In eBay vernacular, they’re known as “power sellers,” people who make their living off buying and selling items on the Internet behemoth. It’s a unique phenomenon, allowing individual users to create home-based retail shops without the need for business licenses, brick-and-mortar stores or professional advertising.
Instead, sellers rely on a customer-generated rating system, which gives them positive and negative points for each transaction. Keep customers happy, and new customers will notice.
“It’s all based on trust, because without trust, no marketplace would exist – physically or online,” said Hani Durzy, a spokesman for the San Jose-based company. “On eBay, it’s completely virtual. There’s no real store you can go to, so you’re trading on reputation. You’re trading on the history of what you’ve done in the past.”
Sellers who make a minimum of $1,000 a month along with maintaining a customer feedback score of 98 percent or more become eligible for the “power seller” designation after maintaining an average of four monthly auctions for three months.
With that credential and the right marketing plan in hand, these individuals can make six-figure incomes, and a growing number of Americans are turning to this type of trade as a key source of revenue.
“We had been saying that 430,000 Americans reported eBay was a primary or secondary source of income,” said Durzy. “But that was from a January 2003 survey. We just redid it with Nielson, and now it’s 724,000m roughly the population of San Francisco.”
In Gilroy, seller Michelle M., a former engineer who left a successful job in Fresno to marry a man she’d met over the Internet, is one of them. She started her eBay company when the prospect of finding employment in post-bubble San Jose began to dim.
Now a seller of Boyd’s bear collectibles and homemade prayer boxes, Michelle conducts business online under the screen name kalaias. She did not wish to reveal her last name, citing concern for her safety.
Michelle started by reading “Starting an eBay Business for Dummies,” which taught her how to scour yard and estate sales for sellable items. Still, with previous experience in entrepreneurial fields, she knew her best chance of success lay in finding a niche market.
Across the Web, hundreds of services have sprung up claiming to hold the secrets to eBay success, but the Canadian company Terapeak.com is one of the front-runners in this race for information. The site combines research technologies, which allow sellers to track the average value of their goods, the closeness of their competition and the latest trends in their sector, with informational courses on page design and business basics.
Terapeak.com is the brainchild of Anthony and Andrew Sukow, brothers and students at Canada’s University of Victoria who developed the Web site and gained eBay partnership in the process. The site tracks more than 2 million auctions per day and gathers data on 16 top sales categories, including sports, electronics, computers and clothing and offers research subscriptions for $9.95 to $16.95 per month.
It’s valuable information to sellers like Michelle, who buys bears in batches, scooping up as many as 45 in one purchase, then parceling them out for individual sale. EBay transactions – generated by the 114 million users who’ve joined the site since its 1995 debut – account for as much as seven percent of parcel shipping revenues the United States, according to Terapeak.com.
“There have literally been more than 3 billion feedback comments left for sellers on eBay,” said Durzy. “One could look at (this company) as the largest social networking system ever built, and it’s been built one comment at a time.”
Auctions aren’t where the real money is, though. The simple teddy bears Michelle buys go up for auction, drawing people into her eBay store, which stocks valuable and hard-to-find bears. Here, pieces often run into the hundreds of dollars, and prices are set rather than bet on.
Customers attracted through auctions find the stores by adding sellers to their “favorites” lists, while those who know what they’re after can click on “eBay stores,” one of the tabs on the Web site’s main page. Once there, buyers can search stores by category or seller name.
For sellers looking at items to sell in their own eBay businesses, knowing how to buy makes a big difference. Infrequent sellers often misspell the names of products or don’t know the value of what they have, and a patient professional can get bargains that they can translate into major cash.
Michelle keeps in close contact with her accountant to keep track of sales, but eBay relies on sellers to keep their own records and report their own profits to the government, and not everyone who participates on the site is a legitimate businessperson. Subway restaurants announced the end of their Sub Club promotion based on a company executive’s discovery that whole rolls of Sub Club stickers were available for sale on Internet auction sites, and some even attempt to hijack the sites of legitimate businesses.
“I’ve been hacked into once already,” Michelle said. “I had someone try to sell two Harley Davidsons on my site in the middle of the night, using my name and saying they wanted money orders. I happened to catch them after only three or four minutes because I was up and online, but I got completely shut down for it. They had to shut off my store and all of my auctions to track it.”
The measures are unfortunate, but necessary, said Durzy .
“(Some people can become) the victims of spoofing or fishing e-mails, where you get a letter that appears to be from a legitimate company, but asks for personal information,” said Durzy . “It can carry a virus or a Trojan, but most of the time it’s what the customer does. If you fill it out, you’ve just given your password – not knowingly, but very willingly – to a bad guy.”
EBay works continuously with Internet service providers to shut down such false Web sites and spam mailings, said Durzy . Some 90 percent are shut down within 48 hours of being reported, he said.
“The most important thing is to be vigilant and to not respond,” said Durzy .
Still, despite such lurking predators, it’s not a job Michelle has any intention of giving up. Where else could she work, she asks, that would make it possible for her to mow the lawn at two in the afternoon?
