Applying eBay Profit Models to Personal Finance

January 30, 2007

Why do we shop on eBay? Oftentimes it’s because the price is right. A common business model on eBay is to sell a large amount of products at a low price. This low margin, high volume business model can also be applied to our personal finances.

The Pennies Add Up
Think about how many financial transactions you’ll take part in over the course of the next week, month, or year. If you can save a little money on each of those transactions the cost savings will add up over time.

High Margins, Low Volume
Walter Updegrave argued in a recent article in Money Magazine that reducing spending on big ticket items was a more efficient way to save than cutting out the little expenses. I’m a lazy person; I like to do the least amount of work for the largest amount of gain. That being said, I tend to agree with Flexo and Jim that focusing on the biggest savings will get you the biggest bang for the buck. My sales approach on eBay reflects this; I typically sell fewer items for higher margins. From a personal finance point of view, I like to put more effort into reducing my biggest costs, than I do saving a little on all items.

Low Margins, High Volume
However, a simple eBay search will turn up many people that opt for the low margin, high volume approach that are making decent money. I think you’ll find the same with personal finances. Clipping coupons, scouring for deals, and pinching pennies can save you significant amounts of money over time. Different approaches work better for different people and the financial circumstances they find themselves in.

Never Enough Time
I guess the main question in our busy lives is how much time you have. I find it hard enough to arrange my family, friends, job, and sufficient sleep all into my schedule. If you have enough room in your schedule to focus on cutting the big costs, all the little costs, and still have time for “living” then you may have found the best of both worlds.


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Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

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One Response to Applying eBay Profit Models to Personal Finance

  • online auctions

    Everyone wants to use eBay, regardless whether you are a buyer or a seller. If benefits both sides; those that want to make a buck and those that are in a need of a particular commodity. More and more people are turning to internet and online shopping.