How to Scale an eBay Business (4 Business Growth Models)

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Last July I hit the wall…again.  This was the third business model I had tried on eBay and it was not working as I had hoped.  Sure, I was making money.  We were averaging $3-400 a day in sales but wanted more.  Much more.  Like 10x that. 

Digging through thrift stores all day, every day, and then listing into the night had left me feeling like a grubby, burned-out bottom-feeder.  I was always hoping that the very next thing we tried would be the big break that we needed, and our reselling business would start spiraling upward and making us the money we hoped for.

But it wasn’t to be.

It would take several more changes in our structure and business models before we finally started to figure out how to really scale our business.  Now, there are several ways to go about this, and I don’t claim that the way we use is the perfect fit for everyone.  Rather, let’s go through each of the ways you can take your business to the next level, and you decide what works for you!

Creating A Business Model For Your eBay Store

The first step of coming up with a travel plan is deciding where you want to go.  If you don’t know what your goal is on eBay, how on earth do you plan on getting there, and how will you know when you do?  Once you have a goal in mind, here is the kicker: it’s going to take a whole lot more work than you expect.

In fact, in The 10x Rule, Grant Cardone contends that reaching your goal will take 10x longer and 10x more work than you expect!  So what is the way forward?  Taking MASSIVE action.  If you want to sell drastically more than the average eBayer, then you need to act in a way that is different.  Massive and drastically different.

Unlike most businesses, you can just slide into selling on eBay and make your first sale within hours or days.  You don’t need a business model before you start.  You don’t raise capital or consult a marketing service.  But eBay is no different than anything else you might do – if you want to run a business, treat it like a business.  That means having an actual business model and procedure in mind for how you do things.

Hoping to find better things at a thrift store is not a business growth model.

If the extent of your scaling strategy is: “Oh well…I hope to find better things.  And sometimes I go to different thrift stores…” then you have some thinking and defining to do.  Before you look at scaling, make sure you know what you’re trying to scale.  Do you go to thrift stores, then sell used crap online?  Or do you strategically plan on how to acquire products and maximize efficiency and profit within your growing business…

4 Ways To Scale An eBay Business

1. Work More Hours

Working more hours is the absolute worst way to try and scale your business.  The only reason it is included on this list is that it is the first method most sellers try (and the only method some ever get to).  The problem is, as a beginning seller, selling on eBay is directly linked to your time.  You have a finite amount of time, so eventually, you won’t be able to grow any further.  To scale effectively, you need to have a resource with infinite potential. 

For example, you sell on eBay out of a large warehouse and want to make 10x your money this next year.  Can you work 10x as many hours this next year?  Well, we tried putting in 140-hour days, but it just didn’t work out.  But could you hire more people?  Of course!  Could you hire enough people to make 100x as much money?  Of course, you could!  People to hire are an infinite resource! (You would run into other bottlenecks before that point, but you get the idea).

2. Sell Better Stuff

Kyle MacDonald was sitting at his desk one day, pondering how he could afford a house.  He decided that the best way for him was to take the red paper clip sitting on his desk and, using his bartering skills, trade it for better and better things until he had a house!  14 quick trades later, he swapped a paid roll in a movie for a two-story farmhouse in Kipling, Saskatchewan. (True story!)  If he wanted to continue, I’m confident that he would soon be trading a mansion for a downtown skyscraper!

If you are limited to sourcing at thrift stores, you are probably already selling the best items you can.  However, you must understand that because you have a limited amount of time, you need to be making more money per transaction.  If you can only list 20 items per day consistently, how can you make twice as much per item?

The first answer is to stop selling crap!  If you want to dine with kings, quit sitting down at the paupers’ table every day.  Go out at earn an invitation!  So many sellers spend their days grubbing at the Goodwill outlet finding low-dollar items to sell.  They’ll tell you, “But the ROI is too good to pass up!  I can buy something for $.25 and sell it for $15!”

While that may be true, you cannot spend ROI.  You spend dollars.

If you want to grow your business, it makes much more sense to double your money on a $300 item than spend your day listing, inventorying, and shipping items only to find out you’ve only made $100.  So, create a baseline “profit per item” threshold and refuse to break it.  If you don’t want low-dollar items in your store, stop buying them and listing them.

According to UpNest, the national average for a real estate agent’s commission is 5.4%.  The average home price in my zip code is $654,500.  Imagine making $35,000 per sale!  While that is an extreme example, if you are a solo act (or maybe a reselling couple), and have some capital, you simply have to find better items to sell and cut out the crap!

For a video explanation of this concept, check out CraigslistHunter on Youtube

3. Manage Your Time

Another way an eBay solo seller can “work smarter” rather than harder, is simply to find a way to do things more efficiently.  What if I told you there were days that I was able to source, list, and inventory over 200 items all by myself?  While it’s not something I’m able to do consistently, buying identical items in bulk or sourcing items in lots can free up huge amounts of time.

Buying Bulk Lots To Resale

The first glimpse we got into bulk buys actually happened at a thrift store.  A local Agnes & Dora seller (a MLM clothing company similar to Lularoe) had donated their entire stock of tank tops.  We picked up 112 tank tops in 3 colors at $2 apiece, and were able to picture and inventory them all in less than two hours!  For a total of 3 listings, we had 112 items for sale.  Since then, we have steadily been selling a couple a week, priced $12-20.  This was almost 18 months ago and, as I’m writing this, we have about 15 of them left.  For less than 3 hours of total work (not including the time we’ve spent shipping), we have grossed over $1300.  While it’s not the only way, buying in bulk deals in one of the most reliable ways we’ve found where we end up profiting over $300 per hour!

You may have to branch out a bit from your comfort zone to find them, but our favorite places to find bulk deals are: on eBay (buying lots), through retail arbitrage (we routinely clean off clearance shelves), or through liquidation auctions.  If you’re buying things that won’t expire, remember: “If one is good, two is three times better.”

Buying Lots

Buying lots is one of the easiest ways to “buy yourself more time.”  By adding money into your business equation, you are freeing up the time you would spend sourcing.  While it’s not exactly a tit-for-tat exchange, you are now free to spend the time you would have spent sourcing, listing!

We buy several lots every month from overstock sites such as BStock and liquidation.com (read about our liquidation.com experience). While you’ll be hard-pressed to do more than double your money from these lots, it does allow us to source higher dollar items, find multiples, and list 50+ items per day.

4. Hire Help or Outsource

The best way to grow your business is to simply do more of what you’re best at (meaning: do less of the rest).  If you spend all of your time doing assembly line work that a monkey could do, you are losing all the time you could be spending on more innovative and lucrative tasks!

Here’s a story to illustrate the point: when two young graphic designers started an innovative map drawing company, everyone loved their designs.  Soon, they were spending more time packing orders and dropping them off at the post office than they were designing.  The problem is, pretty much anyone off the street could pack an order.  So, like these two, you need to identify where you can add the most value to your business (for most of us, it’s the knowledge we have that lets us source efficiently), and spend more time on it.

Spending more time on one area of your business, naturally, means you need to find another way to get the rest of it done.

Typically, this means hiring someone.

We may be uniquely positioned to give advice on this front as this is where we’re currently at.  Here is our recommendation: find an employee, not a partner.  Bringing someone all the way into your business (meaning they do whatever you need them to, such as helping you source, list, ship, etc.) is asking for trouble.  Instead, identify a single aspect of your business and outsource it.  The easiest things (in my opinion) to outsource are photographing items and shipping things.

If you’re nervous about letting people into the back end of your business (as we were), you can find someone to picture items for you at a set rate.  For us, that meant paying a local college student $1 per clothing item for pictures and measurements.

Whatever you have your new employee do, be very specific about what and how you want them to do things.  Stay tuned for the blog post where we share our employee contract, how we hire and divide jobs, and how to eventually turn your eBay business into passive income through hiring help.

Until then, get back to work!