- Business and Employment
How to buy at auction, sell on Ebay and make thousands
A Few Basic Facts
Now I know what you're thinking, with a title like that this guy wants to sell me an ebook or a list of wholesalers and I'm going to waste twenty minutes of my life reading an article that is no more than a long winded advert for some cheap website. Let me set a few things straight
1. "Make $500 a day without doing any work" Ebooks are not worth the paper they are printed on, they are either tempters for some kind of multi level marketing system or involve a business model that is grossly flawed and will end up costing you money.
2. Buying lists of wholesalers and auction houses is a waste of money. This is information that you can find for yourself, however don't expect google to come up with them.
3. Dropshipping can be a sucessful business but don't expect to be competitive on ebay, you WILL need your own e-commerce site.
4. Anything involving sending money to Nigeria via Western Union is a bad idea (but you already knew that)
What I am going to tell you now is how you can supplement your income by obtaining goods cheaply and selling them on ebay, I don't want you to buy an ebook, all the information I have to offer is right here.
So how do I find out about auctions?
I'm sure you have seen secret government auctions and 10% off wholesale lists for sale before, well you need look no further than the classifieds in your local newspaper to find this info. Most auction houses place small ads when they have a sale coming up and generally there will be a web address in the advert so you can view the catalogue online. Secret government auctions do exist only there is nothing secret about them, they get listed in the small ads the same as the rest only the advert is more likely to read "sale of office equipment" than "secret government auction".
Further Reading and Practical Tips
So you know what auctions are going on in your area, what now?
Before you even set foot in the auction house you need to do some research. Print off the auction catalogue, get a pen, brew some coffee, and load up ebay. You need to look up the lots in this catalogue on ebay, use the show completed listings option to see how much they have sold for recently and if they are even selling. Make a note of the average selling price of each lot, look at the ebay listings to see how prices are affected by things like missing accesories, cosmetic damage, or even how much faulty items sell for. Thats right! Some stuff you buy at auction will be faulty and because goods sold at auction are invariably sold "as they lie" you will have no comeback, but more on this later.
You will use all these prices to determine a maximum bid for each lot at the auction. You view the item first to see what condition it is in (remember if it is electrical you may not have the opportunity to power it up while viewing so bear in mind it could be faulty) and decide how much you think you can sell it for. You work out your maximum bid from your estimated selling price minus the least profit you are willing to make from it. You also need to take into account what you are going to pay in ebay and paypal fees and also what the auction house is charging in buyers premiums. This can be reduced to a simple mathematical formula but I'll let you figure that one out for yourselves.
Your First Live Auction!
So the big day has arrived, you've booked the day off work and are heading out to your first auction so heres what to expect. When you arrive you will have to buy a catalogue to get in which will usually cost only a couple of pounds. Once inside, all the lots will be laid out on inspection tables. Find the ones you are interested in and have a good look over them, don't be afraid to get stuck in, everyone else is, just be courteous. If something is in a box then put it back in its box as it was when you are finished. You are looking for cosmetic damamge, missing accessories, anything that will affect your ability to sell it later. Keep an eye out for return labels, if an item has a sticker with return or RTX or similar on it, it is a sure sign it is faulty and to be avoided. Make sure you take a pen with you so you can write on the catalogue not to bid. Many auction houses open their doors the day before a sale for viewing and if you have many lots to look at it may be worth coming along, however you usually get an hour or two to view before the sale starts and I have always found this ample time.
Before you bid you will need a bidding card with your number on it. There will normally be a table set up to get cards or an office window inside the building. You give them a deposit which is normally 100-200 and anything you bid on comes out of this money, and if you don't buy anything then you get it all back at the end. Most places will take a deposit from a debit or credit card, however some insist on cash only so it is important to check this out before you go. Remember when you start bidding that the amount you bid is less than what you pay. When a lot is sold, the hammer price will have VAT or sales tax added on to it and a buyers premium is added on to that. The buyers premium varies from auction to auction but is normally 10-20% of the hammer price plus VAT.
I would recommend doing a dummy run before you actually bid on anything. Get a catalogue, work out what you could sell and your maximum bids and go to the auction and make a note of what things are actually selling for and whether you would have made money at that price. Dont bother getting a bidding card if you do this because you don't need the temptation at this stage, you just want to get a feel for what is going on.
When you actually start bidding properly there is one golden rule you must stick to and that is under no circumstances go over your maximum bid for any item. You will have spent a good few hours researching and calculating these maximum bids and this time will just have been wasted if you start ignoring your max bids at this stage and you will also be eating into your profits. This might sound like a no brainer but its surprising how easy it is to get gripped by auction fever or to end up in a bidding war. You will find as an ebay trader you are outbid quite a lot because items sold on ebay go cheaper than the same thing in the shops and you will be bidding against people who own shops who can afford to bid higher than you. Don't let this put you off, stick to your max bids and you will win some eventually, and its better to buy only a few things that make a profit than a whole bootload of stuff that you sell at a loss.
Some auctions will offer what is known as right of follow on, when there are several identical lots and you win the first one you can elect to buy as many of the follow on lots for the same price as you got the first for. This can be good or bad. If you have a regular auction you attend and they have the same sort of lots week in week out then it can be worth taking follow ons. For example, one auction I go to clears shop returned goods for a retail chain, now there are one or two lines I have bought before and I know because they are a regular thing that minimum 80% of what I buy will be working product that I can double my money on. Hence I would confidently go in and spend a couple of grand on follow ons. On the other hand if it is your first time and you get an iphone for Â£30 and there are ten follow ons, you think great I'll take the lot. Then you get them home and they all have faults and the Â£300 profit you were going to make turns into a Â£300 loss. My approach is to buy lots of different things so that any losses I make on faulty goods can be covered by what I make on working products.
Regarding bidding technique, it is normal for the auctioneer to start the bidding at the final price he/she expects it to sell for and then ask for progressively lower starts until someone makes a bid. So if it starts at 50 it may drop as low as 10 before someone actually sticks their hand up. Its always a good idea to be the first to bid because the auctioneer will always concentrate on the first two people bidding, and you will find after the first bid goes in there will be about ten people sticking their hands up to be the second. The reason for this is because by the time a third bidder gets the opportunity to get involved the price may have gone too high. You have to be in it to win it! On this same point, try and sit near the front of the auction room. The auctioneer will always favour bids from people sat near the front because they naturally come to his/her attention first. You will always get people standing near the back because they want to see who they are bidding against. In my opinion this is pointless (and a little sad) because people will bid whether you can see them or not. Get to the front where the auctioneer can see you and get those bids in. I'd just like to point out here, dont be daunted by what you've seen on TV of auctions, you will never accidentally buy something by scratching your ear. The auctioneer will know as well as you do that you scratched because you had an itch, not because you wanted to bid. They will be looking out for a clear signal like a raised hand, once you are bidding against someone else they will take a nod of the head as a bid but until you stick that hand up, don't worry.
Once the auction is over you go back to where you got your bidding card and settle up. You will either get change from your deposit, or will have to pay the balance if you bidded over your deposit. Some places want you to settle by the end of the day, some want it by the end of the week again check this out in advance. Once you have settled a porter will take you to collect your goods and thats it. Make your way home with your new possessions.
One more thing to point out about the auction game is its a good idea to talk to your fellow bidders. I'll make no bones about it, when it comes down to it they are your enemy, they want the same things you want and they will force you to spend as much as they can to get it. But they are still people, and apart from it being nice to just have a bit of a chat while you are outside having a smoke or a coffee, a lot of useful information can be gleaned. The main topic of conversation is always going to be about the lots that are coming up and it may be worth mentioning what lots you are looking at. You never know, someone might have bought the same things before and had a bad experience and if they tell you you might just avoid losing a fortune. Its worth giving a little info about what you know as well to get the ball rolling, but avoid giving out misinformation to stop people bidding on the things you want. Others will still bid and if you get spotted you are just going to look like an idiot. Also, by talking to your fellow bidders you can find out more about the other auctions in your area and whether they are worth going to.
All the stuff I bought is broken!
So I bought a load of laptops and they were all broken. What now?
Don't panic, the great thing about ebay is there is a thriving market for faulty goods. There is an army of professionals, home repairers, and wannabe home repairers (who often bid over the odds and get burned because the ebook on laptop repair they bought didn't tell them they would have to spend another 100 on parts for their project). If you are unable to repair it yourself (and sometimes is just a case of reinstalling windows) you can list it as faulty and cut your losses that way. Just be honest about what is wrong with it and if you worked out your max bids properly you should be able to break even or only make a small loss.
Before you actually list anything on ebay you need to check it thoroughly, if it is electrical make sure absolutely everything works and if something is wrong you need to point it out in your listing. A bit of time checking now can save you a load of hassle later.
I'm not going to go into a load of detail about selling on ebay because there are loads of articles that go into a lot more depth than I am willing to, all I will say is watch your feedback. Look after your customers, don't try to paw faulty goods off on them and if there are any problems get them sorted as quick as you can. Do these three simple things and you wont get negative feedback. Negative feedback is your worst enemy in this game because if people think you are a dodgy seller they will simply not buy from you. Of course if you do get negs you can simply get a new ID but think about this. Would you rather buy a computer or a sat nav or even a car from someone with 100 feedback or someone with 2?
All you need to sell sucessfully on ebay at the end of the day is to have goods that you can afford to sell at the going rate.