There is a definite risk of stock overload on eBay because the site is constructed with an idea of the garage sale. With the introduction of the “store concept” it is easy for the garage sale to creep into the stores, and that is a danger that you should be wary of as a store owner.

I sell plates and mugs and cookware in my little store The Northern Home Shop , so I don’t know the first thing about Elvisiana. Neither do I know one iota about traditional craftwork of Native Americans in the outback of Nevada. If I were to start to trade in Elvisiana or Hopi craftwork the chances are that I would quickly be:

• Buying junk.
  

• Listing junk.

• Loosing money on the junk.

• Getting frustrated about why no one is buying the junk.

• Leaving eBay

I would be in no position to judge my stock, and I would be in no position to correctly gauge the value of what I auction, and the consequence of that is that I would be failing as an eBay store owner. I would be paying for nothing, in other words.

As I look around eBay – and this may be a wrong impression, I admit – I think I see that many are buying lots and lots of items for sale, and that these people have no fundamental principle for their operation here.

They seem to be hoping that with a large enough stock some thing will sell, and they can make a little money on the stray sales. But that is no way to run a business, and I will tell you why.

Know your wares
When I opened my shop I resisted the urge to get a huge stock, and concentrated on what I know and care about: beautiful plates, mugs, cookware, and home decoration items. Those are items I can speak for and about, while I wouldn’t know what to say if I were to try and sell commemorative Graceland pins.

Now, you may be lucky and get a valuable item that you will recognize as a valuable item. You may correctly list that item, and sell it. But in the meantime you have ten other items that you know nothing about, that you have no idea about how much they are worth, and that you peddle out in auction hoping to generate bidders that will push up the price from $0.99 to some semblance of a correct value.

But if you have a hundred diverse items in your shop, chances are you’ll be unlucky with a good number of them. And relying on luck is no way to run a shop.

What can be done to avoid that? The only thing to do to get around that is to know your wares. And from that basic principle you will force yourself to run an effective and profitable shop.

The effective shop
There are a number of things that differentiate an effective shop in real life:

• It has the stock it needs, and no more.
• It turns around that stock for money.
• It has a principle of knowledge about the stock at its core.
• It has employees that like what they are selling.
• It has a loyal client base that return again and again because the clients know that the people in this shop knows what they are talking about.

This may all seem fundamental. A shoe store doesn’t sell plumbing tools. A jeweller doesn’t sell hair cuts. A book store doesn’t have a counter filled with insurance services.

If you look around eBay you will see that here the rare book dealers peddle used computers with a side business of ladies underwear. You will see clothes shops selling Pokemon cards and furniture. In fact, often the stock is so dizzyingly diverse that it is hard to see what the seller’s core items are.

Specialisation
I anyone was to ask me what a store owner should do, it is this then: specialise. Find the things you already like, concentrate on them, and sell only those items.

You make loose out on an auction where you can earn $1.5, but in the longer term you will win $150 by selling an item that you can speak for.

You will also find a benefit in specialisation in that your competition will be reduced significantly. If you are the jack of all trades but the master of none you will compete with millions of other eBay users. If you build up your knowledge about a particular type of item you will compete with perhaps a few hundred other people that have specialised in the items you now sell.

If you are really lucky you will only have a handful of other traders to compete with, and if you ask me it is a greater chance to win a bid against ten traders than ten million.