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| ebay logo source: www.go.developer.ebay.com |
Internet auctions started as a hobby for a few computer people in the San Francisco area to have a “virtual swap meet” and get rid of some things they had, and find some things they wanted. In just ten years, this fun little idea has become a multi-billion-dollar enterprise and a global phenomenon, and amazingly, presents one of the best low-risk opportunities in history to start or grow a business! The potential is unlimited and still growing. Online auctions generate very high revenues for sellers and often, good deals for buyers, and the transaction costs are usually reasonable. The best part about this is that the marketplace is open to everyone.
Recently,
online auctions have been in the news for less optimistic reasons like scams
and fraud. For the same reasons eBay enables speed, anonymity and a global
marketplace to honest buyers and sellers, it also provides opportunities for
the behaviour of less honest members of the community, in particular, credit
card scams in certain Third World locations. However, there are many millions
of auctions every day, and like the majority of any community, the vast
majority of these auctions are run fairly and more importantly, they are making
the sellers a tremendous amount of money. Where there is opportunity there is
risk. I’ll help you understand both, to maximize one and avoid the other.
How do online auctions work?
An online
auction is just like any traditional auction, fundamentally. Someone (a
“seller”) offers something either at a set price, a minimum price, or on open
bidding. Others (“bidders”) make offers on the item by stating what they will
pay. Upon successful completion there will generally be a “highest bidder,” who
has now become the “buyer.”
There is
one main difference between eBay and a traditional auction like you might have
seen at Christie’s or Sotheby’s: eBay facilitates the auction but never takes
possession of the goods, and makes no specific warranties about the item’s
quality, the seller or buyer’s honesty, nor does it play any direct role in
payments relating to buyer’s and seller’s, but rather,
takes fees from buyers whether items are sold, paid for, delivered, or not, and essentially operates as a very complex bulletin board, not a true auction house in most cases. It is the responsibility of the person hosting the auction to deliver the item to the successful winner, while the winner needs to ensure he makes the payment and receives the shipment on time and in the expected condition.
takes fees from buyers whether items are sold, paid for, delivered, or not, and essentially operates as a very complex bulletin board, not a true auction house in most cases. It is the responsibility of the person hosting the auction to deliver the item to the successful winner, while the winner needs to ensure he makes the payment and receives the shipment on time and in the expected condition.
Payment is
through a variety of possible methods including checks, money orders,
electronic transfer systems, credit cards, wires, and more. Generally, the
seller in an auction will state what kind of payment is acceptable, and the
potential buyer can decide whether to bid with that, and sometimes other, restrictions
in mind.
To make it
more likely that buyers and sellers will provide quality service to each other
and honest goods, a fundamental aspect of eBay and most of its copycat sites is
called “feedback.” Feedback is basically a rating system that allows buyers and
sellers to see what other buyers and sellers thought about doing business with
a particular person/entity in the community.
What’s for
sale? Pretty much everything except those categories eBay chooses to limit or
ban (such as firearms, certain adult materials, and so on). Auctions are of
many types and styles, ranging from items literally priced at 1 cent, to items
worth millions of dollars, which will usually involve escrow payments and other
special terms. In later sections we’ll look more closely at the kinds of
auctions there are today.
First, since you want to make money on eBay,
let’s talk about how you give and get that money.
What are the methods of payment?
You can
generally pay for an auction the same way you would pay for anything at a local
business – cash, check, credit cards depending on the preferences of the
business (in this case the seller). For many years before the broad-based
establishment of online payment systems, money orders were the most popular
form of payment on eBay because they are easier to get than a certified bank
check - they are also usually cheaper and they represent “guaranteed” money,
which a personal or business check does not. There is a bias among sellers for
fast and guaranteed payment. There is a bias among buyers for payment that can
be traced back or investigated in the event of a problem with delivery. The
evolution of online payment services like PayPal (which eBay owns) answered
both parties’ needs and has rapidly become the most popular method for auctions
of typical values – say a few dollars up to a few thousand dollars. Beyond that
it will be COD, cashier’s/bank checks or escrow services.
What are online Payment Services?
Online
payment services started as a “virtual” cash transaction system using “fake”
digital money about 25 years ago. This quickly evolved into using real money,
which was generally tied to a credit card transaction not very different than
what you do for mail order. Stores and catalogue retailers generally have
“merchant accounts” with credit card processors. The online payment services
enable anyone to “take” credit cards, for fees like most small business
merchant account rates, around 1 to 4%. Online payment services have gotten
more diverse as technology has evolved – you can now link multiple bank
accounts as well as multiple credit cards to, for example, a PayPal account.
Today, the online payment services functions like banks, which some of them
also actually are.
When you
sell something on eBay, and you receive payment via PayPal, the buyer may have
paid by cash or credit card, and the net amount, minus fees, is deposited into
your PayPal account. From there you can pay for something yourself directly,
withdraw the money on an ATM or credit card, transfer the money into another
account, or have a check sent each month.
Most online payment services are very much
like PayPal, with a fee structure aimed at the recipient of the money, but
there are exceptions. BidPay, which is owned by Western Union, is a form of
virtual money order and is also popular on eBay. Unlike PayPal and most other
services which charge the receiver of the payment, BidPay, like its parent,
charges the sender of the money.
Online
Escrow Services
Escrow
accounts protect auction participants from potential fraud. The way they work
is the same as in, for example, a real estate or legal transaction, which is
where most people would have dealt with escrow before. Money held in “escrow”
by a third party had been received from the payer but is not released to the
payee until something happens, usually, receipt of the goods in promised
condition. Upon confirmation of the merchandise receipt the money is credited
(forwarded) to the account of the seller. In such transactions the buyer, who
benefits more in theory, generally pays the fee.
Make money with Auction!
The Internet is
exploding with growth! Within the next 3 years, experts predict Internet sales
will reach an amazing $250 trillion dollars! A larger portion of this
than you may think will be generated by auctions run by success-minded
marketers just like you.
The Internet is the
hottest new way for the average person to get rich leveraging the Web in the
shortest amount of time possible. It’s amazing what an auction – a form of
competition – does to people and their buying process. An ordinary gadget that
would sit on the shelf at the local thrift shop for years at $5.89 amazingly
flies off the auction block for $80.00 or even higher all day long! We won’t go
into the psychology behind this, other than to say it’s something you can use
to profit well.
1. More than 5.4 million people
have made at least one purchase from one of the more than 300 Internet Auctions
sites last year. Out of these more than 3.5 Million people have used eBay, and
that number is growing every hour.
2. Sales during a recent
3-month period (second quarter 2016) alone have topped $981 million dollars
from eBay alone.
3. There are over seven
million registered Internet auction users who have not bought anything yet!
Millions of new users are coming online every single day! These people may as
well buy something from you!
On eBay,
one of the largest Internet Auction Sites, more than 350,000 new items
are listed every week. And a whopping 800 new bids are made every
minute!
There are a lot of “get
rich quick” scams out there, but with a little discipline eBay is the real
thing, a completely legitimate business you can start and run from your home.
With all this buying and selling taking place, it's no wonder people are making
money. Regardless of what you're selling, with a worldwide potential for over
TEN MILLION people viewing your product at any one time, there's a good chance
it will sell quickly and for a lot more than you could ever get in a local sale
or regional newspaper.
According
to the Wall Street Journal, an average couple from Wyoming is raking in a
whopping $600,000 a year, just from eBay.
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A
commercial fisherman from New Hampshire was browsing an antique shop when he
found a copy of Edgar Alan Poe's first book. He quickly snatched it up for
$15. Three months later, he auctions it on eBay for an amazing $198,000!
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Ms.
Echols, from just outside Milwaukee, sold an 1880 piece of porcelain from
England, originally costing $61, just 10 days after a starting bid of only
$295!
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Aaron
Shannon, of South Boston, happily paid $25 for an old Union Pacific Poster.
He quickly auctioned it off on eBay for a huge $700 or 28-times what he paid
for it!
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The
stories go on and on.
Source:
Online Research
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You can
start selling on eBay by finding things around your house that you don’t want –
a garage sale in cyberspace. Once you are comfortable with a few of those
transactions (and probably happily surprised at how much your auctions closed
for) you can start looking to build a business, get inventory, and make real
money online.
EBay has
many benefits. You do not require any inventory to begin nor do you need to
invest a lot. You can start today, literally, and grow the business as much as
you want – or pull the plug on it the day after tomorrow and try again in a few
weeks or months. There has never been a marketplace like this before, and you
can see why the founders of eBay have done incredibly well for themselves.
The main
concern about any kind of financial transaction is security – as a buyer, will
you get what you wanted, and as a seller, will you get paid?
eBay is an innovator in
online transaction management and they have a lot of features that make the
marketplace quite reliable and safe.
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