When eBay was first founded in 1995, it quickly earned a reputation as an online global yard sale. It was where Internet users could find everything from a vintage Fantastic Four comic book ($1,500) to matchbook covers featuring nine different U.S. Presidents ($14.99) to a half-eaten grilled cheese sandwich that someone claimed looked like the Virgin Mary (it actually sold for $28,000).
But, more recently, eBay has also become known as a small business Mecca. It’s where start-up companies, home-based businesses and physical stores can market their goods or services online to some of the 213 million registered eBay users worldwide -- 90 million in the United States alone. That’s a lot of potential customers. But before a business person gets started selling on eBay, they first have to understand how eBay works.
eBay is the pre-eminent online auction website. It’s where customers can search for a specific floral pattern of Laura Ashley queen-sized sheets or browse through categories such as Home & Garden, Toys & Hobbies, Jewelry & Watches, or Collectibles. Customers submit electronic bids for items they want, after reviewing the details such as payment options and shipping charges. Once a customer places a bid, they have entered into a contract to buy the item if they win the auction. Some auctions have “Buy It Now” options that allow customers to instantly agree to purchase the item for an agreed upon price. eBay also offers scores of fixed-price items from “stores” that people and companies have established on eBay that make shopping there similar to buying on other ecommerce sites.
One of the best ways to understand how eBay works is to register as a customer, which will enable you to buy, bid or sell within a matter of minutes. That’s the advice for would-be sellers from Jim “Griff” Griffith, author of The Official eBay Bible and dean of eBay University, an eBay-sponsored series of courses to help newcomers sell and buy. “You don’t want to sell on eBay until you’ve bought on eBay,” Griffith says. “It’s important to understand how it works from the buyer’s perspective first.”
eBay experts have reached a lot of conclusions about who shops at online auctions. It’s useful to pay attention to some of the basics about the eBay customer before trying to make a business out of selling online.
If you’re planning to set up a business on eBay, the advice to start small is universal. With over $40 billion dollars in gross sales annually and over 100 million products listed for sale or auction at any given time, eBay is a very large pool. You’ll want to enter it one toe at a time to prevent drowning.