Making Profits Tutorial
Making Profits III
If you are going to buy and sell cars, you need information are car values. There are two easy resources to help you determine car values in advance of auction. One is the Kelly Blue Book, which can be purchased for under $10 on Amazon.com. You can take this little book with you to the actual auction and use it as a reference for values.When car dealers take a vehicle in on trade, they often look to get it for several thousand dollars below low bluebook value. If that is their strategy, it might be a good one for you to adopt as well. Also, the older the car is, the more likely there will be a mechanical issue, so keep that in mind when bidding as well.
Many of the federal car auctions list vehicle identification numbers in advance of the auction, which you can use to do a search on CarFax.com, which for a small fee gives you the history of the vehicle. It will tell you, for example, whether or not the vehicle has a salvage title, the kind of title a vehicle gets after being completely wrecked. This kind of information is valuable for forming bidding strategies and could save you a lot of heartache later on.
In the two categories we have been discussing, cars and jewelry, making assumptions about resale values or liquidity in the market can cause you loss. The most common mistake is the notion of “Flipping.”
Some people go into government auctions thinking they will buy a diamond ring or a Mercedes Benz with the intention of running to either a jeweler or car dealer and immediately flipping the item, in other words selling it instantly to another party that normally buys at wholesale to make a quick profit. This almost never works out.
Not only do jewelers and car dealers have their own wholesale sources for items, which they tend to view as trade secrets, but they also look at anything you buy via the Internet or Government Auction as lost business for them. Many of them will be annoyed by your offer to sell to them. They want you to buy from them, not sell to them.
If you ask them what the ring or car is worth, you might not get the truth. They will probably try to buy the item from you at a price that would constitute a form of legalized theft and you will be left with the feeling that you overpaid for the item, even if it’s not true.
In the case of jewelry, only a written appraisal by a qualified gemologist should be considered for value, and even then, as we stated before, it is not an indication of market value. It’s highly subjective and relies on the opinion of the individual gemologist. In the absence of reliable standards, the only thing left to do is comparison-shopping. Go to the mall, look online, and in mail order catalogs. Talk to people in the industry. Look at what similar items go for on eBay, since that is your most likely sales channel.
Instead of trying to make a quick buck, research your market thoroughly and look for the long term potential. The more knowledge you have about a specific market, and Government Auction Items are certainly not limited to jewelry and cars, the more likely you will be able to buy and sell profitably.
Knowing your resale market means doing research before you buy, regardless of the type of item. What you find out may surprise you. Sometimes eBay will not be an appropriate channel for resale. For example, we recently researched values on Silver Age Marvel comic books. For anyone who doesn’t know, this period in comic book history began in the early 1960’s with introduction of the Fantastic Four, Spiderman, the X-men, and other names that we now recognize as blockbuster movies. The original issues of these comics are collectibles that are available through several sales channels. Ebay is the most obvious one, but what we found when we researched it was that it was also the lowest-priced market, probably because of trust issues involving authenticity and delivery. Comic books can be a big-ticket purchase and people don’t like to gamble with thousands of dollars, so eBay is more of a wholesale channel, great for collectors who are willing to take some risks that the listings accurately represent the items they see advertised.
On a side note, here’s a tip: You can learn just about everything you need to know about creating a successful eBay career by putting yourself in the shoes of a buyer. Look at items that interest you and purchase some of them. Once you’ve done a few deals as an eBay bidder, you will have a much better point of reference as an eBay seller.
Ok, back to the comic books. If you were able to acquire comic books through government auctions or some other source, listing on eBay would be the simplest way to sell them, but not the one that will yield the most profit. The more profitable channels are the tradeshows and retail stores. Now if you only had a few comic books, selling them at a tradeshow wouldn’t be feasible because the cost of a booth would be prohibitive. Opening your own comic book store would be even more daunting. So how would you do it?
Well there are several options. 1. You could take out a free classified on www.craigslist.com, which by the way should not be overlooked as a possible source for buying products. The advantage of listing your item for sale on craigslist.com is that it’s free and you might be able to get your asking price without having to pay commissions. 2. You could take it to a dealer and have him sell it for you on consignment, which they will typically do at a 20% commission, based on the dealers we spoke to at a comic book convention.
Now 20% sounds like a lot, but not if you consider that in some cases they will get twice as much for the comic book as you would by selling it yourself on eBay, without any upfront fees. This can be thousands of dollars in some cases and it suddenly makes 20% seem a lot more reasonable.
The point of this example is that the only way to buy and sell comic books profitably is to know how the resale market for comic books works. While this is probably too much effort for the average person, someone who loves comic books will view it differently. Since they are familiar with the products, they tend to pick up the finer points of the market quickly and it won’t seem like such a burden.
Once you research a market for a type of item, you will know whether or not eBay is an appropriate sales channel for the items. People do make profits selling on eBay, but the price they pay for the items they resell has to make sense for what the market will bear. Again, market knowledge is the key to success. Otherwise you are flying blind, and that makes as much sense on eBay as it does when flying a plane.
