If you want to start your own online business, there are lots of ways to go without bothering with eBay. So why work with the online auctions giant?
Easy. Jordan Insley, one such entrepreneur likens online to commercial real estate: "You could could be be a small mom-and-pop working on a back street and hoping someone hears about you, or you could invest in a venue like Times Square." Sure, you'll pay more to get a flashy, high-traffic address, but, by Insley's calculations, you'll wind up spending the money you save by not going to eBay on advertising and other marketing costs to try to draw the same traffic.
Costs that Pay OffYou can do the math: eBay takes about 9 percent of every transaction. In addition, there are PayPal fees and, of course shipping. You may also want to promote your eBay business with paid advertising and/or social media outreach on Facebook and Twitter that might be nominally free but will require man-hours that you either put in yourself or pay someone else to do.
For those who decide eBay is for them, the upside can be huge. Insley's business, Quick Ship Electronics, was based out of a garage three years ago, but now has 35 full-time employees. Other frequently mentioned eBay entrepreneurs include Linda Lightman, a consignment expert whose Linda's Stuff handles about 1 percent of all the world's consignment business and has 85 full-time employees, and Dan Glasure, a Florida man who has made millions selling model trains on eBay under the Dan's Train Depot moniker.
Leveraging Past ExperienceSuch businesspeople have calculated that even in the age of Facebook, eBay is still the Web's Times Square. But not every eBay entrepreneur wants to be a millionaire. Some want a steady source of income and flexibility and are happy making a five-figure income. However, it's misleading to say that anyone can jump in and start a big business on eBay. Successful entrepreneurs on the platform have often built up their business and expertise elsewhere before moving on to eBay. Before you tap in to the demand-side power of eBay, you need to figure out the supply side of your business.
In Insley's case, that seems to have been something of a happy accident. In 2005, he was "partying his life away" in New York City by his own admission when he decided to step into a Circuit City store. There, he found open-box deals that he realized he could sell online at a tidy profit. However, before he started dealing in consumer electronics, Insley had been a hardcore baseball card collector and seller, so he knew the ins and outs of that business. Revelations about widespread steroid use in Major League Baseball crashed that market, though, and soon he was looking for another industry to apply his expertise.
Another seller, Kristina Bauer had been in the consignment business for several years, building up a solid client base, before she set up an eBay storefront, Gramercy Grl. Bauer, who lives in New York City, doesn't have a huge business, but she says she only puts in about 20 hours a week because she's raising her young daughter. But thanks to the growth of mobile, Bauer says she doesn't have to be chained to her computer all day. "You can be out relisting items on the go," she says.
Finding a Niche
That flexibility was a big draw to Brandi Tolley, an Illinois-based entrepreneur who was motivated less by riches than the necessity of spending time with her son, who was diagnosed with autism. Tolley first heard about eBay in 2000, when her then-boss (Tolley had a government job) paid her to track down some Wheaties bobble-head dolls for his collection. Tolley started spending a lot of time on the site and selling things around her house for extra income. "I totally winged it," she says. "It was one of those trial-and-error things. I was able to start selling, and it was surprisingly easy. I had no college degree or business background."
In 2004, Tolley got wind of a close-out deal on shirts for big and tall men. "I sold tons of them for a lot of money and started getting emails from all over the world." Having found her niche, Tolley opened Buy Big From Brandi, an eBay storefront. Now, she still has no employees and uses her 1,000 square-foot basement to store her merchandise. Tolley says she's gotten offers to sell the business and could have probably grown it to 10 times the size, but she's content with her five-figure income and she loves running her business from her phone. "I do very little from a computer these days," she says. "[eBay has] made it very, very easy."
Of course, there are moments when running an eBay business isn't so easy. Each of the entrepreneurs occasionally deal with a hard-to-please customer. "As with any customer service business there's always one or two," Bauer says. Insley echoes that sentiment. But that's one of the advantages of being an online operation. Insley operates out of a 30,000 square-foot warehouse in Woodinville, Wash., but doesn't allow on-site pickups to avoid all in-person interactions. Says Insley: "No one knows where our facilities are."
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