A few years ago, Nancy and Daren Baughman wanted to sell a few things in their attic. But instead of having a garage sale, they decided to try eBay.
The items sold, and at a nice profit margin. For the Baughmans, it was the start of a new life as entrepreneurs. Today they operate eBizAuctions (eBay User ID: ebizauctions), a 2-year-old startup in Cary, North Carolina, that hunts garage sales and auction houses for quality art, collectibles, antiques, sterling silver and high-end electronics to sell on eBay. The company also helps others appraise and sell their items on eBay in return for a cut of each deal. Company sales in 2004 will top $100,000, and eBizAuctions is already a Gold PowerSeller on eBay, meaning its sales exceed $10,000 every month.
The Baughmans have branched into a storefront, and they've hired two part-time employees to help meet a growing volume of product shipments. "If it wasn't for eBay, we wouldn't have a business," says Nancy Baughman, 40, who has a background in appraising antiques, while Daren, 40, is a certified auctioneer. "We're the 21st-century auction gallery."
The Baughmans aren't the only entrepreneurs building a successful business by selling on eBay. Through its own research, eBay has determined that 430,000 full-time and part-time entrepreneurs now use the site to sell everything under the sun, from food to computer parts to construction equipment. These entrepreneurs "are making at least part if not all of their living as sellers [on eBay]," says , dean of eBay Education.
There's money to be made: According to eBay figures, $23.8 billion worth of goods were sold on eBay in 2003, and sales in the second quarter of 2004 reached $8 billion. That breaks down to more than $1,020 worth of goods per second. On any give day, you'll find more than 29 million items available on eBay, and an average of 3.6 million new items are added to the site daily.
Entrepreneurs are also attracted by easy access to a global marketplace. International business accounted for 46 percent of eBay's gross merchandise sales during the second quarter of 2004. "[When] you put something on eBay, you're getting the entire world seeint it," Nancy Baughman says.
For all the success over its nine-year life span, however, eBay still encounters misconceptions about its services. Among them:
Myth #1: eBay is only for used stuff. People think of eBay as a virtual garage sale, but eBay has evolved to offer brand-new merchandise. There are thousands of new items for sale, from the latest CDs to new Dell computers and HP printers.
Myth #2: There are no protections in place for sellers. Many people think that eBay doesn't off protections against fraud, but there are a number of mechanisms in place to protect both the buyer and the seller. A good place to start is at www.ebay.com/securitycenter, which offers dozens of tips and resources for selling safely. PayPal, the eBay service that allows businesses to receive online payments through a credit card or bank account, offers a Seller Protection Policy that protects against fraudulent chargebacks, eBay users have posted 2.2 billion feedback comments regarding their transactions-how the sale went, whether the buyer would recommend the seller and vice versa, eBay also offers dispute resolution services.
Myth #3: eBay is only for auction-style listings, and sellers can't set a price. It used to be that the only way to purchase an item on eBay was to place a bid and wait for the seven-day listing period to end. But with the introduction of services such as "Buy It Now" and eBay Stores, sellers can set a fixed price. In the second quarter of 2004, eBay's fixed-price offerings accounted for 27 percent of total sales. "If you're only selling through auction-formatted listings, you're really missing out on the opportunity to [attract buyers] who are looking to buy in the fixed-price format," says , eBay's director of seller development.
Myth #4: eBay is only about buying and selling collectibles. While the collectibles market-stamps, pottery, antiques, etc.-is a thriving business on eBay, it's not the only market. In fact, eBay is divided into 12 sales categories that each deliver $1 billion or more in worldwide annualized gross merchandise sales. In addition to collectibles, other categories include Books/Movies/Music; Business & Industrial; Cameras & Photo; Clothing & Accessories; Collectibles; Computers; Consumer Electronics; eBay Motors; Home & Garden; Jewely & Watches; Sports; and Toys. "It's not [just] a collectibles marketplace," says Lutwak. "Practical items now [account for] the overwhelming majority of sales on the site."