Let the Bidding Begin

An eBay business could be your entry to the online marketplace. Find out how to get started today.

In 1995, when Pierre Omidyar introduced an online business venue that was essentially a virtual garage sale with auction pricing, no one knew a retailing revolution was about to occur.

That site became known as eBay, and it's hard to find someone today who hasn't at least heard of the popular online auction company. On any given day on the site, an estimated 12 million new and used items are available, 1.7 million new listings are posted, and sales totaling some $40 million take place. And all it takes to get your share of that market, which is worth nearly $15 billion annually, is a computer, a modem, a digital camera or scanner, and something to sell.

What's important to understand from the start is that eBay is a sales channel that you can use exclusively or in addition to selling through a retail operation, mail order catalog, independent Web site or network of direct salespeople. You decide the type of business you want to have, what type of merchandise you're going to sell and how you're going to operate.

To sell on eBay, you'll pay a listing fee to post your merchandise and a final value fee (a small percentage of the sale price) when the item sells. To get a full explanation of eBay fees, check the eBay site.

What Can You Sell on eBay?
Deciding what to sell on eBay can be particularly challenging because your options are virtually limitless. Some of the more popular categories of items are cars, computers, consumer electronics, books, movies, music, sports items, collectibles, clothing and accessories.

Though eBay is a popular place for the sale of used items--ranging from high-dollar antiques to pieces of secondhand junk--it's also a good venue for brand-new, up-to-the-minute merchandise of all types and in all price ranges. Nona M. Cunane, 30, started out selling antiques on eBay in 1998. She did well, but decided she really wanted to work with a product she enjoyed more and that was easier to ship. So Cunane launched Stylebug.com, an online business that specializes in high-end designer clothing for women. Her Bear, Delaware, company does about $800,000 per year in sales--half of that on eBay.

Adam Ginsberg, 35, was already selling billiard tables in his retail store in Los Angeles when he auctioned one on eBay on a lark. It sold, so he put up another one. Within a year, he had closed his retail store and was selling exclusively on eBay under the name Zbilliards. This year, he predicts his eBay sales will hit $15 million.

David Schultz, 27, learned about eBay when his former boss asked him to study ways to sell merchandise online. Schultz launched IEPVisions in Orlando, Florida, in 2000 to sell baby and children's furniture primarily on eBay; he expects 2003 sales to reach between $2.2 million and $2.8 million.

Can you duplicate the success of these entrepreneurs? They all say sure--as long as you choose the right product line and apply sound business practices to your operation. As you take the first step of deciding what to sell on eBay, keep these points in mind:

  • The right product: Don't choose a product based on potential profits alone; be sure it's something you'll enjoy selling.
  • Cost and sale price: How much will the item cost you, and how much can you reasonably expect to sell it for?
  • Availability: Is the merchandise you need readily available, or will you risk having to deal with supply problems?
  • Storage: Do you have room to store the merchandise?
  • Packing and shipping: Consider what's involved in packing and shipping the merchandise. Even though the buyer typically pays the shipping costs, think about your labor, time and potential breakage.
  • Seasonal issues: Will the item sell year-round, or will it be subject to seasonal fluctuations?
Online Exclusive
Visit our eBay Start-Up Center to read an excerpt from our new business guide, How to Start an eBay Business, and to find out more about how to get in on the online auction revolution.

eBay does place some restrictions on what can be sold on the site and provides a detailed list of forbidden and questionable items. Essentially, eBay prohibits the sale of items that are illegal, fraudulent or harmful in any way; that might cause injury or damage; or that might infringe on someone's trademark or copyright. Users are responsible for ensuring their items are acceptable. If you do post an item for sale that is prohibited, eBay will notify you and terminate the listing.

If you buy from wholesalers, choose them carefully. You'll see plenty of ads on the Internet for liquidators, closeout sources, distributors and wholesalers--but, Schultz points out, keep in mind that everyone else has access to those same resources. "You need to find your niche," he says. The best approach is to decide what you're going to sell, then look for a source for it. Of course, you should always deal with reputable suppliers who provide quality merchandise and top-notch service.

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This article was originally published in the September 2003 print edition of Entrepreneur with the headline: Let the Bidding Begin.

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