11 Steps to Start an EBay Consignment Business
By Ryan Round
Put your EBay selling skills to use. Make money without having your own inventory. Yes, selling other people’’s stuff on EBay can get you good commissions. If you sell an item using wholesale or drop shipping source, then you have to sell it a certain price to make money. With consignment selling, you get a percentage of the selling price. Of Course, the item owner will expect you to sell it at a certain price but they are not very rigid about that.
Many have created a steady income through consignment selling. Selling on a consignment at a physical location (in a brick and mortar retail store) can incur costs of the shop (either rent or ownership of the shop). Selling online will not include such costs. Here are 11 steps to start an EBay consignment business.
1. Decide what to sell: It is important to decide what items to sell. If you alone decide to sell everything, then that will be a failure because a person cannot have the passion and the knowledge to sell everything. Some of the everyday items that sell really good are electronics, computers, autos etc. Other unique items that are popular on EBay are antiques and coins. There are research tools to determine the most popular items on EBay. Also, EBay offers this information for free at http://pulse.ebay.com/ . From a list of popular items, you can pick the one’’s that you are interested. It is important to create your own niche. If the business grows, then you can employ people who have the expertise in other popular items that you do not
2. Form a corporation: It is best to run business under a corporation than under your name individual. The corporation offers tax benefits and also protection to your personal assets. Depending on the state where you live, you may need a second hand dealer license. You have to check with your state laws. If you are just starting out, then you may not need this license but if your business starts to grow and gets noticed, then you need this license. If you are storing other people’’s valuables in your house or storage, ensure that they are properly insured. Some insurance cover only the item that you own so check with an insurance agent.
3. Get shipping material: Depending on what you are selling, obtain shipping material. Shipping materials can be purchased at very low costs when you buy in bulk.
4. Sign up for EBay Trading Assistant program: Signing up for the Trading Assistant program is free but there are some requirements about the number and percentage of positive feedback, number of items sold every month etc. All these requirements are listed on EBay Trading Assistant program. EBay also has many free marketing materials for EBay trading assistants. This is a huge resource. The EBay logo can be used in the marketing flyers but there are some rules for doing so. It is best to check out the EBay’’s trading assistant page that is available when you sign up for the program.
5. Decide your commission structure: Commissions for EBay consignment vary. The most common one is a flat rate charge. Here you can charge 30 - 35% commission on the sale price. This will be an all inclusive commission i.e., you will be responsible for all EBay charges (listing, final price, listing upgrade etc.). The other type of pricing will require the buyer to pay for EBay charges and a commission that is usually 10 - 20% of sale price. If you are selling autos or real estate, EBay has listing flat rate charges. For autos and real estate, the listing charges are high. In such cases, you can request for upfront listing fee and then charge smaller percentage commission as these items sell for a high price and you will make enough money.
6. Consignment contract: This is a paper document that describes the owner’’s and your responsibilities, terms and conditions, commission and other charges etc.
7. Advertise your EBay consignment business: Start advertising to find people whose item you can sell. Lots of people look for consignment sellers on EBay trading assistant pages. Listing your name under this directory is free but there are criteria for this. Other places to advertise are local newspapers, Craigslist, friends and family, business etc. The biggest question people want to know why they should use your services. There are several reasons - you can get them higher price for their item, you will take care all the things involved in selling like listing, communicating with potential buyers, packaging, shipping etc., you will free up their time so they do not have to worry about the item that is for sale, you have a good reputation on EBay and many more.
8. Sign the consignment contract: Once you have someone who wants you to sell their items, you must have them sign the consignment contract.
9. Take possession of the item you want to sell: Take possession of the item and take pictures. This is very important! If the owner says, he wants to keep the item at their location, you must insist that you take possession unless it is an expensive item like jewelry, autos etc. Sometimes item owners from out of town may say that they will take pictures of their item and send it to you to sell on EBay. Many times, these are just scams. You must see the item and if possible, take possession.
10. Sell the item on EBay: After selling the item on EBay, package and ship the item. Wait for the buyer to acknowledge that they received the item in satisfactory condition. After this, deduct your commission from the money received from the buyer and then send the check to the item owner.
11. Obtain testimonials: Offer the item owner a small cash reward for giving you a written testimonial for your service. Testimonials create credibility and will help you grow your business.
As you can see, with a little effort, you can create steady stream of income on EBay without much investment. Many EBay sellers do this to generate another stream of income. As you start doing this, you will learn more about the business. Remember to check out the EBay Trading Assistant program as this is a great resource for you to get started with your EBay consignment business.
About The Author
Ryan is also a leading training in the internet marketing field, check out his Internet Marketing Blog now.
