Who is Making Money Selling Online?
As we discussed, it's difficult to quantify just how many sellers are making a living through e-commerce sites, and just how much money they're making. One of eBay's most successful sellers is Jack Sheng, who made headlines in 2008 when he became the first seller to earn 1 million positive ratings from buyers. (EBay encourages buyers to provide feedback on their experiences with sellers after each transaction.) According to eBay's official blog, Sheng's electronics sales company, eForcity, brings in $40 million in revenue per year through sales on eBay, Amazon.com and its own online storefront [source: Brewer-Hay]. But it's important to keep in mind that it took Sheng eight years to build his business from a three-man operation in a garage to a national company with 200 employees. It didn't happen overnight.
According to the most recent U.S. Census data, in 2007 there were 106,065 retailers selling exclusively through electronic and mail-order sales. Of those, more than 84,000 were single-person operations. The average annual sales for those one-person shops were $38,330 [source: U.S. Census Bureau]. The Internet is full of small Web sites selling homemade crafts, or niche products, as well as stores for local boutiques and shops that have opened a Web portal to supplement income from their stores. In 2007, 32 percent of small retailers were selling their merchandise through an online portal [source: Tedeschi]. So, there's room for smaller retailers to make money online.
Selling through one of the larger sites has its pros and cons. eBay offers discounts on fees and more customer service access to power sellers who make at least $3,000 per year in annual sales. Those perks can be helpful, but some smaller sellers have criticized the discounts as unfair [source: Rushe]. Listing on Amazon can bring in a lot of sales. According to recent earnings statements, 32 percent of the site's total unit sales are from third-party sellers [source: Seeking Alpha]. But listings from sellers often compete with lower prices from Amazon itself. Etsy is a good site for selling handcrafts, but won't let you sell retail items. The more sites you list items on, the more sales you can potentially make, so consider setting up accounts eBay and Amazon, dabbling in smaller portals, and starting your own Web site with an online shopping cart.
Read on to find out how to get started building your online business.