Ok, let’s get straight to it. ebay is one of the most recognizable names on the planet and for those that understand how to use its power, it presents an amazing opportunity to make some serious money.
I have studied the tools and techniques required to ensure success and these ideas and concepts are described in this report, together with a step by step walk through showing the tools and techniques in action – AND MAKING MONEY!
In starting to study the way ebay works and trying to work out what strategies would make money, I wanted to satisfy certain criteria:
1. I wanted to create a business in which I was interested, with products that meant something to me personally since any business takes time and effort and I did not want to spend time and effort on something I did not find interesting and enjoyable.
2. I wanted the products to be universally attractive to people of all ages and interests to maximize the potential market in which to sell.4. I wanted the package and postage costs to be low, and ideally the product should be capable of being posted without requiring to visit the post office.
5. I wanted the product to be relatively robust and not require special packaging.6. The business would need to be scaleable, meaning that to increase the amount of profit, it would be simply necessary to increase the volume of products sold.
Once I had set out the basic requirements, the answer was immediately obvious – MUSIC CD’s!I have always loved music of all types, there is a massive market for CD’s (despite the increasing popularity of downloadable media) and it’s easy and cheap to ship with minimal postage and packing costs.
Ok – so that’s the product – but is it possible to make money by buying and selling music CD’s?
I set the margin to 120% as the minimum required to make the whole venture worthwhile. What this means is that if a CD could be sold for 15 units (£, $ or whatever your local currency happens to be) and the selling costs are approximately 5% of the selling price then I would need to be able to buy that particular CD for approximately 10 units taking into account typical postage and packing costs. I will use $USD for simplicity but this business model works for any currency. The calculation can be simplified by assuming that you need to be able to buy an item on Ebay for around 2/3 of the planned selling price to make it profitable.
We will see later that this is easily possible and profit rates exceeding 50% are can be obtained.
Single CD’s weigh around 120 grams when in a normal jewelled case and the typical postage cost, for example in the US is significantly less than $1. It’s also possible to pay the postage and print out the label directly from Paypal which saves both time and effort. Postage costs are very similar in other parts of the world.
Ok, we have seen the typical prices we will have to buy our CD’s and also what price we will need to obtain in the ebay marketplace to make the required profit. It’s now time to put the idea into practice. There are only 2 key steps:
The first step is to see what types of CD are selling. We are looking for CD’s that have attracted a significant number of bids and have reached a minimum price of $15 to make it worthwhile. I personally require the minimum number of bids to be 5 and so we will need to search ebay for CD’s that satisfy both these criteria.
I personally use a tool called Hot Item Finder from Dave Guindon. This great tool can be used to search for products on ebay which satisfy virtually any criteria you set. For example, you can find out:
What items at Hot Item Finder are getting the most bids!I have opened the product and asked it to search ebay.com for any CD in the music category which successfully sold and which attracted more than 5 bids. I have then ordered the resulting list in order of number of bids by clicking on the “bids” column, and you can see a screen capture from Hot Item Finder showing the results below.
We can now look down the list to see if there is anything of interest on which we might be able to make a decent profit. The first item to catch my eye is the tenth one on the list, attracting 11 bids, called “For Our Children – Disney, (CD, 1991).
I chose this item because it sold for $17.25, with 11 bids and Disney is always a popular item. We now need to carry out some further checks. I now search for this specific item using the Hot Item Finder by entering “For Our Children” in the keywords box on the left hand side and ensuring that the “only show completed items that sold” tickbox is checked. The result is shown below:
Now this is starting to look interesting. We can see that 4 of these CD’s sold in the last 15 days for $17.25, $3.95, $23.82, and $26 respectively. You can see each items actual ebay listing simply by clicking on the item name in the item title field and doing this for each item in turn shows that the one that sold for $3.95 is a different CD and a German import so we can discount it for our research purposes. The others are all the same item, all used but in perfect condition and therefore the prices are indicative of what price can be achieved. So, taking the minimum price of $17.25 and calculating 2/3 of $17.25 gives a maximum buying price of $11.56.
Ok, so we have a potential CD Title, we know it sells well on ebay and we know what we need to buy it for to turn a decent profit.We now use the Arbitrage principle to see if we can turn a potential profit. In
We now use the Arbitrage principle to see if we can turn a potential profit. In 2. This number is the catalogue item number and it presents a useful check to see if we are purchasing exactly the same item when we find it.
Ok, we now need to see if we can find the item from a reputable supplier who can supply the item easily and regularly. The first place to check is Amazon.com. Amazing though it sounds its perfectly possible to find a preused item for sale on Amazon.com which is far cheaper than Ebay.com !
Checking Amazon.com shows that the CD is not available new (hardly surprising since it was published in 1991) and that used examples which have a minimum condition of “very good” are for sale at $37.50 + $2.98 shipping from Amazon seller SHINER5042. You can see a screenshot of this below.
Now you may think that this therefore means that it is not possible to make a profit but think about this for a moment. We know we can buy it on ebay.com for around $17 and it sells on Amazon for $37.50 so why not do just that? Items for sale on Amazon tend to sell more slowly than on ebay but I have utilized this technique to make hundreds of dollars per month if there is enough margin between the buying price and the selling price. To make this worthwhile I tend to set the selling price on Amazon to twice the buying price on ebay to allow for the shipping costs and the longer selling times on Amazon.
In this case, if we can buy the CD on ebay for less than $37.50/2 = $18.75 then it’s a worthwhile investment.
Back to ebays current listings, and searching for this CD shows the following 4 items, including two for sale at the Buy It Now price of $12.92 + $2.95 shipping = $15.87.
Ok, we have everything we need to make a decent profit. We can buy at $15.87 on ebay and then list it on Amazon for at least $31.74 which is considerably cheaper than the current lowest used price and therefore it is likely to sell reasonably quickly. The shipping on Amazon is $2.98 which is obviously paid by the buyer. The total profit is around $15 for what actually amounts to around 10 minutes work when you get used to carrying out these types of deals.
Ok – time for another real life example.Example 2
Let’s use Hot Item Finder again to see what else we can find. Entering the same search criteria as before, we get the following list, on which we can see a CD called “The Clash – Live at Shea Stadium” which attracted 14 bids and eventually sold for $17 + $3.90 shipping. Clicking on this listing shows this to be a pre-used CD described as “Like New”.
Using Hot Item Finder again but searching specifically for The Clash and Shea Stadium returns 7 items at an average price of $14.20 + $3.00 shipping = $17.20. Let’s see if we can find this at the right buying price as detailed previously, which means 2/3 of $17.20, which is $11.52 or less. Checking Amazon, and searching for this product shows it to be available at $8.52 + $2.98 = $11.51 from MEGAHITRECORDS. You can see this below:
Ok, so worth purchasing at $11.51 and then listing on ebay at around $17 plus shipping for an easy profit of around $8 for a couple of minutes work. Here’s another cool trick that I use which saves some work and also reduces the risk of not selling the item on ebay.
Check that the Amazon seller has a number of the specific items that you need, by trying to purchase, say, 5 items on Amazon, stopping short of actually placing an order. If you get to the point where Amazon prompts you to “Place Your Order” then it has the required number and there is no restriction on selling that number to you. Some sellers do have restrictions so it’s worth checking.
Now list the item on ebay, remembering that you don’t yet have the item to sell. Let’s say the item sells for $17 + $3 shipping. So we now have a confirmed order for the item and we now simply go to Amazon and enter the buyers name and address instead of your own. This means that you don’t need to be involved in packing the item and Amazon drop ships it directly to the customer, which means less work for you and also less risk since you don’t place the order with Amazon until you have a confirmed order from your ebay buyer.
You can also list more than one item at a time on ebay – I sometimes separate them by 1 or 2 days automatically using ebays time listing option, which costs a little more but saves work in listing. You then take every order received on ebay and place it onto Amazon, entering each customers address as you go. This technique can rapidly enhance profits with little extra work.
So, we now have a total of around $23 clear profit with 10-15 minutes work and very little risk. It’s easily possible to make $100 profit with 60-90 minutes work once you know what you are doing with these techniques. Let’s say you take 2 hours to make the $100 – quite a good return on your investment – and if you are prepared to put in the work, say 3 hours a day for 5 days a week, then it’s easy to see that this means a potential profit of between $2000 and $4000 each month! Be warned though, that you have to do the work – this is not a get rich while you sleep scheme!
Ok, so we have seen how to use ebay and Amazon arbitrage to identify profit opportunities for music CD’s. You can also use these techniques with other internet sellers and make good profits doing so. Here are the other suppliers that I use to buy cheap CD’s which I then resell on ebay and also Amazon.com for between 25% and 100% profit!
http://www.internet-ebooks.net/recommends/cduniverse.htmlIt’s important to keep detailed records of all purchases and sales such that you can keep improving your profitability. For example, my records showed that I consistently made very good profits on Karaoke discs which I bought from ebay and then sold on Amazon at an amazing 70% profit. Knowing this I started increasing the number of such discs that I traded and therefore increased the profits overall.
If you are prepared to put in the work then very good profits are easily attainable, simply because most people will use ebay to make impulse purchases without checking if they can find a specific disc at a cheaper price elsewhere.
It’s perfectly possible to use these techniques in any country where ebay has a presence and where other internet sellers exist. For example, in the UK, the technique works extremely well using ebay.co.uk and Amazon.co.uk, together with a number of internet CD sellers who reside in the UK.
One word of warning, however – you may think that you can use, say, ebay.co.uk to find out top selling CD’s and then find copies to buy at Amazon.com. The problem with doing this is that any CD’s bought into the country will be subject to import duty and tax and therefore profits are easily wiped out. My recommendation is to buy and sell in the same country to minimize taxes, duties and exchange rate fluctuations. This does mean you need to reside in that country. I have bought and sold in the US (with the products never leaving the US) whilst residing in the UK without any problem. Always be as professional as you can be and ensure top quality customer service and you will soon find yourself making some fantastic profits simply by buying and selling music CD’s.
One example of this is to make sure that your listing looks professional to maximize the selling price. I use the following template (the example is one for another money maker that I found using Hot Item Finder to list CD’s but you can easily adapt it for any CD.