How the eBay Powersellers are Making Money on eBay

by Michael Ellis (2/20/2006)

Just about every week I get at least a couple of questions from beginning entrepreneurs requesting advice on how to start selling products on eBay, not just 1 or 2 products, but a regular eBay business. They usually know a little bit about eBay – they know that eBay Powersellers are making money on eBay and they want to know how to do the same. Let me share what I know about how eBay Powersellers are making money on eBay.

Let's define what an eBay Powerseller is. An eBay Powerseller is someone that conducts $1000 or more in auction sales for at least three consecutive months. You don't have to be an eBay guru to quickly notice that eBay is literally crawling with Powersellers.

I've spent well over five years studying the eBay business process and the Powersellers that make it work. Over those years I've also done a heck of a lot of business with Powersellers, and along the way I learned that there are two types of Powersellers:

1. Niche Power Sellers
2. On Demand Power Sellers

Niche Powersellers are specialists. They concentrate on a particular area - like PDAs, stamps, paintings, etc. These niche areas are hobbies to the Powersellers and they are very knowledgeable of the values of the items within this niche, and how to find these items for great deals for resale. These types of Powersellers are very difficult to compete against.

The on demand Powersellers, on the other hand, are not as knowledgeable about the products they sell, but they are very good at identifying product demand and finding products to fill that demand. I call them On-Demand Powersellers because the find out what people want, and then they find products to sell to those people. You should be trying to imitate these Powersellers.

People tend to think that eBay Powersellers are large organizations that employ dozens of people, but this generally isn't the case. The Powersellers that I know are home business operators that work out of the garage or basement. Ebay has a good way of leveling the playing field in this respect – small operations can create just as enticing auctions as large operations.

How can you imitate an On Demand Powerseller?

The answer to that question isn't very difficult. All you really need to do is obtains a seller's permit, identify a demand for a particular product or category of products, and find a wholesale supplier for that product. Then buy the products for wholesale and resell them.

A seller's permit allows you to buy products for wholesale prices from a wholesale vender. This permit is usually the first thing any legitimate wholesale company asks for, and if you don't have one, they could reject doing business with you. Of course there are a ton of less than legitimate wholesale companies that would probably be very willing to sell you products without a seller's permit, but that's a different story. I recommend you read the Wholesale Product Distributors and the Ugly Middleman Chain article for more information on the different types of wholesalers.

Seller's permits can be obtained at: http://www.businessnameusa.com/2.htm

Demand for a particular product category can be found using the eBay 'Hot Items' resource (http://pages.ebay.com/sellercentral/whatshot.html). This resource consists of a 40+ page PDF document listing the items which are hot sellers in the numerous categories. However, the data is typically for the previous 2 months.

Find What's Hot on eBay at: http://pages.ebay.com/sellercentral/whatshot.html

Once you identify which of the hot seller items interest you, head over to eBay's Advance Search and run a search for those products to make sure they are still getting plenty of bids – still hot sellers. Make sure to also conduct a search with the 'Completed Items' option in the Advanced Search box checked. This will show the auctions that previously ended and how much the items sold for.

After you've found a product that you're interested in selling, head over to Google and conduct a search on the product. Look for the manufacture's website. Once you've found the site, try to find a contact number or 'dealer inquiry' number. If you don't have any luck, you can usually find this information on box of the product itself, so maybe shooting down to the store may be the next step.

Once you have the contact number, give them a call. Let them know that you operate a business and would be interested in becoming one of their product dealers. Most of them are very helpful in getting you setup. However, be aware that there may be a minimum order size. But if you did your eBay research, you'll know how much these products recently sold for and how much they are currently selling for, so you should be able to make a confident decision on whether you can make any money.

Well... that's the process. It's not very complex and it's the one that I have seen work over and over again. In fact, not too long ago I came across two eBay Powersellers that are very successful with this very system. One Powerseller had sold over $100k worth of those robotic vacuum disks in 60 days! The other Powerseller does a nice business selling dog chews. Both of these Powersellers simply identified the demand for the products, then sought out the manufactures and became dealers… the rest is money in the bank.

Author - Michael Ellis (Email: michael@victorykey.com)

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