Selling $200 worth of skateboard equipment via eBay used to be a good day for TGM Skateboards, despite General Manager Chuck Bonten’s leeriness about using the Web-based auction service in 2000.
Good thing he warmed up to it; TGM averages between $4,000 and $5,000 in daily eBay revenue by selling between 100 and 150 skateboard decks a day.
Bonten said his small St. Clair Shores business can send its custom-made and brand-name skateboard products to customers who don’t otherwise have access to the cool wares at affordable prices.
Were it not for eBay, he said, TGM would depend on all of its revenue coming from its St. Clair Shores storefront.
“I didn’t want to sell as competitively as you need to on eBay when I first looked at it,” Bonten said. “I put it on the back burner at first and after keeping an eye on it, decided to try it. I’m glad we did, because our eBay business has grown tremendously.”
TGM Skateboards is part of a growing number of small businesses with a wealth of entrepreneurial spirit and a lack of capital using eBay to make money.
Everything from salt shakers to full-size trucks are being sold by local eBayers. At any given moment, there are roughly 130,000 items listed in metro Detroit for sale. EBay is an electronic marketplace owned and operated by eBay Inc. (Nasdaq: EBAY) in San Jose, Calif.
The reasons vary as to why individuals and small businesses use eBay: As a regular business; to supplement “day job” income; to sell excess equipment; and as a marketing tool.
Whatever the reason, it works. Ebay estimates about 430,000 small businesses and individuals nationally make a living through eBay.
It’s such a useful tool that the Detroit Regional Chamber plans to host “Setting Up Shop Online: How to Get Started Doing Business on eBay,” a May 18 event targeted at small businesses and focused on the how and why of selling on eBay.
Grosse Pointe Farms-based Auction Canyon Inc. has sold more than 56,000 items on eBay since 1999. It’s a full-time business for Joe Craparotta and his partners who operate out of a former post office.
The company first started selling trading cards in 1999 after a failed family business left the company with about 30 million excess cards, Craparotta said.
Since then, the company has expanded into selling various media including CDs, video games and movies, which Craparotta said he gets from several sources including liquidators. “We’ve been able to operate out of one warehouse and hit the global market, in particular areas that don’t have access to some of our products,” Craparotta said.
Auction Canyon also has developed proprietary software called Commerce Canyon that helps other eBay sellers track inventory. Craparotta declined to discuss total sales figures from the business.
Like Auction Canyon, businesses are popping up with services to offer eBay sellers.
Carson City, Nevada-based QuikDrop International Inc., for example, said in early April that it has received state approval to begin selling franchises in Michigan. QuikDrop allows customers to drop off items worth $50 or more, which are then listed, sold and shipped on eBay by QuikDrop for a cut of the final selling price.
Jack Reynolds, co-founder of QuikDrop, said the company has contracts to open 20 stores in Southeast Michigan during the next three years.
He said to expect three or four to open by December.
“Southeast Michigan is a very hot area for eBay sellers,” he said. “There are a lot of single-family homes with garages full of stuff ready to be sold. It’s perfect for our kind of business.”
The lure to eBay is simple: It’s easy and reaches a huge market – a garage sale for the world.
Here are the basic steps: Register with eBay as a seller by providing some basic personal information and credit card or checking account information. The credit card/checking account is used to pay listing fees.
A few clicks later, the user is able to provide a brief description of products, upload any pictures to accompany the description and determine details such as price and shipping costs.
Other than typing in the description, everything else is done by clicking on boxes; there’s no need to know how to design Web pages or programming codes. A typical listing takes between 10 minutes and 15 minutes.
Fees are automatically taken out of the account specified on a monthly basis. Listing fees are based on the price the item is listed at, starting at 30 cents for an item listed up to $1 with one picture. EBay also charges a percentage of the sale price for items that sell.
Third-party software is available to help sellers list their items or keep track of inventory and process orders. EBay also offers high-volume sellers the opportunity to operate a virtual store.
“Businesses already on eBay know that it’s the easiest way to start a company,” said Jordan Glazier, general manager of eBay’s business and industrial sales.
But, he said, it is a lot more than simply listing an item.
“It still takes the same kind of concentration, focus, smarts and ability to market not only your self but your products as well,” he said. “You’re not buying a winning lottery ticket. Successful eBay-based businesses are dedicated, hardworking entrepreneurs.”
Glazier said successful eBayers know their products inside and out and have strong sources of supply.
But there can be some downsides to using eBay.
Consider Troy-based SecondWind PCs.
The company, which sells used computer equipment, sold $2.5 million worth of product via eBay in 2003.
Scott Agge, vice president of SecondWind, said the costs were too high and the company has scaled back its eBay efforts by laying off five people who handled strictly eBay sales and service.
About 10 percent of the final sale price went toward various fees, Agge said.
SecondWind PCs, a subsidiary of Troy-based O/E Systems Inc., now sells about 10 percent of the amount it did just one year ago and he expects revenue of about $500,000 this year from eBay.
“The amount of time to handle shipping, handling and all of the e-mail from buyers got to be ridiculous,” Agge said.
That isn’t to say eBay was a total mistake for SecondWind PCs.
Agge said the company benefited by having an outlet for an unusually high amount of excess equipment to sell in 2003.
It also helped get the SecondWind PCs name out there, he said, even driving some eBayers to skip the middleman and go straight to his company.
That’s exactly the kind of exposure Maggie VanAssche, a Milford-based artist, hopes to get through her use of eBay.
Her paintings, sold under her art name of Mentranced, have listed for between $20 and $200.
She’s sold only a few paintings, she said.
Hardly enough to make a living, but eBay provides a way for her to supplement her regular income and, more importantly, get her name publicized.
For example, she said, she sold two paintings to a woman in Downers Grove, Ill., who said she plans to put them in her office.
“Who knows who else will see them and ask her where she bought them from?” VanAssche said.