My eBay Business Part 1 – How it all started
I have decided to post ‘our story’. This story is all about our eBay business. Our business now sells two main product groups, fishing products and musical instruments.
To give you a rough idea of our size at the moment, we lease warehouse space, we order goods in 40′ containers and we employ full time staff. Each day our products (which we pick and pack into cubic metre air freight cages) are picked up by truck and fork-lifted on.
We use some 3rd party software to help us manage our inventory, listings on eBay (in Australia and North America), our webstore, and some CPC sales channels. We also have software designed and developed in-house to manage and create SKUs that we sell, process shipments for picking and packing, and other things.
We sell many thousands of items per month. So we are not the largest, but on busy days it feels like we are up there :)
How did it all start?
Our business started the way most start. With an idea. And a need to develop another source of income. In 2005 we realised that we should find some more sources of income to grow our business interests, grow our own incomes, and add some stability (more eggs in more baskets).
So our investigation into eBay began. Of course we knew of eBay quite well. We had been operating a web publishing business since 1996 (and still do) so we know the online marketplace in Australia pretty well. We had retailed online and still were at that stage with our online automotive performance parts store but it was low margin stuff at the end of the day and not making a huge amount of profit.
In looking at Ebay we discovered just how large their marketplace was, even in Australia alone. We had the IT skills to sell online, we had the staff to do it as they worked for us with the automotive retail store already. We just had to find product.
So how do you make the most margin possible when selling an item? The answer is usually to either make it yourself, or at least buy it direct from the manufacturer.
Sourcing Products
Immediately we thought of China. My business partners and I had been reading about China’s manufacturing industry, it seemed like 95% of all products in local Kmarts and Target stores were Chinese made so we thought we would look for suppliers over there.
Enter www.alibaba.com. The website that helped us find our first sample products, our first suppliers, and our start on eBay.
I can remember us somehow deciding to send off some email enquiries on a few different product groups. My partner sent some emails off to fishing manufacturers (well, they ALL say they are manufacturers even if they aren’t) and got some responses pretty quickly. When we looked at the prices we honestly thought they had made a mistake with the decimal point.
Seed Capital
With a plan to buy a few sample items from our chosen manufacturer we decided to put some money up and give things a go. We needed to set up an eBay account, sell some items, develop a listing page and strategy and after we had a few feedbacks, start an eBay store. First things first we needed to get some products over and actually sell them to see what sort of price we would get.
At the time there were really no ‘generic’ brand reels being sold on eBay in Australia so we were treading on virginal ground.
And the amount of capital we used to start our business? $7000 AUD.
How hard was the road that followed? Well, stay tuned for part 2…
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