Business Opportunities Weblog

December 8, 2009 by Rich Whittle | 1 Comment

The online marketplaces eBay and Amazon once seemed like surefire places to make extra money or to build an online retail business. It’s not quite so simple anymore, reports The New York Times.

Identify product areas that interest you, and seek a niche. Rather than sell, say, digital cameras, you might sell a specialty tripod or other accessories that aren’t already sold abundantly online.

Skip McGrath, an eBay Powerseller,, started with automatic pepper mills. Based in Anacortes, Wash., he decided to sell specialty kitchen gadgets on eBay. “They’re light, easy to ship and I’m one of the few sellers selling them,” he said. “If I had pots and pans, I’d have 200 competitors.”

Find a reliable wholesaler who offers low enough prices to generate high enough profit margins on resale. McGrath, who said he generated roughly $150,000 in annual revenue with his eBay store, buys his pepper mills from a Seattle-based wholesale dealer. Finding the right wholesaler can require an extensive search.

Many sellers, McGrath said, source their products offline, through local wholesalers or flea markets. Comparison shopping can still be done online, using sites like Liquidation.com and eBay, which offer wholesale items in bulk.

Selling on Amazon is more automated and requires less buyer interaction. The site collects money from customers and deposits it in seller accounts. In most categories of goods, eBay requires that sellers accept payment only through electronic systems, including its own PayPal system.

Amazon has no auctions — all items are sold at fixed prices — and automatically sets the shipping fees depending on the item being sold. EBay sellers can choose their own shipping fees and have more control over the look and timing of listings.

McGrath said that eBay was still the better option for selling clothes, toys and household goods. Books, music and other electronic media, he said, tend to do better on Amazon.

Photo by Amazon/eBay.

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Tags: Advice, Amazon, Ebay & Online Auctions