Tuesday, September 21, 2004
No easy money on eBay
Local online sellers are cashing in, but at a price
By Annie-Laurie Blair Enquirer contributor
About 430,000 people make their living today on eBay, selling everything from leather furniture to baseball cards, SUVs to food processors.
And wouldn't you secretly like to be one of them? Stay home in your jammies, pounding the keyboard, building an outsource-proof business at the hottest e-marketplace in the world?
Wanting to learn the ropes, about 3,000 people recently attended free eBay University training in Greater Cincinnati/Northern Kentucky. At one session in West Chester, 400 retirees, mothers of small children, jobless white-collar types and others packed a hotel conference room to see the slick presentation.
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HOW TO BECOME AN EBAY POWERSELLER
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PowerSellers on eBay are the most successful sellers in terms of product sales and customer satisfaction on eBay.
To qualify, sellers must consistently sell a significant volume of items, maintain a 98 percent positive feedback rating and provide a high level of service to their buyers.
Members have five tiers to aspire to based on their feedback and volume of sales. Buyers are not able to see what PowerSeller levels their sellers are on.
The levels are:
Titanium: $150,000
Platinum: $25,000
Gold: $10,000
Silver: $3,000
Bronze: $1,000
Source: eBay.com
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That session covered eBay selling basics, then tantalized attendees with testimonials from people who gross more than $300,000 a year selling items they've purchased from wholesale warehouses.
Jack Brannelly of Salt Lake City said he doesn't have to box up that couch for shipping to his eBay buyer: the warehouse does it for him, and sticks on Brannelly's return address.
But here's the reality check from Marc Rosenblum of Monfort Heights, an eBay PowerSeller of home goods who puts in 60-hour workweeks:
"There's no teaching hustle," he says. "I take chances all day long. There are no free shots in this business."
And another warning from Chris Gala of Blue Ash, a PowerSeller of sports memorabilia: "I wouldn't encourage anyone to think they can quit their 9-to-5 day job and do eBay to make a living. It's a 15-hour-day, six-days-a-week job."
The two are among only a handful of PowerSellers here, and their words carry weight.
PowerSellers have the top sales numbers and customer satisfaction ratings on eBay. Their ranks - now 90,000 strong - have been growing about 20 percent per year, eBay spokesman Jamie Patricio says.
PowerSeller is a coveted rating, re-evaluated monthly, that comes with a trusted red-and-blue icon next to every item they sell, plus perks such as health care and insurance options, personalized customer support and special offers.
The number of registered eBay users has skyrocketed to 114 million worldwide, and the net revenue from January through June was $1.53 billion, dwarfing the $224.7 million annual revenue just five years ago. EBay primarily makes its money from listings, special features and final value fees collected from registered users.
Overall e-commerce sales for 2004's second quarter were up 23.1 percent over the same 2003 period, while total retail sales in the same quarter rose only 7.8 percent (over last year's similar period), the Commerce Department reported in late August.
Think you have what it takes to ride the e-commerce wagon? You might want to hear the tales of Rosenblum and Gala.
Marc Rosenblum
He leans forward earnestly in the makeshift office of an aging factory's basement, wearing a gray T-shirt, cargo shorts and worn Nikes. "I had 70 people working for me in a trucking dock operation," Rosenblum, 33. "Then we lost the contract. Well, it ended anyway."
That was 18 months ago. He's married, with two kids. "You really never know what God's gonna give up," Rosenblum says.
He went to work for himself. Using his knowledge of the trucking industry, he made contacts that could sell him pallets of retail overstocks, returned and seasonal goods - at a significant discount, of course.
Rosenblum became Midwest Salvage and Surplus, selling those items first at Traders World in Monroe, then on eBay (screen name "Buyingaselling").
He leased the basement of a former bakery in Lower Price Hill. Boxes of tents, treadmills, lighting fixtures, down comforters and saws share space with the table where he uses a digital camera to photograph each item and a packaging table to box things for UPS.
The office contains computers to write the exacting descriptions that go with each item listed on eBay, and to track his business.
![[img]](ebay.jpg)
Marc Rosenblum is the owner of Midwest Salvage and Surplus. He is an eBay Power Seller.
(Enquirer photo/MEGGAN BOOKER)
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Today, Rosenblum is a gold-level eBay PowerSeller, meaning he sells $10,000 or more in merchandise each month on eBay. He has five full- and part-time employees. He ships about 500 items per week.
Rosenblum declines to reveal his profit margin. But it's enough for him to have leased a new space in a North Bend Road shopping plaza near his home, where he is moving his eBay operation. There, he'll also offer $30-and-under home items, including small electrical appliances and gift goods.
Because eBay charges a fee for each listing, and because buyers must pay shipping costs for even inexpensive items, Rosenblum had been losing money on the under-$30 items that came on those bulk pallets. No more. With the store, he's closing a profit loop.
"You've got to have an ability to keep your eye on the money," he says. "That, and thank God."
Chris Gala
Chris Gala (eBay screen name "galasports") is too busy to talk on the phone. The 32-year-old entrepreneur conducts most of an interview via e-mail, talking candidly about his business selling sports cards and autographed memorabilia out of his Blue Ash home.
A platinum-level PowerSeller, Gala sells $25,000 or more in merchandise each month on eBay. Top-priced item on a recent day: a 2004 Randy Moss jersey patch sports card reading "Tools of the Trade," valued at $800. Top bid so far: $182.50.
"I graduated Ohio State with a finance degree in 1994, and it was Wall Street or this," Gala explains. "I picked baseball cards and never turned back."
He launched his business with a $1,000 loan from his dad and sold items for years from a storefront and at trade shows. Gala turned to eBay sales five years ago and today sells up to 10,000 items each month. EBay constitutes 95 percent of his business, with trade shows and other venues making up the rest.
Gala declines to give business profit figures or outline any plan for growth. "I'm not in business to tell people how to make money. I'll write the book in a few years."
He says he finds merchandise at trade shows, and from "people who are desperate for money" and "people who don't want to do the work."
Gala tried buying from wholesalers, and it didn't work. "There is so much competition on eBay, it has become the wholesale market for many goods," he says. "You need to find places where you can buy under eBay price levels, and those places aren't it."
At one time, he had four employees and a warehouse office off Reed Hartman Highway. But, "I found that the added expenses didn't make me any more money in the long run." Today, a girlfriend, family members and friends help out with Gala Sports.
Hardest lesson learned: Spending $100,000 to develop a Web site of his own, which eBay links to.
"No one wants to buy off of a (private) Web site," Gala says. "Customers are addicted to eBay, and that is where all future business will be done.
"No one can compete with eBay."
Learn eBay basics
eBay University, the official eBay training unit, is holding basic and advanced selling classes Saturday, Oct. 2, at the Hyatt Regency Cincinnati, 151 W. Fifth St., downtown. Both classes are from 9 a.m. to 3:30 p.m. and are hosted by Jim Griffith, author of The eBay Bible. Cost is $39 and includes selling materials and coffee but not lunch. To register, call toll-free (781) 821-6734.
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