eBay brings home the bacon

Business: For thousands of users, the Web site is helping them earn a substantial part of their income.

September 09, 2004|By Patrick Kampert | Patrick Kampert,CHICAGO TRIBUNE

When not performing in piano concerts around the country, Michael Faircloth is busy with his second career - selling housewares and kitchen items to thousands of buyers worldwide, without leaving his Bel Air home.

Faircloth, better known to eBay buyers by username thebarringtongarage, began selling housewares and kitchen items online when his concert itinerary slowed down after the Sept. 11 attacks. He needed additional income, and a friend suggested selling some otherwise yard-sale-bound items on eBay.

Skeptically, Faircloth gave it a try. Soon, he began shopping closeouts and clearance sales to increase his inventory.

In three years, he has built a bona fide business. He is a designated power seller for eBay, which means he sells more than $1,000 of merchandise a month. He lists 40 to 60 items a week, but not everything sells. Sometimes he will relist an item two or three times; but he turns a profit on most items, he said.

An eBay survey this summer of its sellers estimates that 430,000 people make a substantial part of their income from eBay. If those numbers were actual employees, that would make eBay the third-largest employer in the United States, right behind McDonald's and Wal-Mart.

"It's a sign of the flexibility of the American economy that people have discovered they can use this medium to conduct their business," said Gary Becker, a Nobel laureate and University of Chicago economics professor.

Essentially, eBay is the world's largest garage sale, where buyers and sellers ogle items old and new.

About 114 million registered users are eBay regulars in 150 countries. At any given time, eBay spokesman Hani Durzy said, there are 25 million listings on eBay, with 3.5 million new ones added every day. In the first quarter this year, $8 billion worth of goods was sold through eBay.

But the company has been around for only nine years, so its growing pains are far from over. For example, one Chicago power seller says he has had problems with hackers occasionally taking over his user name and listings.

EBay also is back in court. In June, it was sued by jewelry giant Tiffany & Co. because many fake Tiffany items allegedly are being sold on the Web site. EBay has won several similar court battles, arguing successfully that the electronic marketplace it has created is so vast that it must rely primarily on its buyers and sellers for self-policing.

Durzy said the company has worked with Tiffany for years in its Vero program, which asks about 7,000 trademark-holders to let eBay know if they come across items they suspect to be fraudulent.

"More than 7,000 companies have taken advantage of this program," Durzy said. "And some of the onus is, frankly, on the buyer. If you know something should go for $2,000 and you see it in a `buy it now' special for $20, you might want to ask a couple questions of the seller. You're going to find some good bargains on eBay but within reason."

Selling on eBay isn't for everybody. Many eBayers say they're putting in more hours than they did in their conventional jobs, and battle the temptation to work day and night. Then there are the deadbeats who refuse to pay and leave slanderous feedback about the sellers on the site.

"There are a lot of strange, intense people out there," said Ron Madoch of Chicago, who says he has even been threatened with violence by customers in his toy business. "Customer service over the Internet can sometimes be like manning an airline ticket counter when all flights have been delayed."

But Madoch and other successful local eBayers say the majority of their experiences in e-commerce are pleasant, and they credit eBay with improving their quality of life.

Madoch and his college buddy Steve Loney left jobs as certified public accountants to form Toynk (www.toynk.com), an electronic toy store whose Elk Grove Village, Ill. warehouse is so jammed with action figures that they're looking for bigger digs for themselves, new partner Mike Boyer and seven other employees.

Although eBay isn't 100 percent of their business anymore, they have no regrets about saying bye-bye to bean-counting. Madoch said he enjoys setting his own hours - even if it means working till 2 a.m.

"I would rather work 80 hours a week for myself than 40 hours for someone else," he said. "I am allergic to cubicles and mornings."

Faircloth has a normal home office, with a broadband Internet connection and a contract with UPS for daily pick-up. He also takes items on consignment for others who are less comfortable with the process of selling online.

Catherine Harvey, under username bearygoodpals, sells Boyd's Bears and country home decor out of her home in Waldorf.

A veteran retailer, Harvey opened an eBay store in November to help offset slower, seasonal business days of her commissioned crafts sales at about 18 brick-and-mortar stores in the Midwest and along the East Coast.

In less than a year, the eBay business has surpassed the sales of her items at any of the chain stores.

Before eBay, Harvey had a separate Web site to sell her merchandise. On a good day, she would get 12 hits and maybe one sale. These days, about 200 to 300 customers browse Harvey's bearygoodpals store at 30-minute increments or more, according to traffic reports from eBay.

After her first three months on eBay, Harvey became a power seller. And the sales continued to increase.

"It really is like the American dream," she said. "Where you can just start small and build with your comfort level."

Freelance writer Anne Lauren Henslee contributed to this article. The Chicago Tribune is a Tribune Publishing newspaper.

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