I normally am asked this question by my readers whether they should go for small items or large sized item.
This is a great question.
Because, size matters.
Well, before I dig deeper in to the size discussion, let me make it clear that this question should come from those people who like to build a niche model eBay business. For those general and all under one roof kind of business, you should not have a problem. The obvious reason is that in the general type of business, you sell anything that comes across. You may sell items as small as cards, stamps, protective screens etc. or medium sized such as shoes, boxed watches, and large item such as lawn mowers, vacuum cleaners, laptops, monitors and oversized items such as sofas, carpets, beds, sheds, and doors and so on. In other words, in the general business model, size here does not matter!
Classification of Items on the Basis of Size
There are no strict standards to classify items into various sizes. However, for the purpose of this post, I have divided them in to four groups on the basis of their size.
These include all those items, which can generally be posted through the door. These include items like:
- Jewelry unboxed
- Watches unboxed
These are larger than small items but smaller than large items. These include items like:
- Jewelry boxed
- Watches boxed
- Laptop Batteries
- Large Books
- Mobile Phones
- Home Phones
These are items, which are larger than medium sized but smaller than oversized or bulky items. These include
- Desktop computer
- Vacuum Cleaner
- Lawn Mowers
- Small Bikes
Oversize or Bulky Items
These include items larger than the large size. Examples are
- Tread Mills
- Large Bikes
Ok, this is just a rough idea of the different sizes. The lists above are not exhaustive. I have listed only the most popular in each category just to make the point. Some items can be overlapping because of the different sizes in the same category. However, I hope that, by now, you have a clear idea of the sizes that can be sold on eBay.
Before you go for a particular group of products, you should take the following factors in to consideration.
Inbound shipping means when you purchase goods and the supplier ships it to your address. Inbound shipping is, in most cases, paid by the purchaser so it adds to the overall cost of the item. Small items cost less shipping charges than larger, medium or bulky items. This is especially important if you are importing it from China or any other country in the Far East.
You me be able to get small items shipped via courier without incurring a huge cost. The reason is simple and obvious. They are small and need less space. They may also be lighter in weight. On the hand, large size items need more space and are heavy. You may have to get shipped large items in pallets and oversize items in full container loads. This adds to the overall purchasing cost. Additionally, it is extremely expensive to ship them through courier or airfreight. The only cost effective option is shipping through sea which takes as many as 30 or even more days to arrive.
However, if you source items within your own country and collect them yourself or the supplier arranges free delivery, the inbound shipping may not pose any significant problem.
Once the goods arrive, you need to store them somewhere. Now significantly small items can easily be stored in a cupboard or shelves in a bedroom. For Medium size items, you may have to use your garage, shed or other external storage facility. When it comes to large and oversized items, you definitely need large storage space. You will either have to rent a warehouse, a storage facility or use fulfillment houses. In each of these cases, you will incur cost, which add to the overall cost of the item. Smaller items, on the other hand, may not incur such charges.
When you sell and item, you still have to incur charges such as packaging and outbound shipping. Smaller items here have again an advantage over larger and oversized items. They cost less packaging material and can be shipped cheaply vial UPS, USPS or Royal Mail (UK). You do not have to pay higher charges to courier companies. On other hand, in case of medium and large sized items, you may have to ship them using courier services, which obviously adds to the overall expense. The problem is even more obvious in case of bulky items in which case you have to either arrange a special courier service or arrange a self-delivery. In either case, it costs a lot of money.
This is yet another factor you should consider before going for a particular sized products. Smaller and medium sized items are easy to handle. You may not need additional staff or employees to handle these items. In case of large items, you may need additional support to handle products, whereas, in case of oversized items, it is must to have some additional staff or wage workers to handle goods. Therefore, handling charge is another cost added to goods depending upon its size.
In addition, you may have to sell, pack and post a number of smaller items to earn any real profit. In case, of large and bulky items, you may achieve similar results just be selling a few items per day.
Smaller items are generally cheaper than larger items. For instance, a box of cards or cheap jewelry items will cost, may be, something around $100 to $200 or a similar range. On other hand, larger items especially the oversize group, are much more expensive. So, if you have little budget to spend, you may go for smaller items. However, not all small items are cheap. There are some categories such as gold, gems, antiques and the like which may be even more expensive than the bulky items. Nonetheless, smaller items cost less and you can buy more quantity than is the case with larger items.
You run your eBay business for profit, right? Yes, so you obviously need products to earn you money. It has not been exactly proven that smaller items are more competitive than larger ones. Nevertheless, there seem to be a lot more competition in the small item niche than than larger items. In addition, profit margins are quite thin in cases of smaller items as compared to larger item. If the overall cost of a small item, after adding all expenses, is $3 and you sell it for $5 your net profit is $2. That is 40% profit. On other other hand if you sell a large item for $500 and your earn the same 40% here, your net profit is $200. Therefore, to make $200 on small items you will have to sell 100 items as against a single large item.
Let me remind you that the above profit margin is just an example and not based on any real transaction. This is to simply give you a general idea.
I have a real example of a close friend who is in the furniture niche on eBay UK. They sold a good number of items with a very good volume. Now these large items are expensive and your turn out goes up after selling even a few numbers. They did not take the VAT in to account while pricing the items for their eBay listings. After two months, they were above the VAT threshold and in the first quarter, they had to pay a significant amount of VAT (20 % of total sale). This reduced their profit significantly leaving them with only a few hundred pounds for the whole quarter. Had they not realized, they could have even incurred losses after such a hard work.
On other hand, small items do not cost a lot. Their sale value is low and you will need to sell a considerable number of items to cross the VAT threshold. Still, you must keep it in mind that if you reach the VAT threshold, you should re-calculate your pricing.
After considering all these factors, you should be in a position to decide which size items you should be selling. If you do not have enough financial budget and are unable to rent additional space or handle large items, then you should definitely take the small item route. You can start small item eBay business with a few hundred dollars from your own house. However, if you have enough budget to start with a high investment, you may look into different sizes. Profit margin should also be taken in to account if you are selling on eBay for profit.