PowerSellers is a distinction made by eBay itself. It happens automatically when sellers reach a certain level in monthly sales and positive feedback on a consistent basis. Sales requirements range from bronze ($1,000/month), then silver ($3,000/month), gold ($10,000/month), platinum ($25,000/month) to titanium ($150,000/month). Feedback has to consistently stay above the 98 percent positive range.

There are now 1.3 million people who claim eBay as either their primary or secondary source of income, according to AC Nielson International, the New York-based market research firm. The PowerSellers are a formidable crowd.  “EBay is a $40 billion dollar a year market,” says Sucharita Mulpuru, a senior analyst from Forrester Research, a Cambridge, Mass. research firm. “ A lot of that business, easily more than 20 percent of it, goes through the PowerSellers.”

For the other 80 percent of sellers on eBay, not to mention those thinking of launching an eBay business, here is some advice on how to make it as a PowerSeller.

Keep your ducks in a row

Remember that there were small businesses long before eBay and there are likely to be small businesses long after eBay. Diversify and make sure that eBay is only one of many channels you use to generate sales of your product or services. “I like to have a lot of legs under my table,” says Tyler Higgins, a platinum PowerSeller of Laverne, Calif., who peddles cosmetics and fragrances from the online auction site. “I like the fact that my business isn’t just eBay. I have a wholesale and retail branch of my business outside of eBay. If one aspect of my business suffers, the other legs hold up the table.”

PowerSellers need to follow the same basic rules that make any business successful. Sell products that you believe in. “Pick a product that you’re passionate about,” advises Barbara Dimoush, a gold PowerSeller from Atlanta who sells party favors and décor. “You need to be able to sell yourself, as well as the product.” But Powersellers advise newcomers to go slow, take baby steps, and don’t expect the business to take off without some glitches.

The customer is always right

On eBay – and the Web in general – customer feedback can make or break your business. Word spreads like wildfire online. People write blogs and, on eBay, they leave customer feedback. Customers often scour that customer feedback before deciding whether to trust a seller or not. In other words: Character counts.

One of the easiest ways to generate positive feedback is to remember that the customer is always right. “Work with your customers. Treat them the same as you would in a traditional retail business,” says Telly Krousaniotakis, a platinum PowerSeller from Baltimore, who sells refurbished computers and printers. “Whether they’re spending thousands of dollars or buying one ten dollar item, treat them with respect. I depend on my repeat customers. Fifty percent come back.”

The most common comment customers leave is about how quickly they received a purchase. “Ship quick,” says Dimoush. “It’s the quickest way to build up your positive feedback. By far, it’s the most popular comment you see on anyone’s feedback. I ship within 24 to 48 hours every time. That’s what customers seem to appreciate most.”

EBay is not for every business

Not every business that hangs its shingle on the eBay site is going to succeed. More importantly, times are changing and the competition is cut throat. “EBay is not what it used to be,” says gold PowerSeller Jerome Coudrier, who sells tiki-themed products from Oahu. “It’s way more competitive and there’s too much cut-rate pricing at the cost of quality. The other thing about eBay is you never own the customer. EBay does. That’s the big downside. The customer may never find you again. They know eBay, and not necessarily you.”

Some businesses are not going to see a growth curve similar to eBay’s own. “It’s not a quick buck,” say Paul and Heather Jones, gold PowerSellers from West Linn, Ore., who sell scrapbooking and card-making supplies. “But it’s a great way to fill the holes in your family budget.”