URL: http://www.entrepreneur.com/magazine/entrepreneur/2004/april/69982.html

If you want to sell a product, go to eBay. If you want to test a product's viability, you can go to eBay, too.

That's what Richard Crouse and Pamela Phillips did when they wanted to gauge the demand for their newly invented BagLight, a small, convenient light that attaches to the insides of handbags. In 2002, after producing the first BagLight prototypes and receiving positive feedback from friends and family, Crouse, 46, and Phillips, 43, wanted to see exactly what the average eBay handbag purchaser would think about their unique product. "EBay's the big marketplace now on the Internet," says Crouse. "It looked to me like a great way to jump-start my project."

Because they knew eBay customers wouldn't be searching for a purse with a light, Crouse and Phillips listed their product with purses and handbags. This kind of strategy is important when testing any new product on eBay, says Marsha Collier, author of eBay for Dummies, 4th Edition and Starting an eBay Business for Dummies (John Wiley & Sons).

"List [your product] in categories where people would look for a similar type of product," she says. If, for instance, you sell a shampoo that removes chlorine from hair, list it in the "Health & Beauty" section as well as the "Swimming" section. "People need to see the item, and remember, eBay is a rotating market," Collier continues. "To hit people, you have to stick with it. If you're not successful in the beginning, keep listing that product, and get creative with your marketing."

When your product is a new spin on an old idea, use eBay as a research haven. Check for listings of products like yours, and determine how much those items are selling for, says Corey Rudl, president of The Internet Marketing Center in Blaine, Washington. "I'd recommend testing one listing at a time," he says. "Try listing your first unit with a low starting price with a reserve price. At the end of that auction, post a new listing with a higher starting price but no reserve, and keep all other aspects of the listing identical. See which starting price results in a higher winning bid, then use that starting price for your next set of testing."

Crouse, for instance, found that BagLight sold well at an $8 price point. He also discovered that women would buy upwards of four or five as holiday gifts. And although he'd had some experience with online selling before, Crouse took full advantage of all the services eBay provides to sellers-such as help setting up a seller's financial account and listing product photos.

All this preparation and testing have really paid off, and today, Crouse and Phillips still sell on eBay as well as on their own Web site and in specialty stores across the country. The partners currently project 2004 sales to reach $250,000.

Though eBay is a great place to start and offers a wonderful way to get your products to a large demographic at once, if you're selling like mad, you should consider creating your own Web store on your own site to sell the product, says Collier. Then apply the pricing and marketing strategies you learned to the brick-and-mortar world as well. And gather all the information you can. "Make sure that even during your testing phase, you are collecting the e-mail addresses of your winning bidders," says Rudl. "This way, you will start to build a group of loyal customers you can continue to market to once you take your efforts beyond eBay."

For more advice on using eBay in your business, check out Entrepreneur magazine's Start-Up Guide #1824, How to Start a Business on eBay (www.smallbizbooks.com).