trading

This page considers the shape of C2C trading on eBay and questions such as whether people can make a living in that auction space.

It covers -

• introduction
• statistics
• riches as a power seller?
• primers

     introduction

A theme in mass media coverage of eBay and competing C2C services is that it is possible for enthusiasts to significantly supplement their income or even make a living by trading on those sites.

That theme is reflected in a rash of primers, some of which we have highlighted below, and in newsletters, workshops or other gatherings that are promoted as imparting the secrets of 'power selling'. It is similar to claims that ordinary people - equipped only with an internet connection, boldness, a little savvy and even less capital - can make a living by day trading (ie buying and selling shares online). It has often been accompanied by pronouncements on disintermediation and the emergence of online global markets, in which major retailers supposedly have the same status as hobbyists and other individuals.

The notion of happiness and economic independence through a spot of C2C trading over the kitchen table each night is attractive, particularly for people who lament the "soul-less" nature of modern retailing and praise the supposed authenticity of 'impromptu' markets such as car-boot sales. However, in practice few people are likely to make much of a living by trading on eBay and its major competitors.

     statistics

eBay Australia indicated in 2006 that 2,000 people were making a living by trading on eBay. Elsewhere it has been claimed that globally some 480,000 people (out of 119 million members) made a living on eBay, as of early 2006 (supposedly up from 430,000 in 2004). 2,000 is not a very big number.

In responding to queries in 2006 we noted that overall there is uncertainty about C2C statistics, for example -

• who is buying and selling
• the demographics of those market participants
• whether they are making money by trading.

That is consistent with uncertainty highlighted elsewhere on this site regarding online activity and populations. It is partly attributable to the unavailability of some data (you can for example identify that I - or merely an avatar - sold item x on eBay but can not necessarily determine whether I made a profit). It is partly attributable to disagreement about definitions and values ("making a living" = pocket money or riches?).

It is also attributable to the muddiness of much data. Online fora for example often boast very large membership numbers but many of those members/accounts are inactive (typically over 80% have not been used in the past month) and individuals often have multiple memberships.

     riches as a power seller?

Can people make a living selling collectibles? Contrary to some claims that it is easy money, the answer appears to be that it is getting harder.

One reason is that ongoing access to supplies can be difficult. Once you have unloaded the contents of your closet, your garage or late aunt Theodora's house it is a real challenge to find enough items to sell each week, month after month, to keep your lights on.

Another reason is that the market is more informed or more transparent: in a market with a million sellers or even 10,000 sellers you are unlikely to be able to keep charging a meaningful premium (in contrast to offline environments where, say, you were buying off a stall and had no idea of what was on the stalls in the next suburb, city, state, country.

A third reason is that there are transaction costs - sometimes you are bilked by the buyer or seller, the sale may be instant but delivery still takes place on terra firma and so there are delays, someone has to pay for shipping. (Who is eBay's best friend? The entities that deliver the stuff that is bought and sold ... they are often making more money than the buyers and sellers.)

     primers

As with the domain name industry the success of eBay has spawned a range of businesses that claim to assist participants (eg provide an individual with the secret skills to become a 'power seller') and texts that build such skills.

In considering some of those texts a jaundiced observer might conclude that the people making the most money are those selling secrets or snake oil.

Primers include Making a Living from Your eBay Business (Indianapolis: Que 2005) by Michael Miller - revamping his Absolute Beginner's Guide to Launching an eBay Business (Indianapolis: Que 2003), eBay Strategies: 10 Proven Methods to Maximize Your eBay Business (New York: Prentice Hall 2004) by Scot Wingo, Make Big Profits on Ebay: The Ultimate Guide for Building a Business on Ebay (Entrepreneur Press 2005) by Jacquelyn Lynn & Charlene Davis, What to Sell on eBay and Where to Get It (New York: McGraw Hill 2006) by Chris Malta & Lisa Suttora, The eBay Millionaire: Titanium PowerSeller Secrets for Building a Big Online Business (New York: Wiley 2005) by Amy Joyner and How to Buy, Sell, and Profit on eBay: Kick-Start Your Home-Based Business in Just Thirty Days (Collins 2005) by Adam Ginsberg.

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