by Timothy Justice

Created on: February 27, 2009

We've all heard stories of eBay millionaires. Ordinary people just like you and me who buy items at estate sales, flea markets, or auction, and sell them for huge markups on eBay.

Yet for every eBay success, there are millions of failures out there, people who can't seem to even recoup their cost of investment. While they may be sincere, they often don't follow the necessary model to do business online. Here are a few simple rules to help you avoid the most common mistakes:

1. Know your product: Whatever your area of specialty, know what you are buying and selling, know what constitutes fair market value and when an item is a good buy when you are purchasing it. This is when eBay retailing differs greatly from brick-and-mortar stores. While you might buy something at 50% of retail for resale in a brick-and-mortar store, you need to buy at an even lower price for online retailing. This is because Internet shoppers have access to a wider variety of products and will pass yours over if it's not a reasonable bargain.

2. Know how to spot a fake/inferior product. This goes hand in hand with #1. If a deal is "too good to be true", try to find out why. There may be legitimate reasons, but there also is a whole cottage industry built on scamming potential resellers.

A few years ago I was in an antique shop and watched a couple of people with an antiques appraiser. They were looking at a Mickey Mouse doll that the seller had advertised as an original. The appraiser took a pair of fingernail clippers out of her pocket and clipped a small thread off of the doll. She then lit the thread and observed that it was synthetic, not cotton, and thus had to have been new enough not to be an authentic original. She probably saved the pair a couple hundred dollars just by knowing how to spot a fake.

3. Research listings for like items. Lookup the item on eBay and check the categories, prices, and descriptions of competing sellers. Don't look at the listed price; instead, look at the sale prices. This will tell you how much people are willing to pay.

4. Buy a good quality digital camera and setup an area to take pictues. The camera doesn't need to be great quality (3 megapixels will do), but you need to take pictures that give a fair description of the product. If you absolutely MUST find a stock photo online, be sre to clearly note that it is not an actual picture of the product. This will save headaches later on.

5. Close auctions at peak times. An auction that closes at 2 AM is unlikely to get much in the way of last minute bids, or "snipers". While snipers get a bad rep, they can often drive up a bid very quickly. I recently made an online purchase where the price of the item increased 50% in the last 4 minutes of the auction.

6. Don't be afraid to ask for help. You want to drive up your eBay rating. There are easy ways to do this, and veteran eBayers will help you to accomplish this. Don't be afraid to ask; their business depends on the growth of the community, so many will be more than happy to help.

Above all, set your goals realistically and have fun. Buying and selling on eBay can be VERY rewarding if you put out the time and energy to make it happen.

Learn more about this author, Timothy Justice.
Click here to send this author comments or questions.