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How to Make Money from Online Auctions
Do you need to empty your loft? Are you clearing space in your warehouse? Would you like to do something with the unwanted gifts cluttering your home? If you have items you’d like to get rid of, and they’re in good condition, you should consider selling them on an online auction website.
How Online Auctions Work
To use the auction site you need to register. Most sites have a simple registration form.
Most sites will ask you for debit or credit card information when you register. These details are used for identity verification.
After your account is set-up, you can start using the online auction and make the most of the site.
Buying
On the auction site, registered members bid on an item. This bid gives them a chance to buy or “win” the item.
If the site offers proxy bidding, then a member can place a bid automatically on your behalf. You have to give permission for the purchase.
To place a proxy bid, you have to enter the highest price you’re willing to pay. If you’re outbid, the site will automatically make incremental bids, up to your maximum bid amount.
Proxy bidding allows you to win an item for less than your maximum. However, if a person bids above your maximum bid, then you will lose the item. So, you have to make sure you use your absolute maximum in the proxy bid.
For example, if the existing bid is £1, but you know you’re willing to pay £5 for the item, you can place a proxy bid. That way you don’t have to sit at your computer waiting for the clock to tick down.
The system will update your price each time you’re outbid and will stop after the bid passes £5. You can get a lower price if the other bidders quit before it reaches your £5 limit.
You’ll usually receive a confirmation email if you place the winning bid. Then, you can arrange payment with the seller and get shipping or delivery information. Here are some auction tips.
Selling
On auction sites like eBay, if you’re selling an item you usually need to make an item listing.
Be Careful
Never ship or delivery an item to a buyer before receiving payment, no matter how nice they appear.
Creating a listing involves creating a listing title, a detailed item description, adding a clear photograph, choosing a category of similar items and deciding the starting bid.
You may also need to enter the item’s location, if there is a delivery charge, whether or not the buyer can pick up the item themselves, and which payment methods are preferred.
You will need to collect payment and arrange for delivery or pick up if your item is sold.
Don’t worry if your item does not sell the first time, you won’t be charged a valuation fee. Some people find success in online auctions after posting their listing a second time.
eBay Fees
eBay and sites like it, charge an insertion fee each time you list an item. If the item sells you will also be charged a valuation fee.
Save Money
If an item starting price is 99p, you can create the listing without paying the insertion fee.
Always remember, the starting bid price determines the insertion fee. When the item is sold, the final bid is used to determine the valuation fee, which is a percentage of the sales price.
You can enhance your listing with some of the extras, including the “Buy it Now” feature or extra phones. Including additional photos might improve your chance of selling home items. The “Buy it Now” feature allows the buyer to buy the item at a set price rather than going through the auction process.
Be aware that if the buyer uses Paypal or some of the other payment processing services you will be charged a fee. PayPal charges 1.4% to 3.4% of the total price and a 28p transaction fee.
Buy Low and Sell High
As with any business venture, you want to keep your expenses low by reducing your overhead and sell your products at the best price to maximize profits. But how do these concepts apply to online options?
Buying Low
Many people set their listing’s starting price at 99p so they don’t have to pay the insertion fee. Many of these items will not be bid on. That means you can bid 99p and get these items at a low price.
Use an online auction search tool. Lastminute Auctions can search for items that have a low price and an expiring listings.
You can also search for misspelled words or alternate spellings like “color” and “colour”. If a person cannot find a listing because the work is misspelled then you may be able to get these prices for a bargain since buyers won’t be able to find them.
Before bidding, make sure to look at any additional costs like delivery charges. Sometimes the delivery charge can push the total price up significantly.
Don’t assume every item on eBay is a bargain. Price check on other online retailers before placing a bid. Always make sure you’re comparing the same items, look for model numbers or detailed information to make a fair comparison.
Don’t “bid early”. Your bid will alert other customers that someone else is interested which could drive up the price.
eBay has around 187 million users. It’s the most popular online auction site. So, you might find it easier to pick up bargains on less popular online auctions like eBid.
To place the last minute bid, you can try sniping software like Lastminute Auction.
Selling High
You can start with online auctions by buying a few cheap items. You can use these sales to build up your feedback rating. Since some buyers and sellers don’t like dealing with newbies, having a good rating can help you sell more.
You don’t have to limit yourself to selling items you find online. You can sell things you find around the house or in your local community.
If you can bad a bargain, you can sell it for profit. Be creative, look for items to sell at:
- Garage sales
- Small auction sites
- Estate sales
- Closeout outlets
- Clearance sales
Look for items that offer you a good profit margin.
You can also find bargains on online auction sites by looking for items that have poor listings. By adding a good description and some images you can resell the item for a higher price.
If possible look for new items. For example, if you receive a video game or DVD you don’t want, just leave it in the original packaging.
People like to buy brands, so make sure to list the brand names in the description. For example, you should list that you’re selling a Toshiba TV or Beats headset. If you include the brand in the title it could bring additional views to your listing.
If you know someone who is an eBay whiz, ask them to sell your items for a share of the profits.
When creating a listing, set it to end at a time when people are home. Some of the best times are Sunday in the afternoon or evening. The worst time is on Monday. You want to choose a time when the possible last-minute buyers are available.
Take advantage of special promotions on the auction site. eBay sometimes offers free listing days on the weekends, this can help you save money on your listing.
When creating your title, think like your potential buyer. What words would they use to search for this item?
Lower priced items are generally more likely to sell. Consider that fact when choosing your starting price.
Do research about the item you’re trying to sell. What is the average selling price of similar items? Which description sold best? What keywords were used in the titles of sold listings?
Use a spellcheck program on your listing to ensure no one profits from your misspellings.
Consider kicking your listing down by a few cents. Choosing a £14.99 listing price instead of starting with £15.00 can save you 15p in fees.
Use a classified ad site like Gumtree if you want to avoid listing, valuation, and other online auction fees.
Do’s and Don’ts
We cannot guarantee that you’ll make a fortune using online auctions, but these tips can keep you from having to list your item for a third or fourth time.
- DO honestly describe your item and include the details of any damage.
- DO use a safe and convenient payment method like PayPal.
- DO list your item in the proper category.
- DON’T charge a high rate for postage. It turns off buyers.
- DON’T use unclear, out of focus, low-resolution images of the item.
- DON’T pay to have a reserve fee. It will turn buyers away.
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