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How do you make a living selling games on ebay?

Discussion in 'Business News & Resources' started by JustCraig, Jan 5, 2010.

  1. JustCraig

    JustCraig

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    I have noticed a few posts over the last couple of weeks asking for suppliers of brand new games. The more experienced members try to warn them off, yet people are adamant they want to sell the latest video games on ebay. So people post suppliers contact details. Within hours, and like clockwork, you see the same replies - You can get these cheaper on Play.com. Where do Play get them from? How can they sell them so cheap? - I did my best to answer this question, as have many before me.

    But no self respecting entrepreneur would fall at the first hurdle. So the quest for wealth and fortune continues (and good on you). However have you actually sat down and worked out how many units you will need to sell? How much money you are going to need to plough into it, even to make a modest living, let alone your fortune?

    If you want to make a living selling games on ebay (or anything for that matter), the very least amount of profit you are going to want to make is £12,000 per year (roughly minimum wage). If you break this down, that's £1000 per month, £230 per week. Just over £30 per day (over a 7 day week). Don't forget, I am talking PROFIT, not TURNOVER.

    Armed with this information, you then need to figure out how much revenue you need to turnover in order to hit your target. Not only that but you need to work out how much profit you need to make per sale and how many sales you need to generate. It sounds like pretty basic stuff, but Its suppressing how many people still think they are going to make their millions selling brand new games on eBay without giving this much thought.

    Now, you can buy a brand new game for £30 including vat, sell it on eBay for £37.99, and, if your lucky, after fees and shipping charges (standard - not recorded) you will make £3 profit. In order to generate £30 per day (£230 per week, £1000 per month or £12,000 per year) you will have to consistently sell 10 units per day and will turn over around £140,000. Easy right?

    Based on this example, how much do you think you will need to invest to start up? What if you only make £2 profit per game? Its not going to have a huge impact on your turnover but you bottom line will be slashed by a third (or to put it in context, your £12,000 minimum wage has now dropped to £8,000) and that's best case scenario. Now what if one goes missing in the post? What if 10 go missing in the post? (which over a 12 month period is very good going) What if some idiot comes along and starts selling the same game for £35? How is this going to effect you?

    I am not saying I think you should give up. Just change your game plan.....

    Now lets say instead of buying a brand new game for £30, you buy a brand new UMD or DVD for £1.50 including vat and sell it on eBay for £4.99, This time, after fees and shipping charges you will only make £2 profit per sale. So now in order to generate £30 profit per day (£230 per week, £1000 per month or £12,000 per year) you will have to consistently sell 15 units day in, day out, but somehow, that seems much more realistic.

    Now ask your self the same questions as in the previous example. How much will you need to start trading? What if some go missing in the post? What if someone undercuts you?

    I am not trying to put anyone off. If you want to make your fortune buying and selling all the latest PS3 games, then go ahead. I wish you all the luck in the world. But don't fool yourself into thinking that just because you are turning over £40 per sale, that its going to be less work that turning over just £5 per sale.
  2. SicklySweet

    SicklySweet

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    Definately food for thought in general for a beginner like me, in terms of profit and outlay, thanks.
  3. jayjrc

    jayjrc

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    that is excellent craig, it applies in all areas and well worth the read to any beginners, or even those that are falling at the first hurdle in any product they are selling!
  4. bobby dasler

    bobby dasler

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    Good read, i have noticed that you done a couple of threads lately regarding topics like this and i must say i havent read any, however i read this one and its good that you are using your knowledge to help others who are thinking of going into the same market. Keep up the good work, and i will now read all your other threads :D
  5. mickster505

    mickster505

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    As with the other articles you have written I found this a very good read. I think planning what you need to earn and working backwards from that, of course taking into account the amount you can afford to turnover is a basic often overlooked, and is something I have neglected at the moment (It currently matters not how much I earn and therefore I just go with the flow, but all will change soon!).
  6. Nick-D

    Nick-D

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    Craig,

    Good article, this mirrors my thoughts on people selling things with such low margins on ebay, remember after £68k (or whatever it is now) you will need to register for VAT which is a hassle many people avoid! So the way i see it, you need to look at how you can get the most profit from under £68k turnover if you are that type of person.
  7. Digitalfever

    Digitalfever

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    Great read Craig, I always enjoy reading your threads like this.

    I already know what you have said but its still great to read them and hear your point of view.

    I can see alot of future threads having this thread attached for people to read and realise the truth about this market and how hard it is to make a living from it when you dont have a large capital to invest with.

    I think for a lot of people its not the making a living part they are interested in but just being in the gaming industry and being part of this market.
  8. crispydog

    crispydog

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    Good article but I think missing an important point-stock levels & cost- if you wanted to sell an average 15 titles a day 365 days a year you would probably need to list a few hundred titles with multiple stock of each requiring a not inconsiderable initial stock investment especially so if your mainly selling games.
  9. JustCraig

    JustCraig

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    Spot on. I did briefly touch on start up cost but your right, I missed quite a lot out to be honest. It's just intended as a bit of a realty check.
  10. crispydog

    crispydog

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    I think another common mistake with new release games is expecting them to hold their price long enough for you to realise your profit.Prices can plummet within days if a game doesnt prove as popular as the initial expectation leaving you with overpriced stock you end up selling at a loss.
    It can certainly be a costly lesson to learn.
  11. mickster505

    mickster505

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    The funny thing is, games loose their value, yet a year or two later when they are hard to get hold of, even the most random of game can suddenly be worth £30-40! Recently I sold a new and sealed copy of the first "Blazing Angel" game on the PS3 for £34.99 on Amazon - having purchased it for myself for a tenner off play and never getting round to playing it.

    I know that point has no real relevance to this thread but just something I find interesting.

    The thing I hate is the money is in preowned titles and some accessories (1 type in particular has recently risen HUGELY in resell price - shame as I had about 100 selling for double what I paid, could of got triple or more now!), yet to have any hope of making a living out of them you'd need to find a decent supply of profitable titles which without owning a market stall or shop is rather difficult...
  12. smithy10292

    smithy10292

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    very very well done i really enjoyed reading that that actually puts things into prospective to be honest thanks
  13. PGC Trading

    PGC Trading

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    Excellent read Craig... your journalism skills are getting better;)
  14. cpc

    cpc

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    Great post for all the new starters out there. Inventory and cost are very important when playing the ebay game.

    Oh by the way JustCraig, now I no why you made M.O.T.M. Great post. 14 years ago this post would have help me A lot. Keep up the good work.
  15. Richard001

    Richard001

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    excellent post. Regarding the vat side of things, there is ways out of it if your trading on the likes of ebay but thats for you to work out.

    I would say selling games is somthing i have done in a small way for the past year or 2 but im only doing it for somthing to do on ebay. I run a business that has nothing to do with games etc but from the business side of things i have learnt a lot over the years.
    Im looking to start a shop in the northeast soon and use my other business to help fund it rather than go to business link etc.

    keep up the good work all you guys n gals.
  16. top174

    top174

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    Great post!
  17. Vince Green

    Vince Green

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    Its almost a chicken and egg situation because any (say) DVD you can buy for £1.50 is not going to sell on ebay for £4.99 because loads of idiots will also have bought the same DVds from the same supplier but will by trying to undercut each other and knock it out for little more than they paid for it.
    Also, in the case of DVDs you will be competing against the very supplier you bought the DVds off in the first place who is also selling them on ebay under a different company name.
    The same applies to games and music CDs You will find them being sold on ebay for less than you can buy them for. Often by the supplier
  18. JustCraig

    JustCraig

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    You are indeed right that a number of suppliers sell on eBay themselves but not everything they sell on eBay is cheaper than wholesale price and being the cheapest does not guarantee you sales.

    eBay is becoming more and more saturated making it difficult to compete. eBay should only ever be one trading platform, not your entire business.
  19. woodleyB

    woodleyB

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    Agreed. I made the mistake of only using eBay when I first started, but soon found other areas to do business. Though I dont deal with 'console games', the statement you made still applies. :thumbup:
  20. Stu_Games

    Stu_Games

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    This has helped me a lot, i'm new to this forum and am still researching the idea of starting an Ebay business, Thanks Craig.
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