About 10 years ago, I was working in a marketing agency. For the first time, I began to truly understand the power of the internet – it is global, universally used, and is a powerful tool that anyone can leverage to make money online!
For some time before that, I had an idea that I just couldn’t shake. I wanted to go into business for myself and start a musical instrument shop. There were physical-world options that I had explored: franchising and brick-and-mortar store fronts to be specific. However, I couldn’t afford either one of these routes, so I put that idea on the back burner.
Fast forward several years to when I built my first partscaster. As I waded through postings of necks, bodies, and pickups on sites like eBay, Amazon, and Reverb, I began to understand how I could realize my dream of opening up a music shop. I could do it virtually with very little start-up cost!
Now, anyone can do what I did. But the trick to making money online selling guitars is to be smart and strategic. This post is intended to walk you through exactly what is needed and exactly how you can make money online without a website of your own.
Obviously, this post is specific to musical instruments (in particular, guitars), but these same principles can be applied to whatever physical good you prefer (jewelry, sports cards, beanie babies, or anything else that floats your boat).
Step 1: Mind your Money!
The most important thing in any business is to know exactly what your costs and profits are. I use a spreadsheet to help me stay on track. Here’s a real example of what it looked like for my first few sales several years ago:
At the top, I have an easy to read summary of my costs – for the product (including shipping) and for the supplies – as well as the total profit that I made over and above the cost of goods sold. For the products that I sold as parts, I have the individual sales prices rolling up to the bolded top row sales price. As you can see, I didn’t exactly knock it out of the park in terms of a return (I even took a loss on a few items). However a 36% return was a pretty decent start. And tracking my costs was a critical part of understanding where and what type of products I should invest in as well as what price level I should list them for sale at.
By the way, if you want to use my spreadsheet, you can get a copy for yourself here: https://docs.google.com/spreadsheets/d/1YYTOV6hg0OLb6i_aD5uqDq3NuNcKpFSlVrZO4L7WN_w/edit?usp=sharing
Step 2: Source your Products
This is the fun step. Shopping for things that you are interested in is always enjoyable – especially when you can get to enjoy them a little for yourself before you sell them.
For me, I use two primary sources for finding guitars to buy. 1) ShopGoodwill.com, and 2) Facebook Marketplace.
I think most out there are familiar with Facebook Marketplace. I go into detail on how to use it in my post about how to get a free guitar, and you can use several of those same settings to set up a recurring notification for guitars that you are interested in buying. If you are new to buying and selling online and aren’t familiar with fixing instruments, I would strongly suggest that you do not purchase anything that is damaged or not working. It’ll just take extra time and effort to try to fix it and the added cost of repairs will significantly dig into your profit. Instead, try to find deals – items that you know you can sell for a higher amount.
For me, bundles of items have worked well. In my above P&L example, I bought the Epiphone guitar and the Marshall amp as a bundle. I ended up taking a -$6 loss on the guitar but a $96 profit on the amp. Bundles help me to minimize risk.
ShopGoodwill.com is my secret weapon. You can find almost anything on that site, and typically you can get really good deals on quality used instruments. I will set up my search alerts for the types of guitars that I know will sell and through my experience, I know how much I’m willing to spend on each one.
Which brings me to Step 3.
Step 3: Know your Limits
This will take a little trial and error to find your sweet spot.
Let’s take an example of a guitar that I buy again and again: the Fender Squier SE Strat. Not only is this the best guitar to modify (in my opinion), it’s the best guitar to make a consistent profit on. This guitar is super prevalent on the ShopGoodwill.com website. I know that I can usually buy it for $50-90 (including shipping). I also know that I can sell the body on eBay for $50-70, the neck for $60-80, and the loaded pickguard for $10-20. Therefore, I’ll get somewhere between $30-$120 of profit every single time. Obviously, the biggest factors on profit are the purchase price and sales price. So, I typically won’t overspend on this item and regularly get it for around $60 total.
Knowing your selling limits is important as well. Typically I’ll use eBay to sell my guitars. I have an established shop and shipping is really straightforward and easy. Through trial and error here, I’ve found that the most effective way of selling for me is to list the item at the top end of what I expect to get for it and offer free shipping. There’s something about that free shipping that really makes these items move quickly. That said, I’ll make sure to calculate any shipping costs into my P&L to make sure I have a good view of what my profits are.
Step 4: Set up you Online Store Front
The good thing about leveraging 3rd party websites to make money online is that there are many options to choose from. You want to pick the channel that aligns best with how your potential customers will buy.
I’ve mentioned three different ones in this post (eBay, Reverb, and Facebook Marketplace) and I’ll walk through the pros and cons of each one.
Option 1: eBay
Pros:
- eBay is an established domain with “baked-in” SEO – your product pages will appear in Google search results when someone searches for your product.
- It is universally recognized as a trusted marketplace. People all over the world use it.
- It’s relatively easy – you can do everything from taking pictures to posting online right from the app on your mobile device.
- There is minimal risk involved with the sale (as long as you don’t meet up to sell in person)
Cons:
- It can be expensive – for most categories, eBay charges a 12.9% selling fee on products up to $7,500 and an additional 2.35% on the portion over $7,500.
- For musical instruments, however, the selling fee is only 6% up to $7,500.
- With lots of people comes lots of opportunity for scammers. Beware of the messages from buyers that want to meet up in person or want to take the conversation off of eBay messaging.
- You have to establish yourself as a seller to get a premium price on your products. It takes time to up your seller rating.
Option 2: Reverb
Pros:
- Niche marketplace specific to buying and selling musical instruments. You have the right audience right away!
- Baked in SEO. Similar to eBay, your product pages show up in search engine results.
- It is also easy. Again, similar to eBay, you can do it all right from the app.
- Excellent support and content for you as a seller. Reverb really does a good job.
Cons:
- Expensive. The selling fee on Reverb is a flat 7.5% plus a $0.25 listing fee. This is more than eBay for musical instruments.
- Not as well known. Beginners and people buying instruments as presents likely don’t know this site exists.
- You have to go through an application process to be a seller.
Option 3: Facebook Marketplace
Pros:
- It’s free!
- It’s easy – do it all from the Facebook app.
Cons:
- It can get a little sketchy – loooooooooots of scammers regularly frequent the marketplace.
- No SEO benefit.
- You usually meet up in person to sell your item. Yes, you can ship, but you don’t get the same shipping discount you do on eBay.
Step 5: Iterate and Optimize!
Just like learning anything else, it will take time for you to become a master of online selling.
Take notes on what works and what doesn’t. Keep good books on pricing levels and cost of goods. Try different selling options – i.e. auction vs. fixed price listing. Soon enough you will be moving product off your shelf and raking in the benefits of an online store.
Follow these steps and you will be making money online in no time!
