of our series on Ebay, we’re going to pick up our
discussion with a couple of terms, OPP and OPM. These are important to understand if you are going to be successful selling products on Ebay.
Some people, though they may want to sell on Ebay, simply don’t have the money to do so and can’t get it. Not everybody can go out and get a small business loan, especially if they don’t have any credit. For these people, there are alternatives that the Ebay circle refers to as OPP and OPM. This is using other people’s money to sell other people’s products. In other words, you’re simply the middle man here.
The simple description of this is as follows. You sell something that belongs to somebody else. You don’t pay them for it right away. You offer to sell it for them for a fee. You then sell the item, collect the money, take your fee from it and then give the remainder to the person whose product it was.
For example, you find somebody who has an old vase to sell. They want $100 for the vase. You tell them that you want a $20 fee for selling it. You take the vase, put it up for auction starting at $100. If it goes for more, say $120, you take your $20 fee from the $100, then from the additional $20, you take that, giving you a profit of $40 for selling somebody else’s item. Worst case scenario is that nobody buys it at $100 and you’re only out your Ebay selling fee.
We can also do this in reverse. We can buy an item for somebody. Let’s say somebody you know wants that same vase. They’re willing to go as high as $150 for it. So they give you the $150. You look for an auction, see that the vase is going for $110 and the bidding stops there. You big $111 and get it for that price. You go back to the person who asked you to buy the vase, give it to him and you’ve just made $39. Sure, he’s going to haggle over the price but you explain to him that it was only through your great bidding skills that you were able to get it for that price. Finally, you agree to give him $10 back, keeping $29 for yourself.
In both of these scenarios, you didn’t use any of your own money or your own product. You basically just did the legwork for other people who had things they either wanted to sell or buy. Yes, you do have to go out and do some hunting for these opportunities, but this is the cheapest way to start your Ebay business because the only thing it’s going to cost you, if you’re a seller, is your Ebay fee.
In our next chapter of our series on Ebay, we’re going to pick up our discussion with one of the most annoying things about selling on Ebay. I’m talking about minimum quantity orders.
See you then.