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Developing a Successful Business Want to be a PowerSeller, open an eBay Store, or find new markets for old inventory? Take a closer look at the many ways eBay can propel your business to new heights.

Opinions expressed by Entrepreneur contributors are their own.

When Angie Cash of Kennesaw, Georgia, first became an eBayentrepreneur five years ago (eBay User ID: cashco1000), she waslooking for a way to make money at home after the birth of hersecond child. But she didn't expect that her home décoritems business would take on a life of its own-and need its ownplace to live.

"I worked at home when I started, but the businesssnowballed and took over our living room, dining room, guest roomand basement," says Cash, 37. "Plus, we used our two-cargarage and foyer as the shipping and receiving area. The businessbecame so invasive in our personal life that my husband finallysaid, 'Move the business out of the house orquit.'"

Cash didn't quit. Instead, she moved the business to a2,000-square-foot house not far from her own home. Among the perkshave been a kitchen for taking breaks and a yard where both her ownand her employees' kids can play. But all that could soonchange. "The business has outgrown our second house, soI'm now shopping for a 5,000-square-foot commercial/industrialspace," explains Cash, who projects her company's 2004sales to reach $500,000.

Such is the power of eBay, the monolithic e-marketplace that hassuddenly morphed into a retailing leviathan in a phenomenally shortperiod of time. It's common knowledge that eBay is now theplace for consumers on the prowl for the goods or services theycrave. But it's not always as apparent that a lot of averagepeople are quietly becoming eBay moguls-and that many of them aredoing it from the comfort of their own living rooms or the backrooms of traditional storefronts.

You can do it, too. And the good news is, whether you want toexpand your brick-and-mortar business into the lucrative world ofe-tailing to boost profits or shift your eBay business's salesinto higher gear, eBay has a wide variety of tools available tohelp you make your dreams a reality.

Why eBay?

If you've been doing business the traditional way from aphysical location, then taking the plunge into e-tailing on eBaymight seem a little scary. But the fact is, eBay is a snap to use,and it's simply one of the best values around for movingmerchandise. After all, where else can you advertise an item for aslittle as 30 cents and still compete on a level playing field withsome of the biggest retailers in the United States-or even theentire world?

"The costs are so low that eBay really is an attractivealternative for people who are looking for a new saleschannel," says Jim "Griff" Griffith, author ofThe Official eBay Bible (Gotham Books)and dean of eBay Education. "The outlay of cash for inventory,a facility and employees, plus the expense of running abrick-and-mortar business, are traditional barriers for folks whodream of owning their own businesses. But eBay allows you to startsmall with minimal expenses while giving you the same access tobuyers as every other e-tailer in the eBay marketplace."

If you already own a business, there's an equally compellingreason to take the plunge into eBay today: It provides you with aviable outlet for moving that merchandise that's been sittingaround in your storeroom or warehouse too long. Take a cue from TomHowle (eBay User ID: thowle), owner of Sound Services, aprofessional audio store in Birmingham, Alabama, and an eBay userfor more than five years. He has listed and sold items that werebroken or missing parts (and disclosed the defects, of course)rather than tossing them, since he knew the parts might be of useto an eager buyer. "Even if you only get $20 for something youotherwise would throw away, you're ahead," says Howle, 44,whose business had 2003 eBay sales of $160,000-which makes up 36percent of his company's total sales.

eBay provides you with yet another significant businessadvantage that has nothing to do with selling merchandise. It'salso a great B2B channel for buying the merchandise and suppliesyou'll need to run your eBay and/or brick-and-mortarbusiness.

For example, let's say you're a new eBay seller workingout of your own home. Although you may initially run that businessfrom your dining room table, eventually you'll need officefurniture such as a desk and filing cabinets, as well as equipmentlike a copier and a fax machine. In addition, you'll need apowerful computer system with a high-speed modem or cableconnection that will give you a lightning-fast hookup to eBay. Butrather than heading down to the local office supply superstore tooutfit your office, you should check out the eBay BusinessMarketplace, where you can find everything you need, from cellphones to clocks.

Need a reliable vehicle to tote parcels to the post office ordrop the kids off at soccer practice so you can hurry home and postnew items? At eBay Motors, you can search for great deals on newand used vehicles alike. eBay is also a great source for thepacking materials, gift boxes and other supplies you'll need toserve your customers, and, like everything on eBay, they can beshipped right to the front door of your brick bungalow. Inaddition, since items sold at eBay are often offered at a fractionof their retail price, you'll spend less money on the tools youneed to run your business, which gives you more money to purchaseinventory you can sell to other interested parties.

By the way, selling to other eBay sellers is also a viableoption for entrepreneurs who wish to grow their businesses, aswholesaler Gary Neubert (eBay User ID: gatorpack) has discovered.This 52-year-old Tampa, Florida, entrepreneur has been selling awide range of packaging materials on eBay, including packingpeanuts and bubble mailers, since 1999. Although Neubert won'tdivulge his sales, it's no secret that he's an eBay GoldPowerSeller, which means his company racks up sales averaging$10,000 over a period of three months. (You'll read more aboutPowerSeller status later.) His eBay business has been sosuccessful, in fact, that he closed his commercial distributionlocation about six months after entering the eBay marketplace andnow sells exclusively online.

"eBay has given us phenomenal exposure to themarketplace," Neubert says. "So while we'rebusiness-dependent on other eBay sellers, the market is severalinches deep and miles wide. We also have a high percentage ofrepeat customers because we have a shipping guarantee that forcesus to ship the day orders are received, or we pay the shippingcosts."

Most Valuable Players

While your day-to-day online auction sales are likely to be themainstay of your eBay business, you'll find that, as yourbusiness grows, you'll want to use some of the other availabletools to help increase your revenue stream. One such tool is eBayStores. Starting at $9.95 monthly and with a listing cost of just 2cents per item for 30 days, eBay Stores is an excellent value,especially when you consider it costs $50 per month or more to hostyour own Web site.

In addition, eBay Stores allows you to "park"merchandise for as long as it takes to sell it when you use a Good'Til Cancelled listing. That can be a big timesaver if yourinventory is extensive, since it eliminates the need to keeprelisting. The only other charge is a Final Value Fee, which is thesame fee paid on every item sold through eBay. Finally, eBay Storesis an especially good place to list accessories and other relatedgoods that go with the items sold in your regular auction-stylelistings, since they prompt your buyers to add on to their initialpurchase.

"Cross-promotion with an eBay Store is the way to go ifyou're committed to selling online," says Marsha Collier,author of Starting an eBay Business for Dummies and an enthusiasticeBay buyer and seller herself (eBay User ID: marsha_c)."Besides, where else can you rent a store for $9.95 a month?You also can list items that you wouldn't ordinarily spendregular listing fees for, and if you make a sale, your cost is nextto nothing."

You could also use your store to list less expensive items, suchas the $25 keyboard-mixer-stand bag that Howle of Sound Servicesoffers in his eBay store. But he says that many of the items in hisstore are also listed on the eBay site at the same time becausethis technique tends to create a steadier revenue stream for hisbusiness. Incidentally, a great way to attract buyers to your eBaystore is by having active listings going all the time. That'sbecause the red eBay Stores tag that appears in the SellerInformation box can be a magnet for buyers who like yourmerchandise and want to know what else you offer. Try offeringcombined shipping at a reduced rate for multiple purchases as a wayto spark add-on sales.

Despite its low cost, eBay Stores isn't for everyone. Griffsays that if you only list five to 10 items per month, it isn'tworth having a Store. But if you have lots of inventory, it's agreat way to cross-market it and beef up your bottom line.

"When used properly, an eBay Store is fantastic because itgives you great leverage to ramp up your sales," says Griff."Even so, you shouldn't rush out and open a Store. Sell afew things first to see how you do before you make acommitment."

If you do decide to have an eBay Store, be sure to rotate themerchandise and offer new products regularly. Customers like to seewhat's new and will keep visiting if you give them somethingdifferent on a regular basis.

The requirements to open an eBay Store are minimal. In additionto being a registered eBay seller and having a credit card on file,you must have a feedback rating of 20 or more or be ID-verified.You also have to accept credit card payments through PayPal (aneBay service that enables businesses to receive and send onlinepayments through a credit card or bank account) or a bank merchantaccount.

To set up your Store, click on the "eBay Stores" linkin the box on the left side of the eBay home page. Among the thingsyou'll be prompted to do will be to select a name for yourStore (which can be your eBay User ID if you wish), provide contactinformation indicating where payments for merchandise should besent, write a description of your Store, list your specialties, anddesignate the categories in which you'll be postingmerchandise.

Finally, be sure to create an "About Me" page.According to Griff, this is one of the most underused features oneBay, yet it has great potential to increase your business, sinceyou can tell buyers about yourself and your interests (andtherefore put a human face to your name). Even more important, youcan use the page to provide a link to your own Web site, if youhave one, giving you another easy route to increased sales.

Feel the Power

If you're already an experienced eBay seller, you'recertainly aware of how important good customer feedback is forcapturing new sales. Positive feedback from satisfied customers isa sign to buyers that you're trustworthy, that you live up tothe promises you make about the products and services in yourlistings, and that you provide good customer service. Butthere's still another way positive feedback can help you growyour business: It can earn you the designation of eBayPowerSeller-a designation that has been shown to increasesales.

PowerSeller status is awarded based on several criteria. First,you must be an active seller with a minimum feedback of 100 with a98 percent overall rating. Next, you must average three months withgross sales of at least $1,000. That level of activityautomatically earns you a Bronze PowerSeller designation. Average$3,000 in three months, and you'll be a Silver PowerSeller;$10,000 makes you a Gold PowerSeller; $25,000 earns you thePlatinum PowerSeller designation; and $150,000 gives you TitaniumPowerSeller status. Exceed that level, and you'll probably earnsomething akin to Space Shuttle status in recognition of sales thatare out of this world.

While it's entirely possible that you could achieve thehighest PowerSeller level simply by selling a few big-ticket items(like the Hope Diamond or a Rolls-Royce or two), it's morelikely you'll reach these sales milestones by selling lots ofitems. And that's when the fun really begins. According to eBayexperts, earning a really high level of feedback from satisfiedcustomers-say, 1,200 or more positives-will make your salesskyrocket. So it's important to encourage every customer toleave you feedback, even if all you've sold is a $1product.

Savvy eBay sellers place little reminder slips in each packagethey ship encouraging buyers to leave positive feedback-andpromising to leave good feedback for the buyer in return. Somesellers prefer to wait until the buyer leaves feedback beforeresponding in kind. Just be sure to follow through if you promisegood feedback. It's one more way you can please thecustomer-and maybe make a customer for life.

Do Unto Others

Want to be an eBay entrepreneur without expanding your currentinventory-or, for that matter, even investing in inventory of yourown? Then consider becoming an eBay Trading Assistant.

Trading Assistants do all the work for people who don't havethe time or interest to handle all the details that go along withtrading on eBay. There are plenty of prospective clients, includingthose who are Internet-challenged and people who are intimidated bycomputers. Other likely clients include people who are liquidatingestates, those who don't have the time (or the patience) tohold a garage sale, and those who want to make a quick buck off thedusty collectibles in Grandma's attic with minimal effort.

All this creates a win-win situation for a prospective TradingAssistant. In addition to creating new moneymaking opportunitiesthat can lead to excellent profits, you can specify exactly whichmerchandise categories you wish to trade in. You also establishyour own rules and terms, which, of course, should be made crystalclear to your clients upfront-preferably in writing-so there are nomisunderstandings later.

As a Trading Assistant, you'll write item descriptions foryour clients' merchandise. You'll take photos and posteverything to eBay under your own User ID. You'll also pay theeBay fees out of your own account. Then, once you'vesuccessfully made a sale, you'll handle the process of sendingout the sold item(s) to the buyer. Finally, you'll leavefeedback for the buyer, and you'll be on the receiving end ofany feedback left by satisfied customers.

Naturally, all this expertise comes at a cost to the client.Typically, Trading Assistants charge a percentage of the sale(often 10 to 30 percent) once the sale has been made. Others chargea fixed fee just to take on a job, then charge an additionalcommission (say, 3 to 5 percent) once the item has sold. Thevarious selling fees-including the Insertion, Final Value andPayPal Fees, as well as postage costs&3151;are all charged tothe client and are often collected upfront.

There are only four requirements for becoming a TradingAssistant. First, you personally must have an eBay feedback scoregreater than or equal to 50 with a positive feedback rating ofgreater than 97 percent. You must have sold at least four items inthe past 30 days. And, of course, you must be an upstanding memberof the eBay community who will uphold the company's sterlingimage and values.

Signing up to be a Trading Assistant is simple. Just go to theeBay home page, and click on "Services." Then under"Advanced Seller Services," select "TradingAssistants." If you've met the criteria listed above, yousimply follow the prompts to create your listing in the TradingAssistants Directory. (Be sure to include details like thecategories you'll handle, the geographical area you'llcover, your rates and terms, and how you'll dispose of unsoldmerchandise.) Because there is no charge to be listed in thedirectory at this time, you're essentially getting a freeclassified ad from eBay. Make it count by including as muchspecific information as possible, both to entice prospectiveclients and to protect yourself from misrepresentation claims.

The Trading Assistant Program has been around since 2002, andthere are about 50,000 Trading Assistants worldwide. That'sgood news for you because it increases the odds that you'll bechosen when a person accesses the listing for your ZIP code. Tofind out who's currently operating as a Trading Assistant inyour area, click on "Services" on the Trading Assistantshome page, then "Trading Assistants," then type your ZIPcode (or area code) into the "Find a Trading Assistant in YourArea" box. You can also search by the type of merchandise theyhandle (or all categories if you prefer). You'll immediatelyget a list of sellers in that ZIP code, along with pertinentinformation about their operations.

One type of Trading Assistant is the Trading Post location,which is a brick-and-mortar retail location where customers candrop off items that can be sold for them on eBay. Businesses thatalready have a storefront or create a storefront to sell for otherson eBay can meet the Trading Post requirements, join the program,and begin using the Trading Post logo on storefronts and inmarketing materials.

Staying Ahead of the Competition

In addition to using all the eBay tools discussed here, thereare a few more things you can do to keep your business viable andyour sales strong. First, be sure to research your marketcontinually so you can find new and exciting products to offer yourcustomers. Otherwise, you could end up desperately trying to sellthose Tickle Me Elmo dolls you bought at closeout prices way aftertheir popularity has waned.

Second, keep an eye on what your competition is up to. Is arival eBay user starting his or her listings at a lower price in aneffort to undercut the number of bidders you get? Or is he or sheoffering new variations (sizes, colors, quantities and so on) onyour tried-and-true product line to lure your customers away? Ifso, you'll have to make some bold moves, too, to compete. Besure to monitor your competition regularly by reviewing othersellers' competing listings to find out how much their productsare selling for.

Finally, pay attention to what's going on in theentertainment world, which tends to be the barometer for what'sin demand. "The media [drives] what's hot on eBay, becausepop culture items are such a huge market," says Collier."Anytime a celebrity makes big news, you'll want to dragout the celebrity merchandise and sell it on eBay. The Today showis also a huge resource. If a celebrity gives an interview or plugsa book, you can be sure there will be a demand for merchandiserelated to that visit."

Collier knows exactly what she's talking about when it comesto pop culture. Her daughter, Susan Dickman, sold quite a few movieposters from the film Pirates of the Caribbean at a tidy profit atthe height of the movie's success. Interestingly, however, themoney started rolling in only after Dickman made a minor yetimportant adjustment in her original eBay listing.

"We discovered when we searched for 'piratesposter' that some were selling for up to $30 when ours wereselling for around $10," Collier explains. "Once wesorted by highest prices first, we noticed that 'Caribbean'was misspelled in the titles. So we changed our eBay listing to thewrong spelling, and the posters flew out the door. Then we boughtmore posters from someone who was still using the correct spelling,and we sold those successfully, too."

This kind of "outside the box" thinking can make you abig success on eBay, too. Good luck, and happy selling!

If the Shoe Fits

When David Hardin, a shoe wholesaler in Mayfield, Kentucky,discovered in 2000 that he needed a way to compensate for anoticeable loss of business from the independent stores that hadbeen slowly disappearing from his client list, he took a bold step:He went retail and started listing shoes on eBay (eBay User ID:shoetime).

Now, four years later, Hardin, 56, not only has a thrivingwholesale business and a 200,000-square-foot warehouse, but he alsohas five eBay apparel businesses and, at press time, was pitchinghis company's services as an eBay Trading Assistant to a largecompany in China. Last year, the gross sales for all his businessescombined were about $750,000-and they're still growing.

"Four years ago, none of us knew how to turn on acomputer," says Hardin's daughter, Shelly Hudson, 33, whois the company's sales and marketing director. "Nowwe're a top eBay seller, and we're always looking to bringnew sites to the market."

To the Rescue

Selling on eBay isn't just a great way to build newbusiness-it can save a failing business, as Lisa Vanasco, 41,discovered when she stepped in to help Ready Medical in Paramount,California, make a last-ditch survival effort.

The 23-year-old medical equipment sales company was close toshutting its doors because it was so out of step with the times.The owner didn't advertise and wasn't online, so hiscompany was being seriously undercut by the competition.

Enter Vanasco, a temp at Ready Medical at the time, who offeredto list some items on eBay. "Everyone laughed, but they let medo it," she says. "The first week I sold more than $5,000of equipment, and we became a Gold PowerSeller soonafter."

The physical location survived, and the company is healthyagain, with 2003 eBay sales of $200,000. "We have a basic Website with a link to our eBay listings," says Vanasco, who hassince become director of eBay Sales at Ready Medical (eBay User ID:mentalgoddess). "There's no point having anything more[sophisticated] than that now." In fact, the eBay experiencehas been so positive that Ready Medical has scrapped plans to buildits own Web site and doesn't advertise anywhere but oneBay.

Eileen Figure Sandlin is an award-winning freelance writerwho writes on a wide range of business topics.

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