Who Wants to be a Millionaire?

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Jennifer Canty, 35
Dyscern
Sterling, Virginia
eBay User ID: dyscern
2006 Sales: $6.8 million
Projected 2007 Sales: $12 million
eBay Business: Consumer electronics sales, including MP3 players, PDAs, cell phones, smartphones, digital cameras and portable DVD players

Back to Work: After having her first child, Jennifer Canty's plan was to return to her old consulting job. But when it didn't work out, she began looking for a new opportunity. Her husband and now business partner, Bill Frischling, 35, an avid buyer on eBay, suggested she take a look at selling on the site.

Using her analytical consulting skills and MBA training, Canty researched the market, developed a business plan, established performance metrics and focused on achieving profitability. Because she already knew something about consumer electronics, she opted for them as her niche. Their modest size meant shipping wouldn't exceed each product's value and they would be easy to store.

Since Canty started the company in 2003 from her basement, selling salvaged, end-of-life and customer-returned consumer electronics, her sales have at least doubled each year. Canty has moved the business into warehouse facilities and started selling new consumer electronics in addition to refurbished items. She lists approximately 1,000 units a week.

Canty believes Dyscern's success came from her decision at the very beginning to run an eBay business, as opposed to a part-time resale shop. "eBay makes it easy to start up," she says, "but there is so much more to it if you want to start a full-time business."

Cost Cop: One area Canty pays very close attention to is cost control. She knows exactly what her costs are, outsources when it's cost-effective and is vigilant about staying on the right side of eBay's regulations. But Canty also knows that it often makes sense to let go and bring in outside help. Within six months of starting the business on eBay, for example, she brought in a partner, John Angerer, 35, to help manage the business, which now has 14 employees.

Smart Tip: Make sure you know your cost structure--how much each piece of the process is costing you, from product acquisition to eBay fees to salaries, shipping and overhead. Remember: To grow, you need to have positive cash flow.

Lanny Morton, 38, and Deena Morton, 39
Sportscloseouts.com
Glendale, Arizona
eBay User ID: sportscloseouts
2006 Sales: $3.3 million
Projected 2007 Sales: $4 million
eBay Business: General sporting goods

A New Playing Field: "Four and a half years ago, I was broke" and needed to make some money, says Lanny Morton, owner of Sportscloseouts.com. When his then-girlfriend, now wife, Deena, spotted some baseball bats on sale for $40 each, she encouraged Lanny to buy them to resell on eBay. Despite the fact that he had next to no experience with eBay, he knew the bats were worth more than $40. So he borrowed $800, bought 20 bats and listed them for sale on eBay. They quickly sold for a total of $1,300.

Recognizing the business's potential, Deena wanted in, so she invested $1,300 and they bought more sporting equipment. It sold for $2,600. Reinvesting that money, they earned $4,000, then $6,000 and up. "We put every penny back into the business for the first year and a half" and ran the operation out of Deena's house, Lanny says.

Today, the company typically runs 1,000 auctions a week, though during busy seasons, it increases to as many as 2,000 to 3,000. Everything from bats to water sports equipment to snowboards is available through Sportscloseouts.com, and items have an average selling price of $70.

Basic Training: What is currently a multimillion-dollar business started out small--very small. "We started with basic tools," Lanny says. "We wrote shipping labels [from] the floor of the living room with a pen," rather than printing them or using shipping software. Although the process was time-consuming, it was also low-cost, which was a priority in those days.

But eventually, the number of auctions exceeded the couple's capabilities, and they began investing in people and resources to help them manage the business more efficiently. They call one such resource, ChannelAdvisor, a lifesaver. "We had a day right before Christmas when we had to ship 800 packages," a number much higher than the typical 150 to 200 packages a day, says Lanny. "In the old days, that would have taken us a week." But with 10 employees and their automation tools in place, getting the packages shipped was a breeze.

The couple attributes much of their success to taking care of their customers. "We do whatever it takes to make it right," says Lanny. In return, they earn loyalty from their customers--20 percent of whom are repeat buyers.

Smart Tip: Negotiate attractive shipping rates with major carriers to make it affordable for people overseas to buy from you. Approximately 20 percent of Sportscloseouts.com's shipments head overseas, and the percentage is growing.

Ted Corriher, 43
Corriher Implement Co.
Newton, North Carolina
eBay User ID: tractor123
2006 Sales: $3.2 million on eBay
Projected 2007 Sales: $4.5 million on eBay
eBay Business: Farm equipment and accessories

Planting Seeds of Growth: "Once you list on eBay, your business is going to increase," says Ted Corriher, owner of Corriher Implement Co. It's a foregone conclusion. And he should know--Corriher's sales increased by a whopping 400 percent in three years through eBay.

Corriher Implement Co. was founded more than 60 years ago by Ted Corriher's father, Charles, as a mule-trading business turned-farm equipment supplier. But it was Ted who took the business online in 1999.

Corriher first experienced eBay as a buyer, and he constantly marveled at the savings he found there: "I haven't found anything that I couldn't buy on eBay for less," he says. Impressed by the volume of buyers on eBay, he decided to give selling a try, putting New Holland agricultural and industrial equipment up for auction. The products were a hit. Within two years, eBay generated $1.2 million in sales for the company, and Corriher knew he was onto something.

The company currently lists about $200,000 worth of inventory at a time--everything from New Holland T-shirts to $50,000 new tractors.

Ready for the Harvest: Such growth does come with some challenges. "Be prepared for the increase," says Corriher. As sales rise, so will the number of e-mails and inquiries. Corriher's e-mail volume has quadrupled in the past few years, and the company has had to add staff to be able to respond to customers in a timely manner.

Smart Tip: Representing your products accurately and completely will eliminate most potential problems. That means showing imperfections clearly in photos, mentioning any flaws and addressing customer questions before they come up.

You could be the next eBay millionaire. To learn how, see Entrepreneur magazine's Startup Guide #1824, eBay Business, available at www.smallbizbooks.com; and visit our eBay Center online at www.entrepreneur.com/ebay.

Marcia Layton Turner writes regularly about small-business issues and is author of the award-winning book The Unofficial Guide to Starting a Small Business.

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Marcia Layton Turner's work has appeared in Woman's day, Health and Black Enterprise. She is based in Pittsford, N.Y.

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This article was originally published in the May 2007 print edition of Entrepreneur with the headline: Who Wants to be a Millionaire?.

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