Lessons Learned From Making Money On The Side

The headquarters of eBay in San Jose, Californ... — The headquarters of eBay in San Jose, California. Photographed on August 5, 2006 by user Coolcaesar. (Photo credit: Wikipedia)

For many of us, we primarily work a full-time, 9-5 job. While this is all well and good, one day while running through various calculations to see when I could retire, I made a startling discovery: if I work a regular full-time job and save money, I’ll have the chance to retire around age 65.

Some reading this might get excited, thinking that retirement is a possibility. For me, it was the opposite. I didn’t want to work until I was 65. I wanted to be done with work as soon as possible so that I could do whatever I wanted. (This doesn’t mean I wouldn’t work, just that I didn’t have to if I didn’t want to. I’ve always seen myself doing something on a part-time basis.) I realized I needed to find ways to generate additional income outside of work and make some money on the side. Enter eBay.

My Adventures With Reselling

I first started reselling with eBay back in the late 1990’s. If you remember back that far, eBay was the mecca of swapping items for cash. For the first time ever, you could find that rare item you were looking for because someone, somewhere in the country had it and was selling it on eBay. Add to the fact the novelty of eBay, and people were buying things like there was no tomorrow. I quickly took advantage of this.

First, I set out to yard sales. I didn’t know what would or wouldn’t sell on eBay. This was before Smartphones when I could just check eBay regardless of where I was. So I just took a chance and used my judgment. This worked well for me. My first purchase was a crystal tea cup set of four cups and four coasters. I paid $0.25. When I went to pick it up, one of the worked yelled to me that I bought all four boxes for $0.25. I ended up selling each set for $35-40.

From there I moved onto old magazines and records. I went to a yard sale that had stacks of old Life magazines. I had no idea what was valuable, so again, I used my judgment. There were a handful from the 1960’s with JFK on the cover. I know people still talk about JFK so I bought them each for $0.25. I sold them as a set for $10.

Not All Good Times

I don’t want this to sound like everything I bought turned to gold. There were some things I bought that I might have been able to make a nice profit on, if I knew how to best describe it. I bought a wooden thing (see I still can’t describe it!) that hangs on the wall. It has hooks for keys, but also a few small drawers and a shelf. I think the inability to describe it and categorize it ended up costing me.

Then there was the bike. I have no idea what I was thinking, other than I simply got caught up in the moment. It was a road bike in mint condition. The seller was asking $5 for it. I knew I could easily get $50 for it. But I didn’t consider the shipping part of the equation. It ended up sitting for a few years until I unloaded it on Craigslist for $15.

Lessons Learned

While my story is exciting and sounds like making money on eBay is quick, easy and fun, that couldn’t be further from the truth. Selling on eBay has completely changed, so much so that I rarely do it nowadays because of the high fees eBay charges and the fact that so many people are scouring yard sales for deals, the deals are few and far between. If you still want to give it a try, here are some guidelines:

Know What You Are Selling: While it was great to make a huge amount of money on the items I talked about, you need to know what you are selling. My best friend bought a painting and sold it as an oil painting. It looked like and oil painting to both of us, but it turned out it was a print on canvas. The buyer was not happy.

Pick a Niche: Related to the above point is to pick a niche that you are familiar with. If you love and know everything there is to know about salt & pepper shakers, focus on that. The more you stay in your area of expertise, the increased odds of success you will have.

Understand The World: Be aware of what is happening in the world and how it affects what you are selling. When I was making money on eBay, I signed up for the CD clubs and got 10 CD’s for $0.01. I bought the most popular CD’s and turned around and sold them for $15 each on eBay. Then Napster came along and the CD well dried up rather quickly. If I was unaware of Napster, I would have continued to buy CD’s and eventually would have been left with a stack that I couldn’t get rid of.

Know Your Margins: There is no point in selling items if you aren’t going to make a profit on them. Understand how to calculate return on investment so that you know whether the products you are working with are profitable or not or even which product you should focus on.

Get Creative: When I was selling on eBay, profit was generated simply from selling the item for more than I bought it for. Nowadays, there are many other ways to increase profit. You can buy things with cash back credit cards, take advantage of new credit card sign up bonuses, and online shopping malls to name a few. Any one of these could easily add an additional 5% or more to your profits, which is huge. So be creative when looking to keep your costs down.

Final Thoughts

I’ve since moved on from eBay for the reasons I mentioned early and now am generating income with Amazon and through blogging. I’m sure if you find me in 10 years, I’ll be doing something else. But that is why I do this. It’s exciting to me to find ways to generate income from everyday things and situations that the average person doesn’t recognize. I’m always looking for new ideas, so feel free to share in the comments below or head over to my blog and email directly.