts during various sales like black friday hoping to sell them later on ebay. That may sound like a great idea, but what if they don’t sell? You end up losing money instead. Don’t forget, just because it’s cheap doesn’t mean people will buy it. Hopefully this article will help you.
One thing you should do before selling anything on ebay is benchmark! Benchmarking in this case means scouting out your competition and the market. If there are a lot of sellers on ebay selling the same item you are selling, by the law of supply and demand your final sale price will be less than if there were fewer sellers of the same item. If the market is flooded, you probably will either get a very slim profit margin (which might be eliminated by ebay fees you pay as the seller), or even possibly end up selling at a loss. This is why when I see something on sale I can buy cheap, I check ebay before buying it if my intent is to resell it on ebay. If the market is flooded I either decide not to buy it or buy it planning on waiting to sell it until the market is less saturated.
As an example let’s look at this year’s hottest toy for Christmas, or what was believed to be “the hardest toy to find for Christmas”…. TMX Elmo. This went on sale in September at the stores and sold out very quickly at $39.99. Nobody could find it in the stores after about early/mid October. Some sold it on ebay right away and were getting $60-80 including shipping cost for about a 50% profit margin. As the holidays got closer in early November the prices went up to $80-100 including shipping. About a week before black friday through the end of November the prices peaked at $100-140 including shipping. But all of sudden in early December the market was flooded by everyone wanting to take advantage of the end of November prices. Well guess what, the market got flooded, too many sellers were trying to take advantage of it. In the end with the numerous TMX Elmo’s on ebay and some stores starting to get shipments in the price plummeted. For the past two weeks sellers are selling them anywhere from $45 to $55 including shipping making a razor thin profit or a loss. Everyone knows after Christmas the value will drop even more, so they are trying to sell them off before that happens.
This happens with many “hot products of the season”. There are some products that I would be very hesitant to stock up on right now to sell on ebay that you might think would be logical choices. These are batteries , CD-R’s, DVD-R’s, digital tapes for digital camcorders, and memory cards. Many of these were on sale very cheap around black friday and during other sales during early December. I suspect many sellers are holding them hoping to sell them right after Christmas to people that got items that use these for memory storage for Christmas. My suggestion would be to hold off about one or two months if you purchased a stock pile of these items. These were never high profit items on ebay anyways and if my guess about the flood of them on ebay after Christmas is correct most will be sold for very little profit. Also keep in mind retailers will have sales on these right after Christmas to get people back in their stores.
Remember I mentioned ebay fees? Well ebay charges a fee to list, a fee based on the closing cost, a fee if you want to offer a “buy it now” option, a fee if you want to set a reserve price, and a fee if you want to have it as a highlighted item, and that’s just to name a few. Now you can see why if your profit margin is margin thin that you could actually end up losing money on your sales when ebay is flooded with the item you are selling.
One tip I can offer you if what many do on ebay, and that is using higher shipping fees than what the shipping also costs. You can do this because it is “shipping and handling”. See ebay doesn’t charge listing fees or closing fees for the portion of your sale that is the shipping costs. That is why sometimes you will see outrageous shipping fees on ebay but very low sale prices. The only thing you have to be careful of is sometimes will will “put off” your potential buyers. They will not understand how things work on ebay as a seller and think you are just trying to rip them off. I would play with shipping charges and see how it works for you.
I hope these tips will help some of you that will be jumping into the ebay world either just before or just after Christmas. Hey, even if you aren’t selling, as a buyer this information can be helpful so you know the strategies sellers use and if you think about it you can take advantage of it. That will be the subject of a future article I write.
