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A Startup Success Story: Movie Magic USA By focusing on hard-to-find gems, these eBay sellers parlayed film fanaticism into startup success.

By Geoff Williams

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Description: Video and DVD sales
Founders: Crystal Holt, 36, and Steven Holt, 46
Location: Denison, Iowa
2004 projected sales: More than $700,000
eBay user ID: moviemagicusa

Steven Holt grew up admiring John Wayne so much that he may haveincorporated a little of The Duke into his personality. After all,Steven became a Marine, a tough-guy career that Wayne would haveadmired. Naturally, his favorite film is a John Waynemovie--Sands of Iwo Jima. "It's the greatest Marinemovie ever made," he raves.

After the Marines, Steven fell in love with Crystal, a highschool teacher, and later married her and moved to her hometown,Denison, Iowa. He got a job with a home-warranty company, and theylived on a 180-acre farm. They had a son named Calvin, now 9. Lifewas good.

That would have been that--until Crystal attended eBayUniversity with her mother, who had started a business on eBay.Crystal thought it would be fun to open one, too, to earn extraincome. Because Steven was such a movie buff--he also lovesanything starring Peter Cushing, Christopher Lee and VincentPrice--they decided to try selling films. They found a distributor,and in September 2002, started selling. By November, they realizedone of them had to quit his or her day job, or they would have toscale back the business.

Steven left the home-warranty industry. He says becoming anentrepreneur was "scary at first." But the way he seesit, "Your fate is in your own hands. I had never stepped outlike that. When I quit my job, we had only been doing this companyfor two months."

But he has no regrets. "I love it," says Steven, whoseoffice has been overtaken by movie memorabilia. "My biggestissue is balance. I could work on this business 24 hours a day. Ihave to fight the urge to [not] close the door."

The Holts, who first started by offering John Wayne movies, havesince gained an edge by selling relatively difficult-to-find films.At their eBay site, you'll easily find the 1980 Volkswagenclassic Herbie Goes Bananas, but not many recent films. Whenthey stocked the three-disc Indiana Jones trilogy, it soldterribly, Steven surmises, because anybody could find it atvirtually any store in the country. The Holts buy their inventoryupfront so they can ship within 24 hours and not be dependent ontheir distributor.

Now the couple sells 3,500 to 6,000 movies a month. That's alot of movies, but then eBay is "a global marketplace,"says Steven, who has two part-time employees to help ship moviesfrom the office building behind their farmhouse. "It'sincredible. There are a kazillion people who shop oneBay."

The Holts see a lot of future growth in their company and planto soon transition their two part-time employees into full-timepositions. Last year, the couple tried taking a two-week vacationand admit it was almost a disaster; they were backlogged withorders when they returned. But by training their employees to fillin, the Holts will be able to take sick and vacation days.

They're also grateful for the assistance they receive in theeBay community. Not only does eBay send them tips through e-mail onhow they can market themselves better and bring in more sales, butthey also receive advice from other sellers and customers on eBay."That's the difference between eBay and other types ofonline auction sites," says Crystal. "It's like atraditional community, even if you may not ever see the peopleyou're doing business with. But people here just seem so muchfriendlier than they do in other parts of the Internet. Whateveryour questions and concerns are, the people on eBay are nice, funpeople who genuinely want to help, and we all give each otheradvice."

Whatever business you go into, sell what you love, urgesCrystal, who, when she isn't teaching, focuses on the customerservice end of the business-writing or calling people who havequestions. "That's what makes it rewarding. Having abusiness isn't like you see it on infomercials, whereyou're sitting on the beach sipping a mai tai. That'sunrealistic," Crystal says. "You're not going to haveto work, work, work, but you're going to have to work. But thenice thing is that you can take off to have lunch with your kid andnot worry about exactly when you're getting back, and you makeyour own hours."

Then there are the intangibles. "Everybody has a favoritemovie," says Crystal, who favors Rock Hudson and Doris Dayfilms. "We've received e-mails from people who tell usthey bought a movie from us because it was the last film theywatched with their father or grandmother, or because they wanttheir child to see a movie they loved as a kid. It makes you feelgood that you're making a difference in somebody'slife."

Geoff Williams has written for numerous publications, including Entrepreneur, Consumer Reports, LIFE and Entertainment Weekly. He also is the author of Living Well with Bad Credit.

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