Guest post by Nathan Clarke. Nathan is a systems engineer and eBay reseller with a goal of reaching a million dollar net worth. He blogs about his journey at millionairedojo.com
eBay has been around for over 20 years now. It was founded on the idea that you could take junk out of your closet, list the items and ship them across the country once someone purchased them. It’s amazing to think this business model actually worked, because there’s a high level of trust involved.
When the company first started, nothing was stopping someone from creating a listing and then taking the money and running without shipping the item when someone made a purchase. That rarely happened though, and the company continues to thrive today.
Most people don’t realize the opportunity we have with eBay. Anyone can start selling their items on the platform, begin making money and even create their own business. Here are some ways that eBay is similar to investing in stocks.
1. You’re purchasing something with the hopes that you’ll make money.
No one buys stocks with the intention of losing money (unless you’ve got so much money that you need to lose some for tax purposes). Just like a stock investor, eBay resellers look for items that they can buy at a low price and sell for a profit. It’s really the same idea as stock investing in a way.
When you buy a stock, you’re purchasing a part of a company. The company uses the money you invest to hopefully grow their business and make even more money. If they achieve this, the value of your stock goes up because the company is worth more money.
When you buy something to sell on eBay, you are hoping to sell it later on for a profit. I have purchased a hat at a thrift store for $0.25 before and it sold for $35.00. I profited over thirty dollars and was able to buy more items to continue reselling. Once you start making money on eBay, you’ll see a snowball effect with your cash pile by reinvesting your earnings.
2. You expect to get a good return on investment.
When you invest in the stock market, you hope that your investment is going to grow and you’ll earn money rather than lose it. When you’re reselling items on eBay, you are trying to do the same thing. If you go out and buy things that aren’t worth anything, you’re going to lose money.
It takes some time to figure out what sells well on eBay, but when you know a few items that are valuable, you can focus your energy on looking for those things. Investing in the stock market is a bit of a gamble since you never know if it’s going to go up or down. Buying things to sell on eBay can be a gamble as well. The most valuable item I’ve sold so far was something I knew nothing about. I got an old CB radio at a yard sale for free because the person was just throwing it away. I did some research on it, listed it, and it sold for over $500.00!
3. It’s best to diversify your assets.
Having a well diversified stock portfolio is key to being a successful investor. If you aren’t diversified, you have a higher risk of losing money. The more companies you are invested in, the better chance you have of earning more money. I personally invest in index funds that cover the entire stock market. Since my money is spread out across the entire market, I have well diversified exposure.
Having a diverse set of items to sell on eBay is a great way to ensure long term success. I’ve seen several people specialize in selling only one type of item. The problem with this is that trends come and go, and if people stop being interested in the items you’re selling, you aren’t going to make any sales. I will literally sell anything that I think I can make a profit on. I tend to stick with smaller items since they’re easy to ship, but if you look at what I sell each month, you’ll find all kinds of things.
4. A large eBay store will pay you dividends over time.
The main purpose of investing in the stock market for most people is to have a passive form of income in the future. You are investing money now with the hopes that it will grow and you’ll be able to pull dividends from that investment later on in life.
When you grow an eBay store to have lots of items, it will start paying out profits over time when you make sales. I sell items regularly that have been listed for several months. Sometimes it can take years for certain items to sell, but if you’re in it for the long run, this shouldn’t discourage you. The fact that items can take a while to sell just means you have more time to grow your store and continue building your inventory.
My eBay store currently has about 300 items in it and I’ve sold hundreds of items over the past year. When your items sell really fast, it can be hard to keep building your inventory. The great thing is that I could stop listing items for a whole year and continue to make money each month until my inventory runs out. I just have to collect payment and ship the items!
Selling on eBay isn’t nearly as passive as stock market investing. When you invest in stocks, all you have to do is put money in a fund and let it sit. With eBay, you have to find items, list them and ship them when they sell.
Reselling on eBay is a lot of work, but if you love doing it, you can possibly turn it into your full time stream of income. It isn’t the same as retiring and living on stock market investments, but you might be able to quit a job you don’t enjoy and sell things on your own time. eBay can be a great way to make some extra money and if your earning enough from it, you could even invest some of your profits into the stock market!