Ten Truths About an eBay Business

If you're thinking of starting an eBay business or you already have one, then listen up! Here are the ten truths about your eBay business you may not want to know about:

1. Most buyers come to eBay already knowing what they need or want (they use the search bar). Your job as a seller is to supply their needs and wants; and not your needs and wants to unload stuff. Knowing that the keywords in your title is what generates results for the search bar will help you place more emphasis on the words you use there.

2. Your home will become a warehouse of inventory (and someday you will move your operations elsewhere if you are destined to be a top tier PowerSeller). Sure there are drop-ship opportunities, but the real deal is to cut the middle-man profits and get direct wholesale sources that you can resell for 30-100% profits or to create products of your own that fill a demand.

3. eBay and PayPal will rape you of profits, but they are the necessary evils to generate traffic for your stores and to get paid efficiently. Knowing that 95% of eBayers use PayPal should be incentive enough to continue using it. Likewise, you simply can't turn away knowing that eBay ranks in the top 25 most frequently visited Web sites according to Alexa rankings with it's 40-60 billion page listings. Even so, these Internet giants aren't invincible, so keep your eyes peeled for alternatives:

eBay alternatives: http://www.mermaidmonkey.com/eBayalternatives.html
PayPal alternatives: http://www.mermaidmonkey.com/Paypalalternatives.html

4. Someday you will get negative or neutral feedback. Dealing with sellers and buyers on eBay is a delicate dance. On eBay you will run into an occassional unforgiving soul. It doesn't matter if you goof of if they just think you goofed, someday you will get a bad apple that won't budge. Don't let emotions get the best of you because it's the emotions that can wipe your chances of getting a negative or neutral feedback erased. Starting May 2008, things got tougher as eBay has disallowed sellers to give buyers negative feedback. To protect yourself, include seller's terms in your listings. Here are some other tips on surviving feedback changes: http://www.mermaidmonkey.com/eBayFEEDBACK.html

5. Funding your eBay store will be a problem if you don't have a plan to replenish inventory. Simply, you must reinvest profits in more inventory (and not live off the profits) to keep your business thriving. It sounds simple enough, but often eBayers depend on the profits to feed their family. Your strategy must include a plan to effectively grow your inventory. So don't quit your day job until you've got things figured out!

6. To grow your business eventually you will need to leverage help of family, friends or employees. The day will come when you spend all your time answering e-mails, ordering new inventory, printing labels, packing, leaving feedback, and dealing with challenging situations that you won't have time for yourself or to grow your business further. You can delegate some tasks, and using a temporary placing service will help without having any long term commitments or employment tax issues. The best place to start is to hire family and friends for more trusted tasks.

7. Someday your employees will steal. According to the U.S. Chamber of Commerce, 20% of all business fail because of internal theft and fraud. Awareness of these statistics should be enough incentive to manage inventories and put mechanisms in place to keep theft at bay.

8. To attain financial freedom you will need passive income or residual income. While eBay instituted a digital download policy March 31, 2008 to disallow sales of eBooks, templates, backlinks, and other digital products, you can still place a classified advertisement on eBay to make money selling digital products. You can also choose to sell digital products on Amazon.

9. Figuring your taxes will be a year-end nightmare unless you plan for it. Keep all receipts and get started properly using QuickBooks to manage your finances. Be sure to try Diane Kennedy's Tax Loopholes, which is your ultimate source for paying less taxes, legally. http://www.taxloopholes.com/  One possible loophole to consider: hire your children to help you in your eBay business. You may get $1,500 in deductions in hiring them as employees  -- they will not have to pay income tax, and you will still be able to claim them as dependents! Talk with your CPA about how such loopholes may work in your situation.

10. You will need to take massive action to make your eBay business successful. It's a simple thought, borrowed from Tony Robbins, the you must take massive action to succeed. The good news is that success leaves clues Follow the clues you get from studying PowerSellers (modeling them). Take action to repeat processes to reap the rewards. You simply can't fail. Believe that you can get results and you will succeed.

The truth is that while eBay has made some signifcant changes in 2008 making it much more difficult to start a home-based eBay business, savvy entrepreneurs can still live thrive in this competitive environment when they believe that they can't fail!

(C) 2008 by M.C. Nygard, Platinum PowerSeller. Visit www.mermaidmonkey.com for more information and news about eBay.