Let the Bidding Begin An eBay business could be your entry to the online marketplace. Find out how to get started today.

In 1995, when Pierre Omidyar introduced an online business venuethat was essentially a virtual garage sale with auction pricing, noone knew a retailing revolution was about to occur.

That site became known as eBay, and it's hard to findsomeone today who hasn't at least heard of the popular onlineauction company. On any given day on the site, an estimated 12million new and used items are available, 1.7 million new listingsare posted, and sales totaling some $40 million take place. And allit takes to get your share of that market, which is worth nearly$15 billion annually, is a computer, a modem, a digital camera orscanner, and something to sell.

What's important to understand from the start is that eBayis a sales channel that you can use exclusively or in addition toselling through a retail operation, mail order catalog, independentWeb site or network of direct salespeople. You decide the type ofbusiness you want to have, what type of merchandise you'regoing to sell and how you're going to operate.

To sell on eBay, you'll pay a listing fee to post yourmerchandise and a final value fee (a small percentage of the saleprice) when the item sells. To get a full explanation of eBay fees,check the eBay site.

What Can You Sell oneBay?
Deciding what to sell on eBay can be particularly challengingbecause your options are virtually limitless. Some of the morepopular categories of items are cars, computers, consumerelectronics, books, movies, music, sports items, collectibles,clothing and accessories.

Though eBay is a popular place for the sale of useditems--ranging from high-dollar antiques to pieces of secondhandjunk--it's also a good venue for brand-new, up-to-the-minutemerchandise of all types and in all price ranges. Nona M. Cunane,30, started out selling antiques on eBay in 1998. She did well, butdecided she really wanted to work with a product she enjoyed moreand that was easier to ship. So Cunane launched Stylebug.com, anonline business that specializes in high-end designer clothing forwomen. Her Bear, Delaware, company does about $800,000 per year insales--half of that on eBay.

Adam Ginsberg, 35, was already selling billiard tables in hisretail store in Los Angeles when he auctioned one on eBay on alark. It sold, so he put up another one. Within a year, he hadclosed his retail store and was selling exclusively on eBay underthe name Zbilliards. This year, he predicts his eBay sales willhit $15 million.

David Schultz, 27, learned about eBay when his former boss askedhim to study ways to sell merchandise online. Schultz launchedIEPVisionsin Orlando, Florida, in 2000 to sell baby and children'sfurniture primarily on eBay; he expects 2003 sales to reach between$2.2 million and $2.8 million.

Can you duplicate the success of these BIZ Experiencess? They allsay sure--as long as you choose the right product line and applysound business practices to your operation. As you take the firststep of deciding what to sell on eBay, keep these points inmind:

• The right product: Don't choose a product based onpotential profits alone; be sure it's something you'llenjoy selling.
• Cost and sale price: How much will the item cost you,and how much can you reasonably expect to sell it for?
• Availability: Is the merchandise you need readilyavailable, or will you risk having to deal with supplyproblems?
• Storage: Do you have room to store the merchandise?
• Packing and shipping: Consider what's involved inpacking and shipping the merchandise. Even though the buyertypically pays the shipping costs, think about your labor, time andpotential breakage.
• Seasonal issues: Will the item sell year-round, or willit be subject to seasonal fluctuations?

eBay does place some restrictions on what can be sold on thesite and provides a detailed list of forbidden and questionableitems. Essentially, eBay prohibits the sale of items that areillegal, fraudulent or harmful in any way; that might cause injuryor damage; or that might infringe on someone's trademark orcopyright. Users are responsible for ensuring their items areacceptable. If you do post an item for sale that is prohibited,eBay will notify you and terminate the listing.

If you buy from wholesalers, choose them carefully. You'llsee plenty of ads on the Internet for liquidators, closeoutsources, distributors and wholesalers--but, Schultz points out,keep in mind that everyone else has access to those same resources."You need to find your niche," he says. The best approachis to decide what you're going to sell, then look for a sourcefor it. Of course, you should always deal with reputable supplierswho provide quality merchandise and top-notch service.

How Do You Sell on eBay

eBay is not a one-size-fits-all site--you can choose amongseveral different types of auctions and fixed-priced ways to sellyour merchandise. In a basic eBay auction, you post your item witha starting price (the amount at which bidding starts) and wait forbidders to drive the price up. You are then obligated to sell tothe highest bidder when the auction closes.

You can also set a reserve price, which is a hidden minimumprice that is the lowest amount you're willing to accept.Buyers are not shown what the reserve price is, and if it is notmet, you are not obligated to sell the item.

eBay offers a "Buy It Now" feature that gives biddersthe option to buy your item immediately for a set price. Or you canchoose a fixed-price listing, which simply puts the item up forsale at a set price, with no bidding allowed.

If you have two or more identical items for sale, you can postthem in the same auction by using a Dutch (or multiple-item)auction. In addition, eBay offers restricted-access auctions, whichcan be used for a variety of reasons, but primarily to make it easyfor buyers and sellers to find or avoid adult-only merchandise.

In addition to auctions, you can also set up your own eBaystore, which will allow you to sell auction and fixed-pricemerchandise from your special location on eBay. You'll pay amonthly fee based on the level of store services you want, plusadditional fees for items listed and sold.

The Technical Side ofeBay
eBay has evolved into one of the most user-friendly sites on theInternet. Getting set up as a user is a simple process that you cancomplete in just a few minutes. You'll be required to provideyour name, address, e-mail and telephone number, as well as acredit card number and your checking account information. eBay usesthis information to confirm your identity--which protects theintegrity of its operation--and to collect auction fees. If yourcontact information changes, be sure to notify eBayimmediately.

You must register in order to buy or sell on eBay, but you canbrowse around the site without registering. Before you do anybusiness on eBay, be sure to take some time to get to know thesite. Set aside several hours to get online and browse around,study listings, read the help pages, understand the various toolsand how you can use them, check out the forums, and get comfortablewith how the site works.

Once your business is up and running, you'll probably wantto consider using supplemental auction management software, whichwill save time and money, make you more efficient, and improve thelevel of customer service you offer.

Customer Service the eBay Way

Providing top-notch customer service is an essential element tosuccessful eBay selling. "Everything on eBay is about totalcustomer service," explains Ginsberg. He has three full-timeemployees who answer e-mail and phone calls from his customers.

"You can't just respond to an e-mail two days later orship a week later," says Cunane. Whenever her customers ask aquestion about a garment or sizing, they want an answer fast-and ifthey don't get it, they probably won't bid on the item. Butwhen your customers are happy with the service, they'll likelybuy items from you again. "Make the buyer feel likethey're involved in the whole process," Cunane advises."Answer e-mail quickly, ship within two days of receivingpayment and send them a tracking number."

Schultz agrees. "Customer service is your [top] priority,and it's going to take more time than you think," heexplains. "For every auction you put up, you're probablygoing to get at least two e-mails that have to be answeredpersonally."

If you see a pattern in the questions, consider addressing thoseissues in your listings or on your "About Me" page--afree service eBay offers to sellers to post information aboutthemselves and their operations--or in your eBay store, if you haveone. In addition, Schultz recommends developing standard responsesthat you can cut and paste into e-mails to speed up youranswers.

If you don't stay on top of customer service, you riskgetting negative feedback--and feedback is your eBay reputation. Inevery transaction, the buyer and seller have the opportunity toleave a comment, and you can check a user's feedback ratingbefore you decide whether to do business with that person.

Unfortunately, notes Ginsberg, you will have customers who willthreaten to leave negative feedback if you don't do what theywant--even if they are being unreasonable. Most of the time, hemeets their demands because "the customer is alwaysright."

Life as an eBaySeller
eBay sellers agree that this is an exciting and fun way to dobusiness. Cunane says a huge benefit to selling on eBay is thatyour image depends on how you present yourself and serve yourcustomers--not on how large or small your company is."It's a level playing field," she says.

Start off by buying a few things, then start selling, postingjust one or two auctions at a time until you're comfortablewith how the process works. You'll make mistakes, especially inthe beginning, but if you learn from them, they'll be worth thecost.

Even when you do everything right, not all your auctions will beprofitable. According to Schultz, "It's kind of likeplaying baseball. You don't hit them all."

Be prepared to take a loss on some transactions, especially oninventory that's been sitting around too long. "Wedon't always sell things for a profit," says Cunane."Sometimes we move things for a loss just to get rid ofthem."

Keep in mind that eBay is ever-changing. As the economy cycles,you'll experience changes in pricing and demand. And as moreand more people start operating on eBay, the competition willincrease, and prices may decline slightly (which is great whenyou're buying, but not when you're selling). "Justlike in the offline world, sellers have to adjust and make changesto stay in business and be successful," explains eBay'sKevin Pursglove.

If you plan to make selling on eBay a full-time business, expectto work hard. "Being a seller on eBay is not an easyjob," Pursglove says. "Those first couple of years arevery long hours, very few holidays, very few days off. But mostpeople find the experience very rewarding."

Don't be intimated by the sheer size of the operation, andkeep in mind that eBay has reached less than 4 percent of itspotential market--which means there is plenty of room for you. Sofind your eBay niche, get online and watch your business grow.

Jacquelyn Lynn is a writer whose husband has threatened tonail down items he doesn't want her selling on eBay.