How to succeed at online auctions

By A.S. Berman
Gannett News Service

Sure, you've known about Internet auctions for years. But it wasn't until you won your first one and experienced that giddy rush that you realized electronic auctions aren't just a fad: They can bring in the bucks.

On eBay alone, there are more than 16 million items on the block at any one time, with 2 million added each day, according to the company. Though casual users account for some of this volume, thousands are making a living auctioning off everything from movie collectibles to computer parts.

Before you decide to embark on a new career as an online auctioneer, however, you will want to do your homework.

Getting started

When technology consultant John Westra first began using eBay in 1998, he did so to help clients sell computer equipment that they wanted to replace.

Last year, he became president of the Online Auction Users Association (www.auctionusers.org), which helps educate buyers and sellers and offers its seal of approval to those sellers who agree to abide by a strict code of ethics.

As in any other business, there are no guarantees, Westra says. But, by following a few simple rules, you can greatly increase your chances for success at the auction block.

Know your market

"If you want to sell something outside your area of expertise, find someone who understands it and who can (get) the items at a good price," Westra says.

If you're going to specialize in printer ink cartridges, for instance, you'll have to know where to buy them at a cost low enough to make a profit, without exceeding the cartridge's retail price in office stores and other outlets.

Also, remember that you're not just competing with other "little" auctioneers. Large corporations like Dell Computer also sell excess inventory through auction sites.

Successful auctioneers like Kevin Murray of Paducah, Ky., stick with types of merchandise — and customers — with which they have experience.

Last year, after selling his comic book store, Murray started selling memorabilia online that's linked to science fiction and fantasy movies and TV shows — items targeted at people similar to those who used to buy his comic books.

Says Murray, "It's common sense, really."

Watch those costs

Frequently, online auctioneers "get so caught up in the excitement" of making a sale, they lose track of their costs, Westra says.

With eBay, for example, in addition to the cost of the product, there are:

• Listing, or "insertion," fees (starting at 30 cents).
• Charges for additional, or larger, photos (dependent on duration of auction).
• Final value fees based on the final sale price of your item (varies).
• Listing upgrade fees for better placement on the site (5 cents to $200).
• PayPal fees for receiving money through the online payment service (2.2 to 2.9 percent plus 30 cents per transaction).

If you're not careful, you can easily come out only a dollar or two ahead on an item.

"That's certainly not enough to form the basis of a business," Westra says.

The online-store concept

EBay launched its eBay Stores service in 2001, which lets users create a simple Web page that lists all of the items they currently have up for auction.

Murray created an eBay "storefront" under the name Entertainment Castle (www.stores.ebay.com/entertainmentcastle), because he "felt it would be better to have (item) categories where customers could search for what they're looking for."

Sales increased 25 percent, he says.

However, a storefront will add $9.95 to $499.95 to your monthly costs, depending on its placement on the eBay site.

"It is very possible for someone to simply list items for sale on the popular auction venues," Westra says, "and never develop a storefront."

Often, the key to attracting bids is experimentation, says Doug Feiring, 36, of Jacksonville, N.C. Feiring, who has used auctions on eBay and Yahoo! to sell comic books since 1999, offers auction tips at his Web site, Auction Insights (www.auctioninsights.com).

"It's important to try different opening bid amounts, auction titles, text and picture styles," Feiring says. "Browse through listings of successful auction sellers and see what makes their auctions seem more attractive than the ones without bids."

Right tools for the job

Finally, there are a variety of software and Web-based tools to help you manage your online auctions.

The new Online SuperSeller ($29.95, www.databecker.com), for instance, offers 47 templates to help you design auction pages but only for eBay. It also includes database software for keeping track of customers, a profit-loss analyzer and the ability to upload all your auction listings at once.

"There are a number of good packages out there," Westra says. What you need "is actually dependent on the type of seller you are."