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eBay IncomeHow ANYONE of Any Age, Location, and/or Background Can Build a Highly Profitable Online Business with eBay
By Cheryl L. Russell
Atlantic Publishing Group, Inc.Copyright © 2006 Atlantic Publishing Group, Inc.
All right reserved.
Chapter OneWelcome? to eBay!
It looked like one more forgettable Saturday garage sale like so many others that day. Lots of clothes with stretched-out necks or worn spots in the knees, the usual supply of pots and pans past their prime, maybe a videotape or two. That's what Joe surmised as he slowed and pulled up to the curb. Was it even worth getting out of the car to look closer?
Deciding that he had room in his trunk for a bit more inventory, Joe, who started his eBay business by selling his used VHS tapes, ambled over to the tables and began to scan them for anything of interest. He spied mostly boring merchandise of little or no value to a seasoned seller who can spot a good-old song-and-dance film ten yards away.
Wandering through the mishmash of wobbly card tables and boards propped up on sawhorses, some things caught Joe's eye. He had no idea what they were, but they looked old; that alone merited a closer investigation. The box contained old cards of some sort or other.
Joe hadn't ever seen anything like these before: turn-of-the-century scenes on finely pressed paperboard. Most of them were dated in the 1890s and were made by a company called Underwood & Underwood. They had images from all overthe world: pyramids in Egypt, old warships, the Vatican, and the Philippine Islands. Each card had two of what appeared to be identical images on it, kind of like seeing double. Now that was odd!
Even though antiques weren't exactly Joe's interest, he had enough gut instinct to suspect when he'd stumbled across something that might be worth obtaining. There was no price on the box, so he asked.
"How much do you want for the cards?" "I don't know; how much will you give me?"
Not wanting to offend the owner, he scrambled to think of a fair price.
"Five dollars?" he offered. "Tell you what. Take both boxes and pay me ten."
Both? Joe hadn't even seen the second box nearby. Nodding his agreement, he paid for the horde and headed home to do some research. There were no vintage videos to be had at that sale, but within days he would be thanking his lucky stars that he stopped.
If you haven't already guessed, Joe (eBay user "whitebears") had stumbled across a cache of mint-condition stereoview cards. Popular in the late 1800s and into the 20th century, the Victorian-era cards were put into a binocular-type holder called a stereoscope that combined the slightly different images, making them three-dimensional, sort of like an early version of Mattel's[R] View-Master[TM] toys that first appeared in the 1940s and are still marketed today.
Joe picks up his story:
"Having researched the cards, I knew I had made a good find, and thought I might get $100 or even $150 for them. I listed them, not knowing I had hit the mother lode of stereoview cards."
The two hundred or so cards were split up into lots, groups of 1 to 30 cards with a similar theme. The first lot listed included 30 cards with pictures from an exposition in Omaha, Nebraska, in the late 1890s. Bidding was fierce in the late hours of the auction, and Joe's eyes grew exponentially as the bids soared. When it was all said and done, that auction alone netted Joe nearly $1,100!
Some of the other cards fetched fifty dollars a piece, and by the time he'd exhausted his supply, Joe was giddy from his foray into the antiques market. He was more than $1,800 richer too. Not bad for a ten-dollar investment!
Joe has since become a PowerSeller, and while he still sells old VHS tapes, this experience helped catapult his diversity; suddenly he'd become a mini-expert at a new type of merchandise. Joe had inadvertently expanded his knowledge, his product line, and his reach to buyers on his favorite marketplace: eBay.
Does the thrill of the hunt before a Saturday of rummage sales and flea markets excite you to heights your spouse just doesn't comprehend? What about new merchandise: Do you see products lying lackluster on a store's clearance shelves, begging you to buy-and resell-them for a profit? Have you always thought someday you'd start your own business, complete with wholesale suppliers, a storefront, and a huge customer base?
If so, then this book is for you!
This book will guide you through the basic principles of starting your own small business, using eBay as your primary selling tool. In order to use this book most effectively, you should already have at least a little experience using eBay, either to browse or to purchase items.
For those who do not have that experience already, your best option is to read through the first three chapters and then take a detour to Appendix A, a step-by-step guide to setting up an eBay account and basic navigation around the site. This information has been separated for the convenience of those readers who have already been browsing or using eBay for purchasing purposes.
In fact, having some experience as a buyer is a great way to feel confident about becoming a seller, so go ahead and buy a few items to add to your collection or buy holiday gifts early this year. And of course, having some feedback to your credit before you begin selling is always a good idea (more about feedback in Chapter 10).
So with that in mind, let's take a brief stroll down memory lane and revisit a time when eBay, and the Internet as we know it, didn't even exist.
Many people have heard the simplistic, and not all-encompassing, story that eBay started as a way for the founder's wife to add to her collection of Pez dispensers. Pierre Omidyar takes this tale in stride. While it does have some basis in truth, his then-girlfriend (later wife) was one of his inspirations for an online auction and one of the first sellers, the entire story is far more interesting and inspiring.
Pierre Omidyar was born in France in 1967 and emigrated to the United States with his family when he was a young boy. He was in junior high school when the first personal computers from companies like Radio Shack came on the market. Immediately, Omidyar had found his life's passion and what would become his life's work: the world of computers. In fact, his fascination with computers was too strong to resist; he frequently skipped physical education classes to sneak off and use a teacher's computer during those early years. Even before finishing college in 1988, Omidyar began an early career in programming and was involved in various businesses that specialized in programming for Macintosh and Apple computers.
In the early 1990s, the Internet was a catch phrase that was spreading like wildfire on the lips of every computer geek in Silicon Valley. The epicenter of all things computer in those days, southern California en masse swooned at the thought of how the Internet was going to change the world and all the money there was to be made doing it!
Omidyar, too, was caught up in the excitement and even had some early Web sites devoted to such onerous subjects as the Ebola virus and a university alumni site. But when it came to making money via the Internet, his ideals about business and the free market inspired him to pursue equality for the common man in purchasing. For instance, he had become wealthy at a young age by buying stocks prior to an IPO (initial public offering) and then benefiting when the stock gained greatly just before the public had a chance to purchase it. This led Omidyar to wish that everybody would have the opportunity to buy low or bid the price up if the demand was there. He'd been lucky with his shortcut to financial success but wanted to even the odds for everyone else.
While Omidyar couldn't do much to change the way the stock markets operate, he could-and did-incorporate his ideals into his own hobby that turned into the world's largest business foray the Internet would know in its early days.
EBay, interestingly enough, was born in a quiet home office with very little fanfare. Over Labor Day weekend in 1995, Omidyar wrote the basic programming that would operate a simple auction site and named it AuctionWeb. The site was hosted on his Web site, ebay.com, and shared space with the previously mentioned Ebola virus information, as well as a couple of pages used by his fiancée and the alumni Web site.
The auction format was simplistic and far from the neat and slick eBay most people think of today. The block lettering and grey background was rather boring, frankly, and there were only a few options: list an item, bid on an item, and view an item. It was plain-Jane functionality at its best. However, prettiness aside, users immediately fancied the new way to buy and sell.
The first months of AuctionWeb weren't blockbusters by today's standards, but by posting information about his new site on other Web sites and Usenet newsgroups (some of the earliest sites on the Internet), business slowly picked up. Within four months, thousands of auctions had been set up on AuctionWeb, and the buzz about this new marketplace was spreading as quickly as the Internet itself.
Not content to merely provide a forum for buyers and sellers to do business, Omidyar made sure all users were aware of the ethical way he wished the site's users to treat each other. He posted a list of desired behaviors, such as being courteous and settling disputes politely. Thus were born the Community Values that today are still prominently featured in eBay's pages and discussion boards.
Initially, AuctionWeb charged no fees to the users, but when Omidyar's Internet service provider started complaining about his site's traffic, they forced him to bump up to a business account costing $250 per month. Hobby or not, that was a far cry from the $30 he had been spending, so the idea was born to charge just the sellers, not the buyers, starting in February 1996. Users paid final-value fees through mail, sending checks, paper bills, or even coins taped together. Right from the start, the collected fees covered the new expenses and even turned a small profit.
Omidyar knew he was on to something, and by the end of summer of 1996, he quit his full-time job and devoted himself entirely to turning his once-hobby into a thriving business. Others who came on board, including Jeff Skoll, helped shape the site in its early years. One of Skoll's most notable contributions was convincing Omidyar to drop the other Web pages that were existent on ebay.com and stick just to auctions. It was difficult, but Omidyar gave in and removed his prized Ebola virus page, along with the other non-auction pages, from the site. From then on, AuctionWeb became known by the handle eBay!
By the end of 1996, eBay had almost 10,000 registrants and had sold over one million items. In 1998 eBay became a public company with its stock traded on the NASDAQ. Estimates in late 2005 put the number of worldwide users at 135 million who were expected to buy and sell more than forty billion dollars through eBay in 2005.
A recent study indicated that nearly three-quarters of a million people in the United States rely on eBay for some or all of their income. While eBay has branched out to foreign countries, the United States is its most seasoned group of users and an important piece of its selling "pie." The gamut of eBay sellers runs from stay-at-home parents wanting to pad the family's budget to retired folks who know a thing or two about antiques. College students unload their old textbooks, and computer junkies hawk their outdated equipment. But the fastest-growing segment of eBay sellers seems to be those who are making it into a real business, steadily earning at least a portion of their necessary income without ever leaving the comfort of their homes.
Becoming the Icon
EBay has helped countless people realize their dream of owning a business and being their own boss. Although it may not be like the business their fathers' generation opened-and certainly is far different than their grandfathers' generation could have ever imagined-it is still a business, nonetheless. But why is this type of business so wildly popular?
Selling on eBay can be done with little or no overhead, inventory, and space. You don't have to rent an office, hire employees, or encounter many of the other traditional business headaches. Instead, there can be as little as a computer screen and a post office box, at least initially. Primarily, there is freedom, prestige, and a sense of accomplishment every bit as strong as those who operate more traditional (often referred to as brick-and-mortar) businesses.
Sure, there are still the same responsibilities as any other business. You must have a source of merchandise to sell (a product stream) and you must find ways to have a constant income (by generating sales). And despite popular myth, selling online doesn't release you from following all the laws that regulate businesses, such as reporting income and paying the appropriate taxes.
But if you were going to go into business anyway, the Internet-and eBay specifically-has made it entirely possible for you to make yourself a big business with relatively little investment compared to traditional methods of breaking into this world. There will still be investment needed on your part: a current computer, some basic software, a reliable Internet connection, and some basic office supplies, to begin with. But compared to the tens of thousands of dollars required to start a traditional business, the few thousand you'll need to start this one are attainable to most people today.
Ordinary people aren't the only ones that are clued in to the huge potential of eBay. Even big businesses are using the power of eBay to market their products. Some companies use eBay to unload surplus stock or launch new products, while others use eBay to increase their business, while not ever selling a single item.
One such company is the Golden Palace Casino, an online-only casino that has made itself a household name by purchasing outrageous items on eBay, such as the vehicle once owned by Pope Benedict XV. Even though they pay mightily for some of these offbeat items, the publicity they get by doing so is worth more than any ad campaign they could have bought for the same number of dollars. By standing out from the crowd of online gambling sites, they have managed to use eBay in a way that even Pierre Odimyar probably never imagined!
Other imaginative ways to do business and make money have cropped up with the help of, or because of, the success of eBay. EBay has helped shape the way we donate to charity, buy vehicles, rent apartments, and even hire employees. Countless Web sites have sprung to life in the past decade that take these everyday tasks to new levels.
The World's Online Marketplace, as eBay's motto proclaims, also cares about the world in which it operates. Charity auctions are highlights of the Giving Works site, which is easily accessed from eBay's main page. Current events have inspired waves of charity auctions, and eBay makes it easy to access these special auctions, often right at the top of the home page.
In 1998, before going public with its stock offering, eBay set aside more than 100,000 shares of stock to be put into the eBay Foundation, a charitable fund that to date has donated more than $8 million to nonprofit charitable organizations all over the world.
Purchasing a vehicle will never be the same after eBay. While there are many sites on the Internet that specialize in vehicle sales, one of the first places that it happened was on eBay. Back when there was no category for listing a vehicle for sale, trend-setting sellers listed them under the category where toy cars were sold! EBay eventually clued in and created eBay Motors, which sells many motorized vehicles other than automobiles, and now accounts for a tidy share of their sales.
Looking for a new apartment? Rent.com is your answer. This site can even help match you with potential roommates and moving services. Half.com boasts one of the largest fixed-price purchasing sites on the Internet. While these two sites are eBay sites, they started out as eBay's competition-capitalizing on the amazing advances in online selling and servicing pioneered by their future parent company.
While it is neither created nor owned by eBay, elance.com takes the auctioning of services to new heights. It's actually a reverse-auction, wherein the company that is seeking to have work done will post its requirements on elance.com and the contractors (who are Elance members) bid on the opportunity to perform the service. Elance.com's pre-screened workforce specializes in everything from freelance writing to graphic design, software development, and engineering.
Using a strategy common to many large corporations, eBay has acquired other companies that provide services that are complementary to their own. This has given eBay an extremely broad range of appeal for sellers, buyers, and investors alike. In addition to owning all or a stake in many foreign auction sites, eBay acquired PayPal in 2002 to help facilitate auction payments. The software is so seamlessly integrated with eBay that it's almost silly to use anything else!
Excerpted from eBay Income by Cheryl L. Russell Copyright © 2006 by Atlantic Publishing Group, Inc.. Excerpted by permission.
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