How Full-Time eBay Sellers Fund Their Next Growth Phase

Going full-time on eBay is one thing but scaling and being able to keep one’s focus on the venture is another. Most eBay sellers experience a much sooner-than-expected growth ceiling once they realize the profits that they are making are tied up in inventory, that the fees the platform takes cuts into their income much more than anticipated and that the “next big thing” they want to sell usually requires funds they have not set aside yet.

Growth is more of a necessity than a desire. Once an eBay seller has a supplier that offers excellent deals for bulk purchase, once the eBay seller has reached a point where their old product line no longer sells as well as it used to or once they figure that in order to avoid those out-of-stock listings that are fatal to seller reputations, they should start putting away money.

Banks Aren’t Interested and Alternative Lending Doesn’t Make Sense

Bank funding does not work out for most eBay sellers, however. Banks want documentation on taxes paid and income earned. eBay sellers can have great sales figures but the “business” does not translate well to bank documentation. Sure, the income is there, as proven by the bank and eBay’s systems, but try explaining that to a loan officer while awkwardly sitting across from him/her trying to describe your business.

In addition, most situations for scaling to take advantage of a hot product offering do not fit in with the way banks process applications. This sale opportunity will only be available for another two weeks. This trend has only another week’s worth of customer engagement on TikTok.

What Works and Why It Matters

The eBay sellers who do scale find that the options available for funding for eBay sellers work out much better than anything a traditional bank can offer. Funding options consider sales figures, metrics for transactions, seller ratings and even the age of the business instead of ratios of debt to equity. The loans take the business’s income-earning structure into account rather than a bank’s expectations.

This makes sense because it recognizes that an eBay seller generating $15,000 a month in sales has a real business model albeit one operated from their bedroom. The metrics available on these selling platforms are mind-bogglingly accurate and more significant than any other proof the business owner has offered over the course of their existence. No need to pull out deeds to properties or a shop lease agreement.

The Problem With Inventory

All full-time eBay sellers know that having money that just sits in a bank account helps no one, but money waiting to be turned into cash sitting in an inventory store can quickly become cash in hand, especially if the seller secures the right supplier contact and the right product. Being cash-strapped after utilizing all available funds to buy stock is always risky for an eBay seller. Hold-out times on different products can vary as well as the availability of cash for unforeseen circumstances.

What if the seller needs to wait for one or two transactions before eBay releases the funds after keeping it for a fee? What if a payment from a customer just happens to arrive on the same day an unexpected expense pops up? The payment owed to a new supplier contact after realizing that the photo gear they bought for too little only stretches so far, and successful eBay sellers have a financial buffer. This buffer also means that they could possibly not be using that money to purchase more inventory.

Venturing into New Territory

Growth often entails venturing into product categories or inventory of slightly better quality and value. It is not difficult to envision the scaling-up trajectory once an eBay seller has realized that they are doing quite well selling moderately priced small electronics, and that they could be doing even better if they invested in more expensive “big ticket” items. However, the calculations need to be made again.

Most sale figures make sense, but venturing into new territory, however lucrative, is expensive. Money set aside for product A cannot be spent on product B, no matter how appealing the projected profits may be. The operational side of scaling up presents challenges as well. At some point, it is impossible (and unsustainable) to do everything on one’s own.

Paying one part-time worker will cost money. Basic photo gear can only capture so many photos. Accessory kits for these products, bulk-packaged packaging materials, listing software designed for professional users, all of these come at a cost. It adds up.

Making It Work

eBay sellers who succeed in treating their hobby as a real business use the funding option as a resource rather than an option of last resort. Someone holding him or herself accountable has probably already formulated a strategy regarding when to use funding as a resource to get through rough periods in a business cycle or to take advantage of supplier surplus stock during certain seasons.

Using funding as a source of income makes sense only once someone acknowledges that spending money can lead to growth and income while treated carelessly, funding can lead to negative income over time. Businesses that are already established can usually repay their loans within months of using the loan to buy inventory and operational necessities.

In positive cases, the difference between an eBay seller who is stuck at $10,000 a month in sales and someone selling for $25,000 a month is usually that someone made the right moves at the right time when they needed funding to keep it afloat.

Strategizing

It is not about getting rich but building something that provides income relatively easily without a lot of effort getting tossed into keeping it operational.

Being strategic also means asking boring questions regarding the destiny of one’s business instead of sticking to exciting things that could happen next season regarding what product might go viral and lead to record sales.

Full-time eBay selling can indeed offer people excellent income opportunities and build wealth over time but serious questions regarding capital need to be answered once a venture can keep itself afloat using its own income streams. The sellers who make it look effortless usually had access to limited funds, but they also figured out how best to secure funding for what lies ahead instead of funding mistakes made in the past.

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