Ebay is a great place for individual music collectors/fans like myself to both pick up CDs relatively cheaply and resell CDs that you no longer listen to.....but there are some things to remember to get the most out of your ebay experience:
Buying: Always look at the feedback of the seller but also look at the quantity of transactions. An overseas power seller might be offering CD albums pretty cheaply and might have a feedback score of around 99% but they might be selling so much that they still have 50-100 neutrals or negatives a month, due to slow shipping or items not turning up. As a buyer, it's your job to decide whether it's worth using a risky seller for the sake of getting a bargain.
Another thing to watch for is overstock. Many large volume sellers can sell albums so cheaply because these items are overstock and therefore have distinguishing marks eg. a holepunch in the barcode, a slit in the barcode, a promo stamp, a line through the barcode. It's up to you whether these things are a problem for you and it is worth checking with a seller if a price seems to good to be true because often sellers won't disclose that a barcode is marked or it will be in very small fine print in the auction. Also check feedback comments - has another buyer left a neutral or negative because of non-disclosure?
As a buyer, I only bid on items that are marked in "very good", "excellent" or "new" condition. When a CD is listed as "good", it generally means it's in pretty rough shape. If the CD you are bidding on has a digipack case or card sleeve, email the seller to check about its condition. Some sellers only grade the actual CD.
The Australian CD market on ebay is comparatively limited. Do a worldwide search for hard-to-locate items. Generally you can find pretty much any music release on ebay but don't expect to get a bargain on rare items - remember, there are other collectors on ebay as well just like you, who know which items are rare and which aren't. If you can't find what you're looking for, save your search and elect to receive a notification email from ebay when an item you are looking for comes up for auction.
Use Paypal to pay for all auctions if possible, it's just quicker and easier, both for buyer and seller. If you win an item, don't bombard the seller with emails asking when the item is going to be sent/delivered. As a seller, I can say that this is really irritating. Some sellers don't like to exchange a lot of emails - they just go about the business of sending the item and you get it when you get it. Please be patient!
Don't get into bidding wars! Decide what you're willing to pay for a particular CD and stick to it.
Selling: Contrary to what you might think, ebay is overwhelmingly a buyer's market. If you are just reselling items from your collection that you no longer listen to, be prepared to sell at a loss. You will not make money on normal CDs. Popular new releases seem to sell in the $20-$25AUD range but your average CD might only make $5AUD or so, even if it's a good title. On average though, if you are selling pretty good CDs, I think you can expect to get bids of $8-10AUD if your shipping cost is reasonable.
Speaking of shipping costs, go as low as you can. As a buyer, I know I don't consider buying a regular CD if the shipping cost is more than $4AUD. Having your shipping cost at $2-3AUD is appealing for buyers and you will attract more bids. If you can afford to go lower, even better. It actually costs only $1.45AUD to send a CD anywhere in Australia, not including the cost of the CD box (these are the best to use), tape and bubble wrap. Set a fixed shipping cost and be prepared to lose money on shipping at times. It's not the end of the world (unless you're actually running a business perhaps). Offering free shipping isn't a bad idea either - normally it evens out in the end anyway i.e. if your shipping cost is zero, then a bidder will bid more on the actual price of the auction .
The hardest part about selling is deciding on a starting bid price. There is a lot to consider here. If you're confident in the desirability of a particular CD and you know it will get a good price, then list the first bid at $1.00AUD. That way you attract the minimum possible ebay selling fee and still get the price you're after. The downside of listing a CD at such a low price is that if not enough people end up seeing your auction, the CD could end up selling for much less than it's worth and you might wish you'd have kept it. If you list a CD at a higher price, the ebay fee will be greater and you run the risk of attracting no bids. Having a first bid price of $10AUD or more is a bad idea and you will struggle to attract bids. Remember, you're paying to list these items so you want them to sell the first time! If you're not confident enough in the market to list items at $1AUD (and from my personal experience there's good reason not to be), then have a starting bid of around $5AUD. Doing a search of completed items (and items presently up for auction) similar to the one you are selling will give you a very good idea of what the market is and what you can expect to get for your CD. You might decide that it's not worth the hassle and you'd rather keep it.
Don't be discouraged if your items aren't receiving bids. The vast majority of bidding activity takes place in the last 5 minutes of an auction. For this reason, it's better to have your auctions finish when people are more likely to be at home (weeknights, earlier in the week). As long as your items have some watchers, you can be confident you will get bids. In my experience, 7 day auctions attract far more interest and bids than 5 day auctions. Consider revising the starting bid price during the auction if you can see your item isn't attracting much interest.
When you sell your CDs, be prepared with packaging materials and attend to those who paid by Paypal first. They have been good enough to pay instantly so they deserve to get their CDs in the mail ASAP. It can be overwhelming getting everything sent off when you have a lot of auctions finish at once. If you don't have a lot of time, perhaps list CDs in groups of 5 or 10, with a week gap in between.
Timing counts. If you have a few CDs from a band that you would like to sell, wait until they release a new album and are again in the public consciousness. This can make a big difference to a final auction price.
These are just a few tips off the top of my head that I think are important and I keep in mind both when buying and selling CDs. Ebay is a terrific resource for music, make the most of it!