While we can’t guarantee that we’ll make you an eBay millionaire, we can share with you our top tips on how to earn some extra cash.
From designer clothes to the toilet seat from Camilla Parker Bowles’ local pub, there is a buyer for absolutely anything on popular auction sites such as eBay. So whether you are emptying out the loft, making some space in your wardrobe or have an unwanted present, if it’s in good condition then there’s no reason why you shouldn’t be able to sell it on an auction website.
How Auction sites work
Registering for most auction sites is free and is usually a simple matter of completing an online registration form. You may be asked for your credit or debit card details when you sign-up, but this is usually just for the purpose of verifying your identity.
Buying:
Auction sites work by a process known as ‘proxy bidding’ where the aim is to ‘win’ or buy the item at the lowest possible price. All you have to do is to enter the lowest price that you are willing to pay for an item and then the site will make a series of incremental bids on your behalf, up to your maximum bid.
Say you are bidding for a genuine pair of Simon Cowell’s, high-waisted trousers. The seller has listed the item with a starting bid of 99p but, being the world’s biggest X-Factor fan, you are willing to go as high as £12.95 for the chance of slipping into your hero’s strides.
Placing your bid of £12.95 will cause the starting bid to increase to say £1.20 and proxy bidding means that if no-one else places a higher bid, then the trousers will be yours for just £1.20.
Unfortunately, the fact that Mr Cowell is such a popular man in the world of entertainment could mean that a bidding war breaks out. If there is another X-Factor fan out there who is willing to place a maximum bid which exceeds your £12.95, then Mr Cowell’s trousers will be theirs. But that’s the risk of using online auction sites!
An item will usually be available to bid on for a limited period of time only and you can follow all the action online as the clock counts down. If you successfully place the winning bid for an item then you will usually receive a confirmation via email. It will then be down to yourself and the seller to arrange payment and delivery between you.
Selling:
Selling an item on an auction site like eBay, will usually require making a listing for your item. This can involve giving it a title, writing a detailed description of your item, adding a photograph, placing it in a category which includes similar items and deciding on the starting bid. You’ll also have to enter the location of your item, decide how much to charge for delivery (or whether you will allow the buyer to collect it themselves) and your preferred method of payment.
If your item sells then it is down to you to organise payment and delivery with the successful buyer. It goes without saying that no matter how nice the buyer seems, you should never dispatch an item without receiving payment first.
Don’t worry if your item fails to sell, you won’t be charged a valuation fee and you can always list it for free a second time as long as it sells the second time around.
Fees:
This is where auction sites make their money. Whenever you sell an item on sites like eBay you could be charged an insertion fee when you list the item and a valuation fee if you successfully sell the item. The insertion fee is based upon the price at which you wish bidding to start, while the valuation fee is based on a percentage of the price at which the item is sold.
Private sellers can list their items for free if you enter a starting price of 99p.
There are also optional extras that could enhance your item’s chances of selling, such as extra photos or a ‘Buy it Now’ feature which allows you to buy the item for set price instead of through an auction.
You should also be aware that if your buyer pays you through a service such as PayPal, then you will also be charged a fee of between 1.4% and 3.4% of transaction.
And the secret to making money on an auction sites is…
Are you ready for this? Drum-roll, please! The secret to making money on an auction site is:
Buy low and sell high.
It’s the same as with any business; reduce your overheads and sell at the best possible price to maximise your profits. But how do you apply those principles to the world of online auctions, we hear you ask? Well here’s our top money.co.uk tips.
How to buy low:
- Try searching for misspelled words or even American spellings like ‘color’ instead of ‘colour’. If people can’t find an item then they can’t bid on them and drive the price up.
- Most people start their auctions at 99p to avoid the insertion fee. Because of this there are hundreds of items out there that will never be bid on which you can get for a bargain price. Simply use an online tool like Lastminute Auctions which specifically searches for items at this price that are ending soon.
- Always take into account additional costs like delivery charges before bidding on an item.
- Just because an item is on eBay, don’t always assume that it is a bargain - always check the price elsewhere online.
- Like an episode of Lost, all the action in an online auction tends to happen in the closing minutes. Bid early and you alert other buyers to your interest, forcing the price up. Try using sniping software which waits until the very last seconds before making a bid on your behalf. It sounds sneaky, but it is now considered to be socially acceptable.
- With an estimated 15 million users, eBay is by far the most popular auction site on the web. Buying from a less popular site like eBid could help you pick up a bargain.
How to sell high:
- If you’re just starting out, buy a few cheap items to build your feedback up – some buyers and sellers don’t like dealing with newbies.
- Finding things to sell on auction sites is not just limited to the contents of your cupboards or garage. Be inventive: scour car boot sales, 1p auction sites, house clearances, designer outlets and even high street sales for bargains - anything that offers you a margin when selling on for profit. You can even snap up bargains on auction sites to sell on for an elevated price by adding a better description or image.
- Brand new items always sell better. If you receive an unwanted DVD or video game always leave them wrapped in their original cellophane packaging.
- We all know that people love to buy brands. If you’re selling Nike trainers or a Toshiba TV, make sure you mention it in your item’s title.
- Everyone knows someone who’s an eBay whizz. Why not get them to sell your stuff for a cut of the profits?
- List at times so that your auction ends when people are at home - Sunday afternoons or evenings and Mondays tend to be the busiest.
- Take advantage of free listings days which sites like eBay often run at weekends.
- Think like the buyer and use the words that people will search for in your item’s title.
- The lower your item’s starting price is, the more likely you are to sell it.
- Do your research - What have similar items sold for? What kind of descriptions sell? What key words have successful sellers used in their titles?
- Spell check your listing – you don’t want someone else profiteering from your mistake.
- By knocking a penny off your £15.00 starting price and listing it as £14.99 instead you could save you 15p in fees.
- Avoid listing and valuation fees altogether by using a free classified ads service like Gumtree.
Some do’s and don’ts
In closing we’d just like to provide you with a few do’s and don’ts when it comes to auction site. While we can’t guarantee they’ll help you make your fortune, but they could be the difference between your item selling and suffering the ignominy of re-listing for the third time.
- Don’t be tempted to overcharge for postage as it will put off buyers – you can get accurate postage prices from the Post Office website.
- Do be honest when describing your item and include details of any damage.
- Don’t use an out of focus, low-resolution photograph for your item.
- Do use Paypal for a safe and convenient way to receive payment.
- Don’t bother paying a reserve fee for your item – it puts buyers off.
- Do make sure you list your item in the right category.
