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The "big-three" auction sites have grown so much in recent years that the resulting competition has become difficult to overcome. The largest and most popular, eBay, has 5 million or more items listed in its online auction house at any one time. The chances of anyone finding your items and buying them at a price profitable to you are slim.

One of the strategies mentioned on the eBay site is to start your bid under $1, no matter how much your product is worth. The idea is to generate interest in your other items, even if that one goes too cheaply. Loss leaders are often used to generate business, but this is not a viable long-term strategy—you have to make a profit to stay in business!

People get excited about turning their unwanted attic and storage items into cash. eBay certainly can do this, but it is not likely to generate sufficient income to be called a business. When the throw-aways are gone, the reality is, “What can I sell now?”

It can be challenging to sell your collectibles for what they’re worth. You can research the value of your item on eBay and other specialty or auction sites, but you’ve still got to be careful about your starting price or the “buy it now” price on eBay. If your item sells within hours after you list, you can be sure you set the price too low. The best strategy is probably to list high and relist several times to get the right price. This will cost a little in fees, but it is well worth the effort if you have potentially valuable items.

Think about the marketing strategy of an auction, and you’ll begin to understand why a seller can find it hard to get a satisfactory price. People use auctions to find “real bargains.” The expectation is that everything will be cheap, and this is exactly the mentality of buyers. You may not get the prices you would like at auction, so you must keep your own costs very low so you can make a little money.

When eBay began, many people developed profitable businesses buying closeouts and overruns at rock-bottom prices. By reselling them on the auction, they were able to make a great deal of money. This has all changed. Even small retailers have enough computer savvy to auction their own goods; they don’t sell to the resellers any more. The big guys like IBM not only sell their own closeouts and refurbished products, but they also have started customizing some of their latest offerings and seeing what they can get with eBay. It’s tough for anyone to break in with all this activity.

Fraud Concerns With the Big Auctions

eBay and some other large sites are also getting bad publicity from what the public sees as rampant fraud. You pay for an article that is never shipped; the seller skips and gets away with your money. There’s very little you can do. Most auctions have mechanisms in place to prevent these things, but crooks usually can find a way around most any defense. Such activities probably are, as the auctions claim, an extremely small part of total sales, but they make good news copy and certainly look bad in the press.

More information on auction fraud and scams can be found at these sites:

ScamBusters (www.scambusters.org/Scambusters43.html) lists some ways both buyers and sellers can become victims of unscrupulous people. Almost half of FTC complaints are related to some form of auction fraud.

Internet Fraud Watch (www.nclnet.org/fraudweek2.htm) reports that 87% of its complaints in the first half of 2002 were auction related.
A Possible Solution—Other Online Auctions

Some of the smaller auction sites specialize in collectibles, antiques, or other niche markets. Find a good one, and your chances of success are much better than becoming lost in the millions of other offerings on the big sites. Here are a few of the more interesting online auctions for you to try:

BidPuppy (www.bidpuppy.com/) is a brand new Website. It’s too early to tell if it will be successful; the format is a lot like eBay. This may be just right for you.

Webmasters typically need a lot of advertising, banners, and perhaps a domain name. You can bid on all these things at Webmasterbids.com (www.webmasterbids.com/). Some services appear to be very inexpensive. Try them and see what happens.

Bid Power (www.bidpower.com/XcAuctionPro.asp) has over 4,500 categories where you can sell. This is a new site and not all information listed is available. However, it does look interesting.
For information on many other auctions of all kinds visit Auction Patrol: www.auctionpatrol.com/index.html.
Finding Products To Sell

Below is a list of some helpful ideas for finding products to sell on auction sites:

Make them yourself or buy from your crafty friends.

Visit yard sales on a regular basis. Many people do this for entertainment on the weekends and find tons of salable treasures.

Auctions themselves are sources for finding resale items. If you find a real deal, buy it and try to sell it somewhere else.

Liquidation.com (www.liquidation.com/) offers many surplus and overstocked items. Buy wholesale lots at auction and resell the individual items.

Their lots are mostly affordable to those really desiring to do business via auctions. The company has received recent favorable reviews in ComputerUser, The Wall Street Journal, Forbes.com, and others.

When this article was written, one item for sale was one lot of Victoria’s Secret clothing including underwear, skirts, and tops that was bid at $.62 each. That probably was an opportunity for someone.

Another lot was 2,300 Salvador Dali prints of his "Man’s Professions" series. They were going for a nickel apiece!

Government Liquidation Items (www.govliquidation.com/) is a site affiliated with Liquidation.com that deals with government surplus items. A recent event was the Internet auction of 24 lots of gas-powered model airplanes. Check this site out; you will be surprised at what is available.
Don't Limit Yourself To Online Auctions

There are many local brick-and-mortar venues to be found near everyone, and these may become a regular source of income for those who wish to work them.

Internet Auction List (www.internetauctionlist.com/Default.asp) names many auctions, online and off. They have a free newsletter that will tell you where and when current offline auctions will be held in your area. Tell them the types of auctions you follow, and you will receive a list each week.

Internet Auction List also posts sources of products on its home page. Search this group for items you can sell.

Online Versions of Live Local Auctions

When offered, these are held before the live local event.
Online bids are closed prior to the actual local event.

Articles are listed in online catalogs and most have pictures. One such online/offline auction specializing in antiques is at www.auctionblocktx.com/onlineauctions.htm.

Norman C. Heckler and Company (www.hecklerauction.com/) conducts absentee auctions of antique glass and bottles. You can bid by phone, mail, or fax.

Several times a week, Teletrade Auctions (www.teletrade.com/) sells certified coins, sports cards, stamps, and fine art. Bids may be made online or via toll-free telephones from anywhere in North America.
Customer Service: Your Key To Success In Any Auction Business

Answer all inquiries immediately.

Accurately state your policies and the costs of shipping.

Describe your products correctly without a lot of hype; you’re trying to sell your items, but you must not misrepresent anything.

Always strive to achieve favorable feedback from your buyers; most of the auction sites have some way to check on sellers and buyers, too. You want no bad reports in your file.

As a seller, you should check on your buyers as well. Some of them can be very difficult, and some are crooks trying to steal your merchandise. Be careful before you ship.

As a seller, you should try to have some way to accept credit cards. One of the best ways to avoid being a scam victim is to always pay with a credit card, so everyone advises buyers to accept credit cards.

PayPal (www.paypal.com/) is a service many auction people use for accepting payment. The buyer and seller must both have a PayPal account, but they are easy to set up and the buyer can authorize payment from a credit card or a bank account.
Perform a Google www.google.com/ search for “credit card payment processing” or “receiving online payments,” and you will find many options for becoming a credit card merchant.

Much more about auctions can be found in the “Auction Sites Can Be Your E-Commerce Store” special article in your May, 2003, MoneyPak.

RESOURCES:

Discussion of payment alternatives to PayPal. The site is very critical of PayPal: www.paypalwarning.com/Alternatives/Default.htm

Vendor of auction seller services like image hosting and auction management: www.vendio.com/

Article by Yank Elliott, a home-based entrepreneur and freelance business writer in Belhaven, North Carolina, USA. His Website is www.furriwhalesworld.com. He is currently a staff writer for IAHBE. Contact Yank at globalbiz@furriwhalesworld.com.