- Richard S. achieved financial independence by reselling items on eBay.
- He advises beginners to start by listing preowned items around the house to learn the process.
- Next, niche down and study your category to understand what customers want and what they don't want.
Reselling items on eBay can be an effective way to bring in extra cash. For Richard S., who prefers not to share his last name for privacy reasons, eBay was his ticket to financial independence.
The eBay expert, who's been reselling on the platform since 2008, recommends starting by listing what you already have lying around your house.
"Evaluate the stuff that you don't need. Maybe your kid went off to college and left a bunch of video games. Maybe you lost a bunch of weight and have a bunch of clothes in your closet," the 40-year-old owner of Technsports told Business Insider. "That way there's no money involved, and you can learn the platform and the process."
If you enjoy the process and want to take your online store to the next level, Richard has advice for sourcing profitable products.
1. Niche down
After experimenting with reselling electronics and clothing, Richard preferred apparel and niched down.
He studied the category and listed hundreds of different items to figure out what sells and what doesn't. His general strategy is to buy "the staples," brands like Nike, Lululemon, and Ralph Lauren that people wear daily, he said. "I'm not going out and buying Gucci. I'm not buying Louis Vuitton. I'm buying everyday value items that everybody can afford. It's a much larger market."
With experience, he learned that certain items within the big brands do better than others.
For example, he figured out that while a regular Nike Dri-FIT shirt might sell for $10 to $20, one with a Roger Federer or Rafael Nadal logo might go for $30 to $70, or even up to $100 if it's the same style one of them wore in a recent tennis tournament. With Ralph Lauren items, he's looking for something specific, like a polo with a big pony logo and "Germany" spelled out on the front: "There might only be 40 of those on eBay with 120 of those sold in the last 90 days, which shows the supply has not met up with the demand and you can sell that shirt every single day of the week for $60 to $80."
By niching down, you can become an expert in your category, whether that's pre-owned clothing, jewelry, or sports equipment, and understand which nuances customers care about.
As Richard learned from years of sourcing items, you can't walk into a thrift store or flea market and expect to find great items right away: "It's a little bit of trial and error. There is a learning curve and you have to acquire the knowledge and the skillset."
2. Use tools and data to figure out what customers want
To figure out what customers want, look at what is actually selling by browsing the "sold items" section of your category on eBay for 30 minutes a day, he advised: "What is selling for a great price? What is selling for a great velocity? Because you can't just put garbage, for lack of a better term, and expect a great result."
Sourcing items based on data will help you avoid the common mistake of buying what you personally like and assuming other people will as well. In the reselling business, "it doesn't matter what I think is cool," said Richard. "It matters what the customer thinks is cool."
The combination of assessing the market, experimenting with various listings, and general experience will set you up to find what he calls "home run items," such as a rare concert shirt that might go for a couple hundred dollars or a jacket from a National Championship-winning college football player that sells for a couple thousand dollars. "If you go out there with the most amount of information and you give yourself the most amount of opportunities you will run into more of these home run items."
He's not seeking these rare items on a day-to-day basis, he noted: "When people hear these conversations, they think you just magically find all these $100 or $500 or $1,000 items. You do find them. But the bulk of the items that you find are going to be more of the everyday value and common items that are in high demand. They are out there, but you have to touch a lot of items and you have to give yourself a lot of opportunity to be able to find them."