How to Earn Money Through Online Auction

Online Auction

It's not hard to learn how to earn money through online auctions. If you just take a few areas into consideration, you can be a seller in no time.

Where Should You Sell?

The biggest auction site is, with Yahoo! Auctions gaining popularity. provides another option, while uBid only allows sales from registered businesses.

Before listing your auctions, read the rules and regulations carefully to be an informed seller. You should also pay close attention to each site's fees since they can vary widely and may cut in to your profits.

What Should You Sell?

In order to earn money through online auctions, you must first have products to sell.

Used Products

Most online auction sellers begin by selling items they have sitting around the house, the things you might otherwise sell at a yard sale. Once they've gotten a taste of auction selling, they move on to other sources. Some sellers rely on thrift shops, second-hand stores and rummage sales. With a good eye, they find 25-cent books they can sell for five dollars and dollar pottery potentially worth 20 dollars in an auction. When searching for second-hand merchandise, it helps to be knowledgeable of the market for these goods, so specializing can be to your advantage. At the same time, even the most specialized seller will have a hard time passing up a promising find.

New Products

Sellers who provide new items in their auctions also have several sources. Some buy their products wholesale, just like a store, although in many cases, the initial cash outlay is prohibitive to small auction sellers. Many sellers are simply frugal shoppers and find the best deals and clearance specials, holding on to seasonal merchandise until the time is right for profit. Others may even buy hot items at full price hoping to cash in on a potential shortage. If you remember the crazed hunt for Cabbage Patch Kids in the 80s or Tickle Me Elmo in the 90s, you can understand the potential value of a much-desired toy during the holiday season.

Drop Shipping

There is also a practice known as drop-shipping, where you contract with a company to ship items to your buyers without ever having the products in your hands. While you can find information online purporting to tell you how to make thousands of dollars through drop-shipping, the process is rarely that smooth. Since the products were never in your hands, you have no control over quality and shipping. Since good feedback scores from customers are vital to your success as an auction seller, it's dangerous to put your money-earning potential in the hands of an unknown shipping company. If you do find a promising drop-shipping firm, research them carefully, and ask for references.

Setting Up An Online Auction

Once you have found your products, setting up auctions that will attract customers is the next step in earning money through auctions. Some sellers create fancy templates to showcase their wares, but often a simple design with a few high-quality images is enough to convince a buyer. Take the time to create a good description for each auction. If you're selling similar items or hope to sell multiples of the same product, save your descriptions so you're not starting from scratch each time.

All sellers have preferences for auction starting prices, number of days they let auctions run and other details, even down to the time of day they prefer to let auctions end. Look at similar auctions for ideas, and decide if you want to emulate them or strike out on your own. You can learn much from experimenting with auctions until you find your own ideal listing conditions.

Customer Service

Good customer service is vital to earning money through online auctions. Answer emails promptly and follow through on the conditions of your auction to the letter, including shipping all sales promptly. You may be able to make some money at first if you're short with potential buyers, don't answer questions and take days to ship packages, but you won't enjoy long-term success as a seller.

Legal Matters

If you're running your online auction sales as a business, they should be treated as such. All profits must be declared as income on your taxes, so keep careful sales records. Check with your local government to find out whether you need a business license or other official paperwork to run auction sales out of your home. Keep all your receipts; with a business, many expenses will be deductible at tax time.

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How to Earn Money Through Online Auction