6 Steps to a Successful Online Auction Business

Step 2: Find a Focus

This is very likely your most important step of the process--where you decide what type of business to start. eBay is really just a sales outlet, like the mall or a catalog. Your real business is what you decide to sell on eBay.

Most folks find their inspiration in something they have experience with. PowerSeller Joshua Mandell spent his free time and extra money collecting baseball cards, and found once he started selling cards on eBay, he could better support his hobby/habit. "After six months of casual selling on eBay, I realized the potential for profitability, " says Mandell, who handles the ordering, sales and marketing, while his partner, Sabian Craig, does the shipping, customer service and inventory. Today, he averages 1,500 to 2,000 auctions each month and has sold to bidders in more than 35 countries.

Kathleen and Raymond Manning also had stock just waiting for eBay. Raymond had been looking to unload the inventory from video rental stores he'd owned during the 1980s and '90s, but thought brokers' offers for the videos were too low. Kathleen, a former banking VP, was laid off during a bank merger, began looking up some of the video titles on eBay and discovered the perfect market. "I have since sold thousands of tapes," says Kathleen, who works out of their Phoenix home. "During the past two years, my inventory has continued to grow as my husband--a true 'scrounger' as he likes to call himself--brings me more and more items to sell. There is truly an abundance of 'gold in the hills,' and our only constraint is time." To escape that constraint, Kathleen has recently enlisted her teenage daughter for help.

Once you begin browsing your closet and hobbies for things to sell, return to that completed item search. "Do research on the particular item you plan on selling, even if you only have one," suggests Collier. "See what it sells for, so your expectations aren't high in the sky." Collier provides this example: She recently inherited a Dwight D. Eisenhower commemorative plate. Thinking this was eBay gold, she looked it up. "It was worth six bucks," laughs Collier. "Not wanting to sell it for $6, I put it aside as something I'll sell in the future."

So if you think you think you've struck auction gold--for example, found a store clearing a particular item at dirt-cheap prices--do your research before you buy the lot of them. You may find out you can only get 25 cents more, which won't be worth your time, money or effort.

How to Start an Online Auction Business
  • Step 2: Find a Focus
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