eBay has grown to be one of the Internet’s biggest cash cows. Stay-at-home entrepreneurs are making a living off glorified garage sales, and now they’re sharing their eBay lessons with you in this exclusive excerpt from Secrets of the eBay Millionaires by Greg Holden
Drew Friedman doesn’t sell as many items as other PowerSellers. In fact, he’s happy if he is able to complete several transactions a month in one of his product lines. This is in dramatic contrast to most PowerSellers, who need to sell anywhere between 50 and 500 things each month just to make $1,000 or more in gross sales, which is the bare minimum needed to keep the magic PowerSeller icon next to their User ID.
And yet, Drew is envied and respected by practically all of the sellers who know him. When they hear about what he sells and how he sells it, they want to do the same. That’s because he succeeds not by volume sales but by profit margin. He is able to connect with loyal customers who have lots of disposable income. He knows just what his buyers want, and he is able to provide it for them through his eBay Store, White Mountain Trading Company.
Drew isn’t a member of the “high disposable income crowd” he targets. But over the years, by being alert to new opportunities and exploring the market, he identified not only this valuable niche market but a product that would appeal to its members: high-priced, handcrafted, limited-edition fountain pens.
“This one sells for about $7,500,” he said casually as he produced a pen from his pants pocket. I was almost afraid to hold on to something so valuable for fear that I would drop it. The pen was very heavy and embedded with numerous pave diamonds. As I admired the instrument, Drew described its many attributes, and I began to sense how much he loved to talk about his merchandise: this part was enamel, that part was gold, that part rhodium, a white metal related to platinum.
A look at Drew’s completed auctions on eBay indicates how he is able to maintain his PowerSeller status. He sells his share of watches and fine gifts for up to, say, $80. But as soon as he sells one pen for $3,995, he’s made his Silver PowerSeller quota for that month. Over $10,000 in gross sales per month and he maintains his Gold PowerSeller status.
How is he able to consistently sell such high-priced merchandise on eBay? First of all, he knows his customers: he has identified them, he knows what they are looking for, and he has learned how to connect with their needs and tastes.
“My customers are professionals like lawyers, gynecologists, plastic surgeons, and dentists,” he says. “They like to exhibit their ‘jewelry for men’ especially among professional peers. When they get together at their annual conventions, they compare their pens.” […]
Drew doesn’t sell just any kind of pen. He sells rollerball and fountain pens that are manufactured in limited edition quantities using high-quality materials. Pen manufacturers like Montblanc have known for years that pens, like works of art, can actually gain value over time if they are produced in limited, numbered editions […]
At age 45, Drew Friedman has been selling on eBay for nearly six years. Making sales still excites him. So does being his own boss. “I walked away from my job after six weeks. Six years later it’s still dynamic, it’s still exciting.”
For his first six months as a self-employed eBay seller, he maintained an office outside of his Baltimore-area home. But then he moved his office into his house. “I get up early, try to clear my desk by 7 a.m. when my son wakes up. He sees me working at my computer at home all the time. He says, ‘I don’t want to go to preschool, I want to stay in my pajamas, like dad.’”
DOING EBAY BIGGER, BETTER, FASTER
“I have always been a sort of an entrepreneur,” says Kevin Harmon. “In college, at the University of Illinois at Champaign-Urbana, I had a T-shirt business. That’s how I paid for college. I had a coupon business for a while. I have owned several types of entities — some worked, and some didn’t.”
eBay definitely seems to be working for Harmon. Since he first bought a purse as a Christmas present for his wife on eBay in 2002, he has managed to build up, in less than three years, a feedback rating of more than 58,000. To build up that many sales and positive feedbacks that quickly, he has managed to sell an average of 52 items every day. At any time, he has as many as 381,000 items for sale in his eBay Store. How did he ramp up so quickly, and how does he keep his sales level constant?
“I got started on eBay because I didn’t want to pay full price for an expensive purse for my wife for Christmas 2002,” Harmon recalls. “I joined up, and I found a really nice purse for two-thirds the price it would cost in a store. I thought ‘Huh, that’s interesting. Maybe there’s something to eBay.’ So I sold some things out of my closet, to see how the e-mails work and how My eBay works.” […]
“Once I got the hang of selling, I looked for things I knew well enough that I could resell them. I am a movie buff, so I decided to try to find DVD and VHS movies. I went to local flea markets, buying stuff I thought I could resell — DVDs, wacky stuff. That got me off the ground. There are 15 flea markets within 15 miles of Charlotte, North Carolina, so that kept me going for a while. But I needed to find larger suppliers and variety. That’s the problem with eBay: It’s two miles wide and two inches deep. You need a solid breadth of product to sell well on eBay. There are at least 45,000 DVDs and 200,000 CDs, so I knew there were lots to sell, if I could find them. I started a big search and scoured the Internet to find suppliers.”
Another secret to Kevin’s success: the realization that people don’t like to click on link after link on eBay when they’re shopping. They want to find a single store that has thousands of different items for sale rather than going through thousands of stores, each with a handful of items. As you can see from his eBay Store — which has the easy-to-remember name Inflatable Madness LLC — he carries as many as 38,000 DVDs and around 100,000 CDs […]
The key to such growth is having lots of merchandise to sell, and that, of course, depends on finding the right suppliers. “Through our distributors we can offer as many as 300,000 items,” says Harmon. “There’s a whole lot we could offer; it’s just a matter of finding what sells on eBay.” […]
Looking ahead, Kevin Harmon strikes a cautious note. He indicates that in the future, he isn’t going to expand his business as quickly as he did over the past few years.
“I would advise new sellers to not even bother to start an eBay business if you can’t find things to sell on eBay. Sourcing the product is the most important thing you can do on eBay. If you can find something that is rare and unique, there are so many things out there that you can sell. You have a big personal advantage: Before you buy on eBay, research it. I never buy anything unless I research it first on eBay. I still find new suppliers today. It’s a consistent, constant search on my end, because DVDs are a massively popular product. eBay provides you with a unique opportunity to find out what something sells for, nationwide. So always do your research.”
FRANCHISING EBAY THE SMART WAY
Ron Bratt went to New Orleans in 2004, but not to attend a football game or party on Bourbon Street. He went there looking for a new entrepreneurial business opportunity — which he subsequently found at eBay’s annual convention, eBay Live. Bratt and his partner, Jeff Shiller, don’t have an entrepreneurial or even a business background. They were both trained as real estate lawyers, and Bratt had a position at Catholic University in Washington, D.C. But Bratt came away inspired by eBay and determined to forge a new type of eBay business — one that uses innovative new ways to reach shoppers around the world.
“There was a certain level of excitement being around all those ‘pajama millionaires,’” he recalls. “They all came out of their basements and were there to share their secrets with everyone. At the Toys Round Table, there was so much sharing and collaboration. Flying back from New Orleans, I thought, we should build an eBay in Howard County.”
eBay is known for having a worldwide reach. After all, as the auction site’s representatives continually claim, selling on eBay puts your merchandise before the eyes of more than 40 million members around the globe. But when you’re just starting out, you often receive only one bid for the items you sell: you set a starting bid, and someone bids at the last minute. You sell the item for the minimum you wanted, but you wonder where all the bidders are. You wish some of those overseas bidders would start a bidding war over those items you’ve spent so much time putting up for sale. Auction Safari has created a new model for gaining instant exposure for new sellers. It boils down to the principle that impressed Ron Bratt in New Orleans: collaboration.
Bratt and Shiller have started a new form of eBay business, which they call an eBay brokerage — a business that’s run like a real estate office, where many individual sellers share facilities and are able to work collaboratively while each selling in his or her own sales niche.
First, Bratt and Shiller became PowerSellers in their own right, learning the ins and outs of selling toys and DVDs on eBay, so they could teach others how to do the same. Then, they purchased a warehouse in Columbia, MD and invested in expensive photography equipment.
Once they had a physical space, Bratt and Shiller began interviewing potential brokers — people who are eager to sell on eBay and want to start a new business, but who need a helping hand. At this writing, as many as 40 brokers share space in the warehouse. They pay a fee to join Auction Safari, but the company helps them find merchandise to sell, instructs them on how to present the merchandise, and provides them with employees who help pack and ship it.
“Our business is all about increasing scalability by working through our brokerage,” says Ron. “You can work out of your home, but you reach a point where there are only so many e-mails you can send and packages you can stuff each day.”
THEY SOLD WHAT! ON eBAY?
- No joshin’, some of the weird items sold on eBay include a vintage outhouse, dogshit on a stick, a woman’s pubic hair, 100-year-old grape juice and AC/DC’s old tour bus
- A Belgian woman sold her husband on eBay — but only four hours of him. She put him up for hire to the highest bidder, with only one rule: absolutely no sex
- Nothing like food imitating celebrities. The most recent oddity was a Frosted Flake shaped like Elvis’s head, selling for $6.50
- A Kansas resident sold his imaginary friend Silly Billy for $5.50. The man said “I try and get work done around the house and he just wants to play Battleship”
- An angry divorced dude listed his ex-wife’s wedding dress for auction, even including a rant on how awful she was. He sold it for $3,850
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