How much money does it take to run an eBay business?
Have you ever wondered how much the average eBay PowerSeller invest into their successful eBay business? Have you ever thought about how much you would need to make sure your eBay business continues to grow? The answers of course will vary depending on what your goal is for your business the profit margin of the items you sell and the fixed cost of your business. However, let’s do a hypothetical scenario just to give you an idea of what you may need. Say you invest $1000 into inventory for your business and another $200 for some fixed costs like shipping supplies, paper, internet connection etc. Now after all the fees and shipping costs you net $2000 from selling all your inventory for the month (which would be quite good in reality). Seems you have almost doubled your money right? Not really, because to keep your business going you would need to invest another $1000 in inventory for the next month plus another $200 for expenses leaving you with just $800 profit for yourself. Now if this were your only source of income you would no doubt need that $800 to pay for personal expenses like rent and groceries. Now I know that this example seems awfully simple but the point is this, your eBay business can’t grow unless you keep reinvesting in it! The more funding that you start with the quicker you can reach your goals.
What are the best sources to fund an eBay business?
Many people who start experimenting with buying and selling on eBay will charge all the items they plan on selling to their credit card. Why? because it’s the easiest credit source to use. Most everyone has at least one credit card to their name and it feels very safe to purchase inventory for your eBay business knowing you can just pay that minimum payment each month. In reality though this is probably one of the worst ways fund your business. Here are some the best ways:
- Use your savings account. Sure it sounds risky to take money from your savings and put towards a business and in way it is but it isn’t any more risk than using a credit card. Using your savings will give you the added benefit of not having any interest charges and having more time to make the business a success without worrying about payment deadlines, late charges and the like.
- Use a home equity line of credit. The second best way is to use a home equity line of credit. Since your house is used as collateral the interest will be much lower than you could likely receive else where. Like a credit card funds can be drawn from the line of credit at any time the borrower sees fit. The interest is added to the borrower’s mortgage payment. Depending on the lender after between 5-25 years the entire principal amount will become due. The payment may also be paid off before it becomes due without penalty.
- A business loan from a bank. A business loan from a local bank or credit union could also be used. The main drawback here would be that most banks don’t want to deal with start up companies without any real track record. Many banks also require a detailed business plan which can be quite a challenge for a one man home based business.
These are all great options but you may be asking “What if I have no savings, no home equity and don’t qualify for bank loan? What can I do now?”. That’s a very good question, and fortunately there is an answer. There is a new option for raising funds for your eBay or eCommerce business.
A New Way To Fund eBay Business
Seeing the need for new and innovative ways of funding eBay and eCommerce businesses, kabbage.com has stepped up to fill the void. Instead of relying solely on credit scores and past income data they also incorporate your proven track record on sites like eBay, Amazon or your own web-store. Unlike traditional loans it only takes 7 minutes to find out if your approved and for how much. It’s easy to apply and risk free, applying doesn’t obligate you to take out a loan. Some other benefits to using kabbage.com:
- Buy the inventory you need to profit. The number one use of funding for eCommerce is to buy more inventory. Now you won’t have pass over great deals because you don’t have any cash on hand. Simply get the funding you need and pay it back from your profits.
- Access funds immediately 24 hours a day. With Kabbage you never have to wait for your funds, once approved you can have funds instantly transferred to you PayPal account for whatever you need. Or get funds transferred to your bank in just 3-5 days.
- No hidden charges. There are no hidden charges or fees for transferring, you only pay interest on the money you have taken out and only during the time it is outstanding.
How Small Businesses Are Using Kabbage To Fund Growth (InfoGraphic)
Online retailers and small businesses are taking advantage of Kabbage.com to fund new opportunities and growth. This InfoGraphic shows some of the interesting things sellers are using their funds on:
What Customers Are Saying About Kabbage.com
“With Kabbage we were are able to have money sent to us in less than a minute. We got the inventory and were able to sell it quickly. Total time from Kabbage advance to selling the inventory and profit was four days!” – Nabeel Shaukat
“What I like about Kabbage is that it’s so fast. I was able to go into my Kabbage account and they transferred the funds instantly.” – Cynthia Jensen
“Kabbage is the most efficient, easiest and secure way to grow any e-commerce business. Thanks to them, I am able to grow my business without going through so many loops.” – Francisco Tovar
“Kabbage has given us the much needed cash flow in order to increase our product offerings.
We could not have had the success we are experiencing today if it weren’t for Kabbage!” – Jack Martin