Total Articles : 80 - TimeStamp : 23 2017f September 2017   


 



Marketing Your eBay Based Business

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Wait, what in the world are you talking about? Why on earth would I ever consider doing any of that (insert unpleasant adjective here) business junk? My desire to avoid difficult, time consuming, unfamiliar business techniques is why I choose to do business on eBay in the first place. I wanted a just add water business. Why market when there are millions of buyers on eBay? If you are asking yourself this last question please read my last article entitled “The Value of Niches on eBay.”

When you first got the idea to start a business on eBay you might have thought you were going to get yourself a just add water business. All you had to do was find something to sell, list it for sale on eBay, and wait for the money to start rolling in. This reminds me of the first economics course that I ever took. In one of the first chapters in our textbook it said “there’s no such thing as a free lunch.” The longer that I am involved in business the more that this saying seems to ring true. I don’t really think that there is such a thing as a just add water business, that can be a long term way for you to profit. Think about it, if you could find such a “just add water business” and make a profit, what is to prevent the next guy from coming along and dipping into your profit? How long do you think it will take for enough other people to dive into whatever opportunity you are involved in, until you can no longer make a profit with that opportunity?

This brings me to something I read in the text book for my second ever economics course, the book said that “with identical products and perfect competition, profits tend towards zero”. I love examples so let me give you one. Let’s say you go to the orchard and buy apples for 50 cents with the plan of opening a road side stand and selling the apples for a dollar. In the beginning everything is going great and your netting a cool 50 cent profit per apple (less sales tax, income tax, permit fees, etc.). Let’ say that after a short time Johnny Competitor sees what you are doing and decides to go to the orchard himself, and then decides to open up his own stand across the street. What price is Johnny going to set for his apples in order to attract potential customers away from your stand and over to his? Maybe he will charge 95 cents. How long do you think customers will continue to buy from you if you are selling the identical produce which he is selling, if you are charging 5 cents more then he is? Probably not long! So what should you do now, maybe cut your price to 90 cents to get customers back? Do you see where all this is going, can you guess where it is likely to end? With both of you selling apples on the street side for 50 cents an apple, at zero profit per sale, I would hazard to guess. This is clearly an oversimplified example, but I think it demonstrates an important point, and that is that “with identical products and perfect competition, profits tend towards zero.”

What to do? There are two strategies which I would suggest. One is product differentiation and the other is setting up barriers to entry. Of these two I personally think that the second, “setting up barriers to entry” is more important. One of the great things about marketing is that it allows you to do both of the above mentioned strategies at the same time, it allows you to set up “barriers to entry” and it allows you create “product differentiation”.

How do you market an eBay based business, you might ask, and what exactly do you mean by product differentiation and barriers to entry? I will be discussing these issues in upcoming articles so please stay tuned. There are a great many eBay based business that do over a million dollars in sales a year. There are people who have become very successful with eBay based businesses. Most of the companies that I have studied who had over a million dollars a year in sales on eBay, had what were in my opinion, sophisticated business models. So what should you do if it is your serious goal to build a business on eBay that does over a million dollars in sales per year? I would suggest that you start small, learn from your mistakes, and develop your own sophisticated business model that works for you.

Best Wishes for your Continued Success on eBay,

-Philip Weslow

For more information about doing business on eBay let me show you for all auctions how to build your eBay feedback.

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