Smart Reasons to Save, Use and Invest Money

Using Ebay to Teach Kids About Business

Today I would like to share with you a story about my son, and how I’m using ebay to enhance his desire to make money.

My Entrepreneurial Son

James (randomly chosen name) started selling lemonade from a lemonade stand for 25 cents when he was almost six years old.  I thought he wouldn’t last, and while he only did lasted an hour, it was thirty minutes more than I thought he would do.

On that particular day, he made $3.46.  Since he was selling to young kids, there is always a kid or two that doesn’t have enough money, so he sometimes sells to them for less money, and that is why the money sometimes comes back with unusual amounts…

The following year, he sold lemonade too, but what caught my attention was when he decided to try to sell lemonade in late September.  It was way to cold for a lemonade stand, but he wanted to try anyway.

At first, I was going to explain to him the principles of supply and demand, but then I decided it was better than he experienced “no sales” first hand.  “Trying and failing” is sometimes a great opportunity for a life lesson!

So he went out to try to sell lemonade on a damp, chilly day.

After thirty minutes, I went out to check on him (at this point he was seven years old).  And lo and behold, the lemonade stand was unoccupied.  Then, I saw him riding his bike a few housed down yelling “Lemonade, get your lemonade here, refreshing lemonade“.  I started to call out to him, intending to making him stop yelling, but then I let him go.  I shook my head as I walked back into the house, slightly impressed with his clever advertising idea.  I thought, not too shabby for a young seven-year old…

So another 50 minutes passes, he gives up and comes in, and I’m all ready to explain why my “supply and demand” lesson to him on “why he didn’t sell any lemonade“… but he had!  Apparently, some of his neighborhood friends heard him yelling and bought some lemonade.  And while his total sales only came to $1.75, it was $1.75 more than I thought he would sell!  This is the time I decided to teach him about business, using eBay as a learning tool.

You might be thinking “Why eBay“?  Here are the  reasons:

  • It’s a fairly simple business, that you can do mostly from your home.
  • It has all the important elements of a business, such as:
    • a product to prepare and sell, and possible a vendor
    • an advertising element (the write-up for the auction).
    • consideration of business operating expenses for:
      • eBay listing fee
      • eBay final sale fee
      • buy it now fee
      • Paypal fees (if you use Paypal)
      • transportation (gas) expense
      • packaging costs
      • Postage expense
      • Shipping Insurance expense
      • Time and rate of pay calculation
      • Taxes!
    • customer relations
    • invoicing
    • collections
    • and so on…

So, while eBay is just a simple auction, it’s still a great place to start to learn about business!  All of the bullet points above are excellent business functions to learn!  The cost for the point of entry into this business is ridiculously low too!

Our Adventure as Sellers

Since my kids (I also have a daughter) were born, I’ve always tried to give them financial advantages.  During my period of reading any financial book that I could get my hand on in the library, I read about a  board game called “Cash Flow for Kids“.  Intrigued, I started to try to find it online.

All of the sites that I came across online listed the product for $40.00 or more!  Then I got lucky!!!  I found a site that sells the product for $26.00, and if your orders total over $50.00, shipping is free!  In addition, after you buy so much, you get a 40% discount on the next shipment!

I wanted the game, but I knew I had the eBay opportunity that I was looking for!  Not only would I buy the game to teach my son about business and investments, I would also teach him by selling this production on eBay for profit.  Surprisingly, on eBay, it was going for a higher price than what the online stores were listing it for…  Although, some were out of stock of the products too.

This was great because after my son and I look the pictures (this was his contribution, with help from me of course), and developed the sales pitch (this was all me, but I reviewed it with him) our entire advertising and eBay listing phase was completed.  All we needed to do was use the previous auction as for the basis for a current one!

Next, I created an auction watcher shortcut, and my son and I would check daily to see if our product sold or not.  We only sold two at a time per week  because we didn’t want to flood the market and drive the prices down.  After all, it was a narrow niche!

A big bonus came in October and November!  While the number of auctions for this product increased on eBay, demand still outstripped supply, so the price of the auctions went all the way up to the $90 and $95 dollar range!  My son and I were ecstatic!

So we did this for about a year and a half, until the supplier discontinued carrying the product.  I kept one of the games for the kids to play, and then discontinued the eBay business.

What is My Son Doing Today?

Well, he must have learned something about eBay and business because now he wants to sell some of his toys on eBay instead of in a garage sale.  He has learned that the market is larger and pays more than the smaller garage sale crowd!  So this October and November, I’m going to help him with his own eBay experience!

-MR

19 Responses to Using Ebay to Teach Kids About Business

  1. Nice how you started with Lemonade and linked it to eBay!

    Very clever on the board game! I’ve done similar hustles, but as you mention it is a pity these are all niche hustles to give us that instant thrill on making small profits!

    I’m sure your son learned a lot about supply and demand!

  2. Sounds like an amazing experience. I learned plenty from using ebay to sell books. I also learned that in business you get burned quite a bit when using Paypal. These are all valuable lessons to teach your kids, please keep on doing so.

    -Ravi Gupta

    • I think he has the Sales part down, and now I’m starting to explain to him the expenses part of the equation!

      Expenses is another business killer if you can’t get a grip around it!

  3. My son has been gathering up years worth of his stuff and planning to sell it on ebay–which I’ll help him with. This is a good primer for him, and I’m going to have him read this.

    Learning to do this may spark the entrepreneurial spirit in a kid, which is really important now since jobs are so hard to come by, even for the qualified. Dipping a finger into buying and selling could mushroom into bigger things later.

    • Thanks Kevin!

      Hearing that you are going to have your son read this article as a primer, is exactly why I write articles like this! Thanks, you made my day!!!

      Personally, I found the process pretty amazing when I was doing it! It’s a great way to cover all of the major points of a small business. Very positive experience (even when things go wrong…)

  4. That was great! I hope my son is more entrepreneurial too. Usually I try to sell on Craigslist because Ebay is a bit too much trouble, but it’s worth checking the price.

  5. Great stories. Your son is gonna be a heck of a business man one day. If other parents took your approach with their children, the country has a bright future ahead of us. We better spread the word!

    • That would be great if he were to become some great entrepreneur when he’s older, that would be great (same for my daughter too, once she’s old enough).

  6. Very nice article! Last year we did a project where the kids sold a bunch of their stuff on eBay and we put the money raised towards their Disney vacation. It was a wonderful learning experience for them – and me too. My eldest is now eager to start her own eBay business and we’re researching products now. I agree it’s a great place for them to learn business basics.

    • What an extremely clever idea!

      Using a super reward like that as the cause of entrepreneurial activities is truly wonderful!

      I know if I were still a child and had a trip to Disney as the reward for making money, that would motivate me to the utmost extent!

  7. This is a wonderful idea. I have never sold anything on eBay so would have to look into it myself but it sounds like a great idea to get rid of unwanted items in the house, much better than a garage sale.

  8. Yap!
    My kids once made money with eBay.

    They used my credit card for eBay expenses.

    They made money selling merchandise, alright.
    I lost money in fees, alright.

  9. good job – perfect platform in my opinion. few years back i got my young sister started on this. she cleared out half her room and the basement, and made a lot of money. more importantly, she learned that making money online is total reality today. loved it~!

  10. A very meaningful and rewarding experience for your son. It is really great to teach kids these life lessons at a very young age and it is also good to let them experience problems first hand so you can see what kind of actions they would be taking to resolve the problem.