Success Secrets of eBay Millionaires
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Editor's note: Check out these entrepreneurs' top secrets in our eBay Millionaires slideshow.
David Wirtenberg, 28
Outrageous Auctions (eBay User ID: outrageousauctions)
New York City
Projected 2006 Sales: $8 million to $10 million
Description: Engagement rings, wedding bands and other jewelry
Turning Talk Into Sales: David Wirtenberg loves to talk. "I could talk your ear off," he says. "I love what I do. I'm a very passionate person." His ability to make sales, and his prior experience in sales for Bear Stearns and Auto Data Processing, helped him build his business from scratch in 2003. His father-in-law became his inspiration and behind-the-scenes mentor. "He said, 'Let's see if we can sell jewelry on the internet,'" Wirtenberg recalls. "I went to 47th Street in Manhattan. I knocked on every door. I didn't know anything about diamonds at the time. I was looking for suppliers, for an education, anything." He ended up buying a couple of diamond rings, and he immediately sold them for a profit on eBay. "I thought, 'This could be something.'"
Many Facets to His Business: Today, Wirtenberg sells through his websites (www.outrageousauctions.comand www.outrageousdiamonds.com) and through eBay. "I use eBay to get new customers and new traffic," he says. "Most of my diamond auctions start at 99 cents. Sometimes I lose money; sometimes I make money. Whatever makes the customer happy, I do. Our packaging is second to none. Sometimes we pack our diamonds in Faberge eggs [for free]. Once you have customers, you have those customers for good."
Personal Touch: Wirtenberg speaks fondly of the personal connections he has made and recalls the time he and his wife, Danielle, personally delivered a $14,000 ring to a customer in California. "The fringe benefits touch you deep inside," he says. "You play a huge role in people's lives. I have provided advice on people's engagements. I feel I am blessed every single day with the direction this business has taken."
Marat Denenberg, 25
Narro Corp. (eBay User ID: narro)
Hackensack, New Jersey
Projected 2006 Sales: $1.8 million to $2.3 million
Description: New and refurbished disk drives and other computer hardware
An Education Outside the Classroom: Marat Denenberg was introduced to eBay when he was a student at Rutgers University, where he eventually obtained bachelor's degrees in computer science and economics. His roommate encouraged him to check out the auction site as a great place to find merchandise at low prices. "I used to avoid eBay because I thought it was only a place to buy and sell collectibles," says Denenberg, who soon learned that selling on eBay was a perfect way to put his double major into practice. "I discovered I could buy refurbished DVD drives from factories. I bought them in bulk, attached front plastic covers I had purchased separately, and sold them on eBay for a profit. Because the drives were now attractive, people were interested and bought them. [Each] cover only cost 15 cents, but it virtually doubled or tripled the value of the drive."
Secrets to Success: Like many full-time eBay entrepreneurs, Denenberg uses a third-party auction service pro-vider-in this case, a company called ChannelAdvisor-to build volume. He has also used his computer science background to develop customized software that streamlines shipping and addressing. These days, he completes 50 to 80 transactions per day, and averages $4,000 in daily sales. Having negotiated volume discounts with UPS, he also attracts a good deal of business by offering free shipping to customers who purchase directly through his website.
Planning Ahead: Even though he owns a successful eBay business and is leasing a 4,400-square-foot warehouse, Denenberg is not one to rest on his laurels. "I'm pushing the business forward on a daily basis," he says. "To a large extent, there's no finish line."
Eran Dekel, 30
DeCalo Fashion (eBay User ID: decalofashion)
Mineola, New York
Projected 2006 Sales: More than $2 million
Description: Luxury designer menswear at 40 percent to 80 percent below retail prices
It's All Relative: Family members who are entrepreneurs helped Eran Dekel start his own fashion company. His brother-in-law, Darren Pamatat, founded SpaLook.com, which sells high-end skin-care products. "I saw him make millions from zero," says Dekel. But it was a chance connection with an uncle who owns a clothing store that started him in the fashion business. "My uncle asked me to help him liquidate some designer suits on the internet. Right away, I thought of eBay," Dekel says. "When the first suit sold for a 300 percent profit, a light went [on] in my head." The same uncle helped him find wholesale suppliers-one of the biggest hurdles for any beginning eBay seller.
Engineering the Sale: eBay challenges individuals to do their own market research to select, price and present merchandise. Dekel, who graduated from Cooper Union in New York City with a degree in engineering, saw such activities as an extension of his studies. "The problem-solving and analytical capabilities I learned in college really prepared me for this type of business," he says. "You have to perform both quantitative and qualitative reasoning in determining what products to sell and [you need to know] how to think outside the box when it comes to completing transactions."
A Risk-Free Zone: Selling apparel on the internet is no easy task. Sellers have to build trust among customers who can't physically try on their clothing. "We offer a money-back guarantee, free shipping and a free silk tie with every suit purchase," says Dekel. "We try to make it as risk-free as possible."
Branching Out: After finding success on eBay, Dekel was able to launch his own DeCalo Fashion website. And he shows boundless enthusiasm. "The potential for success is within each individual," he says. "You can't be afraid to take risks or try something new."
eBay Dropoff Store, Stereo Equipment & More
Amy Mayer & Ellen Navarro, both 25
Express Drop (eBay User ID: expressdropchicago)
Projected 2006 Sales: More than $1.4 million
Description: An eBay drop-off store that sells on consignment for individuals and high-end retailers
No Place to Hide: Unlike other young eBay merchants, Amy Mayer and Ellen Navarro, who run an eBay drop-off store, can't hide behind their telephone voices. Most of their customers are older than they are, and so are the students who attend their eBay business classes. "The fact that we're so young piques people's curiosity," says Mayer. "That makes it extra important to present ourselves in a charismatic and confident way."
A Dream Come True: Navarro always wanted to start her own business. "I wrote a business plan in my senior year of college," she says. Mayer and Navarro met while working at a clothing boutique. They talked about starting a business together and decided to open an eBay drop-off store--a new idea in early 2004. They research merchandise the moment the customer arrives and only sell items that will fetch at least $50 on eBay. They get a leg up on the competition by offering personal service and being located at a busy intersection where parking is readily available.
Growing Strong: After only two years in business, Express Drop moved into a 3,400-square-foot warehouse. Navarro and Mayer also started franchising their business concept. "You have to be professional at all times and always be thinking out of the box," says Navarro. "We don't just wait for clients to come to us. We pursue clients that can supply us with clothing. We see every single [entity] as a potential client, from the grandma on the street to Nordstrom."
Chris & Lisa Rush, 30 & 26
HiFiSoundconnection (eBay User ID: hifisoundconnection)
Projected 2006 Sales: $8 million
Description: Audio and stereo equipment for use at home and in motor vehicles
It's a Family Affair: The mom-and-pop grocery store might be a thing of the past, but many eBay businesses keep their work all in the family. Chris Rush founded HiFiSoundconnection with his wife, Lisa, and employs his younger brother Tony, his brother-in-law Justin Cash and family friend Kevin Kenkel. "It lightens the stress factor," Rush says of the benefits of working with family members. And his team turns around a tremendous number of transactions, considering that the average sale price of an item is $96.
Music to His Ears: In 2000, Rush started buying sports collectibles on eBay. He quickly moved to selling car audio equipment, having installed car stereos since his teenage years for extra money. An initial $10,000 loan from his grandfather helped him during startup. "It started with an extra bedroom in a duplex. I filled that room, filled the garage, and we're now in an 8,000-square-foot warehouse," he says. "It's been a real rocket ride."
Keep the Customer Satisfied: Rush understands his customers because he is so close to them in age. "My demographic is 15- to 25-year-olds, and they are really impatient," he says. "We have to cater to people who click on things and make instant purchases. That generation doesn't want to wait. The biggest motivator for us is providing them with good service." The company recently added a toll-free phone number. "If a [customer] buys something and has problems installing it, we will guide him through the process."
Personal Touch: With its feedback system, eBay encourages sellers to provide prompt delivery and good service. But Rush's motivation goes beyond that. He welcomes hard work and the responsibility of running his own business. He especially likes selling to members of the U.S. mili-tary stationed overseas. "We provide distractions for them," he says. "It's like we're sending them a Christmas present. That's the most rewarding thing for all of us."
Dan Glasure, 31
Dan's Train Depot (eBay User ID: dans.train.depot)
Projected 2006 Sales: $2.5 million
Description: Model trains and train accessories
Needing a Bigger Piggy Bank: Dan Glasure's business experience goes back to age 8. "The first comic book I ever bought was Spider-Man No. 1. I bought it at a garage sale for a nickel. I sold it the same day for $100," he remembers. But that's not all. When the buyer asked Glasure where he had found the comic, he told him, "I'll tell you where the rest of them are, but you have to give me a finder's fee." He got his finder's fee.
On the Fast Track: Glasure started by selling comics on eBay, but "it was not until I traded some comics for a big box of Lego toys and the Legos sold incredibly well that I really saw what eBay could do," he says. Next, he started selling toy trains and accessories: "Today, we are the number-two seller in the whole Toys & Hobbies category on eBay."
More Than Child's Play: These days, Dan's Train Depot has sales of $20,000 to $30,000 each week. That success inspired Glasure to branch out to websites (www.brasstrains.comand www.danstraindepot.com), where he can sell directly to the public, and a brick-and-mortar store, which sells different items for train collectors than those he offers on eBay. With the help of one of his customers who is a professor at a university business school, he drew up a business plan and streamlined his company by downsizing his staff. "Everybody thinks you're not working at all, selling toys on the internet," Glasure observes. "It's a lot of work, but it's definitely more fun than the average job."
Tech Accessories, Model Trains & More
Mordy Eisenberg, 30
GSM Cellular (eBay User ID: gsm-store)
Airmont, New York
Projected 2006 Sales: $2.5 million to $3 million
Description: Computer equipment and accessories for cell phones, iPods and digital cameras
From Market to Market: With an estimated 430,000 people selling part or full time on eBay, competition is continually growing. But that hasn't stopped Mordy Eisenberg from thriving in one of the most competitive categories: Consumer Electronics. He landed there after doing extensive market research, something he learned in the stock market industry: "eBay is a giant market, and a lot of the rules for buying and selling in the stock market apply, [like] not flooding the market and not showing your hand."
Making It Month to Month: Eisenberg started out slowly, selling on eBay part time. "Once I did that, I [said], 'Let me see if I can make a go at this full time,'" he says. "I gave myself a month to see if I could succeed. I extended it for a month, [then] another month, and never looked back." Eisenberg began with a drop--ship supplier--a company that held the inventory and shipped it for him on demand-but today he handles all the inventory and shipping himself.
Freedom to Grow: eBay entrepreneurs have the freedom to experiment that traditional business owners don't always have. For instance, GSM Cellular is expanding beyond its core product line of cell phone accessories to architectural moldings and other home décor accessories. "Most of the people I know who have a business background in college look at eBay and say, 'They never taught us this in college,'" says Eisenberg. "The beauty of eBay is that you can be in a few different places and do well in each."
Tiffany Tanaka, 24
wesellthings4u.com(eBay User ID: wesellthings4u)
Projected 2006 Sales: $2.7 million
Description: An eBay drop-off store that sells a wide variety of items on consignment
Family Connections: After studying fashion design and graphic design at the University of San Francisco, Tiffany Tanaka looked forward to a career in New York City. But after returning to Hawaii to help care for an aging family member, she realized "there was nothing here jobwise having to do with design, so I started selling things on eBay," she says. "Soon, people started asking me to sell for them. I had to make it into a business because it was taking up so much of my time."
Picture Perfect: Tanaka's design experience plays a role in how she presents merchandise for sale. "It's an art, creating all these auctions for different people," says Tanaka, who pays special attention to how objects are photographed. Many of her 12 employees have backgrounds in art and photography, helping them present items in an attractive way.
Aloha eBay: Her drop-off store has sold everything from a rare one-cent piece for $800 to a Chagall book about stained glass for $5,000. Niche items and unusual products always sell well on eBay, and Tanaka has found that Hawaiian cultural pieces-from antique feather leis to Hawaiian paintings-are in demand, though she's selective with what she accepts for consignment because shipping costs from the islands are high. Someday, she plans to expand to Asia and Europe.
Timesaver: Tanaka enjoys helping people of all ages. "Many of our customers are older people who want us to sell things for them," she says. "But a lot of people are younger than me, and we're just saving time for them. Human beings are so busy here on earth, I don't feel many people want to sell on eBay on their own."
James Anderson, 28
Anderson's Wholesale (eBay User ID: andersonswholesale)
Projected 2006 Sales: $2 million
Description: Accessories for iPods and other electronics equipment, as well as "metaphysical" items such as swords, chalices, runes and wands
Putting Off the Paper Chase: James Anderson planned to start law school in the fall of 2005. When he announced to his parents that he was postponing school because he was making more money selling on eBay than he would as a law school graduate, he got a predictable reaction. "I think they kind of thought-what's the word-that I'm crazy, maybe," he says. "They're happy I'm doing well, but it was a shock. eBay has the feeling of insecurity, whereas law school is a definite thing."
From Snowboarding to Snowballing Sales: Anderson started selling on eBay when he was a college student in Utah. "I sold concert tickets on eBay part time to help with college expenses and 'fun money' [for items] such as snowboarding season passes," he says. He still occasionally has time for snowboarding, but he keeps busy selling 50 to 70 items per day.
Cutting Fees and Sale Prices: Anderson lists merchandise in his eBay Store at fixed Buy It Now prices. "I try to beat other auction sellers by offering merchandise at a lower price-as much as 50 cents [less]," he says. After problems and setbacks with unreliable distributors, he says the key was finding a good supplier through word-of-mouth.
Bringing Up Baby: Anderson and his wife, Emily, now have three children--and his success on eBay came just when his family needed it most. The income enabled Anderson to pay off his credit card debt, buy a house and tackle his student loans.