Is It Easier Or Harder To Start An eBay/Amazon Business in 2024?

Guest Post by Kevin Harmon.  Kevin has a PhD in eBay, Amazon, Walmart, and ecommerce.  He is the Founder or VP of four different companies in the Top 20 on eBay/Amazon worldwide.  He has sold over a million items online for millions of dollars in the past 20 years.  He has Enterprise level experience and skills in several areas such as management, entrepreneurship, digital marketing, and sales. He is also creator and host of the Travels With Randy Podcast.  He writes for several different publications, has appeared on national TV, been written about in books, magazines, and newspapers, and has willingly jumped out of an airplane.  

 

Hi Gang,

So, I started my first eBay business in the winter of 2002.  My wife wanted a Coach purse for Christmas and I didn’t want to pay retail for one, so I logged in to eBay for the very first time to look around and find one.   I enjoyed the experience – it was fun! – and quickly began wondering if I could sell things around the house on eBay too.  So, I sold some books and some clothing to get used to how everything worked.  It all sold quickly without issues, so I then began thinking about buying product and reselling it as a part-time hobby.   I headed to flea markets and just randomly found different things to sell as a test.  Everything sold again, so I headed to MORE flea markets to find more products, which sold AGAIN, and by that point I had caught the eBay Fever and decided that maybe I could do this more than part time. I set aside $1,000 to buy product and I set up my spare bedroom upstairs (yep, UPSTAIRS – I never said I was smart) with a shipping station and a couple of shelves and hit the road visiting all the area flea markets.

Three years later, my company Inflatable Madness was in the Top 25 of all eBay sellers worldwide.  We had around 40 employees working out of my 32,000 sq ft warehouse and were selling around a million dollars a month of product.  

How I grew from my upstairs bedroom to a huge warehouse is probably a whole book that I will someday write.  It was the culmination of a thousand little decisions I made along the way on a daily basis that got me there of course, and recently I began wondering how different it would be in 2024 to start an ecommerce business from scratch. 

So, let’s compare several different considerations between starting a business now and starting a business back in the Old Days, many moons ago.  Is it easier now or harder or the same? Ready? Let’s go.

 

SAME

• Filing the paperwork to start your business.  I’m talking about registering a business name, applying for a tax id with the state, filing any company formation paperwork etc etc.  I’d say it is the same to slightly better now.  Not much difference between the process way back when and today except it’s possibly a little easier now that the internet has advanced 20 years.

 

HARDER

• Creating eBay and Amazon seller accounts.   Compared to the wild west old days, both companies are now REALLY interested in who you are, where your company is, and what you’re going to sell.  You will probably also need to prove it by sending them documents that prove your business is yours, the address, the tax number, etc. and you’ll also need to prove that you are, in fact, you.  You may also have to send them purchase orders from your suppliers (and yes, they WILL contact them to verify). This process is much longer than before and is an effort by both websites to get a handle on who is selling there and trying to deter bad sellers and products.  Last year, Amazon launched an entirely new verification process that required MANY different forms of proof, right down to proving your business address by mailing a postcard with a code on it that you had to enter on the site to prove it.  Amazon Verification was TERRIFYING to all sellers, even to all of us legitimate ones, because they have an earned reputation for wiping out seller accounts for any reason whatsoever. 

 

HARDER

•  Raising money / securing funding to operate your business.  You can blame the 2008 housing crisis for this one.  I have some CRAZY stories about Lines of Credit from banks before the crisis hit.  Money was cheap and plentiful.  They were throwing money around like it was water for years before 2008, and we BARELY had to qualify for it.  My main bank, after being in business for one year, just called one day and said they were going to open a $200,000 line of credit for me.  Naturally, I said “thank you!”. A year later they threw in another $300,000 just in case I needed it.  They gave us so much rope to hang ourselves with, and many of us did just that when 2008 hit and all the banks began tightening their belts.  Of course, current interest rates are at very high levels compared to then as well.  So, traditional capital is more expensive and harder to raise even with good credit now.

 

HARDER

•   Complexity of the eBay and Amazon platforms.  Much harder.  You will need a thorough understanding of both platforms before you decide to ramp up listings on either one.  Compared to the Old Days, there are a LOT of complicating factors on both sites now.  eBay’s search algorithm factors in your seller level, days your listing is active, how relevant your title is vs. search terms, on and on.  Oh, and they change that formula, it seems, every week these days.  Amazon, by contrast, measures sellers on at least 15 different metrics and will increase or reduce the visibility of your listings depending on your seller account’s Health.  Both sites have added the complications of paid promotional marketing and advertising.  On Amazon, the seller tool you use will depend on if you are reselling an item, the brand owner, a Vendor, or even a service provider.  It’s COMPLEX, dude.  Normally, I’d tell you to just start listing items to get used to the nuances of each – but you must be REALLY careful now.  Both sites are very unforgiving to mistakes made on their platform and they can both kill your account before you even get to first gear.  So research, study, watch videos, get tutored,  or hire experts to get you started.

 

HARDER

•  Finding product to sell.  I’ll be honest – you have more competitors and online sellers than ever before now.  There are millions of sellers on either platform.  The sophistication of the internet and internet-related applications, combined with the birth and rise of A.I. means that product is both easier to find AND harder to resell.  In the past, there were opportunities everywhere to find a product at Walmart that you could resell on eBay and make a profit, for example.  Web software is much smarter now – Amazon is actively monitoring Walmart pricing and will adjust prices accordingly and vice versa.  It’s also much easier for international sellers, especially from China, to resell goods into the US eBay and Amazon sites, and man oh man are they.  For some baffling reason, Chinese sellers seem to enjoy a massive reduction in shipping costs to the USA as well.  A Chinese seller can magically ship an item to Chicago from Shenzhen less expensively than I can ship to Chicago from North Carolina.  It’s unfair and crazy, but welcome to ecommerce. Of course, all these rules change if you are starting your own brand that no one else has (yet).  There is a different set of challenges you’ll face there but let’s leave that for another time.

 

EASIER 

• Seller Software.   As a seller, you will need software (the kids these days call them Apps! Get off my lawn!) to keep a catalog of your inventory, keep a location of where the items physically are, list your items for sale on the various marketplaces, ship orders that come in, handle customer service, and handle financial data.  This software can be fairly simple – you can actually pick and choose which of the parts of your business you want to use software for (like a Shipping solution for example) and it can also be highly complex, end-to-end full service software used by the larger sellers.  In general, I would say that the cost of software has risen substantially, but the usefulness of it has increased dramatically as well.

 

CONCLUSION

So, these and many other considerations all factor in starting an ecommerce business in 2024  -many more than can be explained in a blog post for sure.  I’ll bet you noticed that almost all my conclusions are HARDER lol. Don’t let that stop you from realizing a dream of ownership.  Look, if it were easy, everyone would do it.  There would be nobody left to wash your Tesla or hand you a cheeseburger through a window. 

Go get ‘em!

-Kevin

You can follow Kevin on Facebook, Linkedin, and Twitter.

 

What about you?  For those of you that have been selling for a while, what you do you think has gotten harder or easier.