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Ebay and E-Books - Profit Partners

I have a friend who makes a very decent living off Ebay selling E-Books, I have recently been picking his brains as to how he makes such a success and generates the income he does selling E-Books that range in final value from £15 to £5. He swears that there are only three golden rules to the Ebay E-Book business model and these are:

1. Unique and original content that offers true value.

What this means is not the typical 1p rubbish that is banded around by everyone on Ebay. Now I am not going to reveal the niche sectors/topics that he works in but what I will say is that he constantly researches different topics and subjects and utilises both public domain resources (ie. free from copyright) and if he doesn't find what he is looking for there then he outsource's the project to professional writers who then pull the product together for him and he gets the copyright which allows him to do what he wants with the product as it is his.

2. ALWAYS utilise the Auction Format.

Different bidders perceive different values associated with a product and as such some are willing to pay more than others, this naturally pushes up the final selling price and maximises the return that you will get. The auction format is also the key to rule three which is where he makes his money..

3. ALWAYS utilise the second chance offer.

With the advent of sniping and last minute bidding the chances of losing the auction are very high, as humans we find this frustrating as we do not like to lose especially if it is something that we perceive as a must have product. This is where the profit maximisation can take place, in this ‘losers' state bidders are open to a second chance offer that allows them to get the product they want and it also breeds the mentality that they have actually won as they are actually paying less than the sniper who they perceive as paying over the odds.

Let me use an example of how utilising the second chance offer maximises profit and return:

Note: For ease of illustration I have not included Ebay fees in the equation.

You are selling a recipe e-book (they are very popular on Ebay) and the final selling price that it achieves is £5, you then have the following choices:

Relist the e-book and then wait for the next max price bidder to buy your e-book at £5, using this you always get top dollar for your product but you limit your profit to £5 a day (from this one line) because the minimum listing time is 1 day on Ebay. That's a grand profit of £1,825 per year (before fees and costs). Now when you look at it like that it doesn't seem to bad especially if you have 10 or more different e-book auctions on the go every day.

However, watch what utilising the second chance offer can do…

Your e-book has sold for £5 and has had 5 bids on it, for arguments sake say £1, £2, £3, £4 and £5 (the winning bid). Now forget about the perceived value that you have placed on the e-book that would make you relist like above and hold out for the top end bids. Offer every single one of your bidders the e-book using the second chance offer, if all take up the offer (and why should they not?) then the total profit before fees and costs that you will generate is:

£1+£2+£3+£4+£5 = £15 which takes your yearly profit (at one auction sale a day) to £5,475 which is a cash increase of £3,650. If you operate 10 auctions a day then that equates to £54,750 in sales per year!! Which is not bad from a £5 final selling price item I am sure you will agree, even at 50% reply rate then this is £27,375 a year.

The key to this ebay business model is the quality of the e-book in question, recipe books do not go for big money however there are niche areas available where e-books regularly sell for £10, £20 even £30. Look what this increased final selling price does for the profit potential:

£10 Final Value = £55 per auction which is £20,075 a year.

£20 Final Value = £210 per auction which is £76,650 a year.

£30 Final Value = £465 per auction which is £169,725 a year.

Anyone can get a great e-book written, sure it will cost you in the short term but these costs can be pulled back very quickly. Make sure that you have several offerings that ensure you are always daily selling and make sure you keep researching new sectors and getting products produced to keep the process going.

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