The eBay Home Biz Acid Tes
For those thinking of starting an Internet-based business,
you're lucky to live in an age and country of immense
possibility. You can launch from home with little capital. You
can even test your idea part-time before quitting your day job.
The task of launching will require some imagination, research
and the willingness to adapt to a market, but it doesn't require
nearly the risk business start-ups required in the recent past.
Launching a business used to be a monster task. When I started a
publishing business in the mid-1980s, launching an enterprise
involved raising capital, finding investors, buying equipment,
leasing office space, hiring employees, developing a marketing
plan, creating and implementing sales strategies, developing
fulfillment operations and filling out tons and tons of
paperwork. If you did everything right and ran into a streak of
good luck, you had about a one in four chances for success.
The 1980s were a good time for business start-ups compared to
earlier periods when the prospects for small business success
were dim indeed. There was a point in the early 1970s when
business academics predicted the end of small business. With the
development of chain retailers and with the mass manufacturing
of consumer and industrial goods firmly in the hands of large
corporations, there was little room in the American economy for
a small company.
Then came the niche market. Whether it was gourmet food
products, natural fabric clothes, or special interest magazines,
consumers showed a willingness to buy highly specialized
products that fell into corners too small for large
manufacturing and distribution. Enterprising niche marketers
were able to identify and serve specialized groups of fly
fishers, hot sauce collectors and heirloom-seed gardeners who
were willing to pay a premium for specialized products. An
explosion of small niche companies sprang up to serve these
high-end consumers.
The key to niche marketing was highly specific expertise. In
most cases, proprietors of niche businesses were fellow
enthusiasts who were part of the niche community. These
entrepreneurs knew how to find their customers and knew how to
serve them because they were one of them. Yet these small
companies still had the burden of creating catalogs and building
shipping operations, not to mention investing heavily in direct
mail lists and postage.
The Internet has magnified the niche trend. Suddenly the cost of
reaching the special-interest community has been drastically
reduced. Instead of creating a storefront or direct mail
catalogs, specialized retailers can launch Web stores. There is
more competition in an Internet niche than their was in the
catalog niche, but the cost of competing effectively on the Web
is considerably lower than competing with catalogs and pricey
mailing lists.
Plus, you can do it from home. Plus, you can test the business
before you commit full-time to the idea.
eBay has provided a wonderfully convenient testing ground for
specialized retail businesses. Thousands of small entrepreneurs
are using eBay to find customers and build communities of niche
consumers, all without buying mailing lists that are 98 percent
useless at best. I saw this firsthand over the summer as my
thirteen-year-old son used his babysitting money to buy and sell
video games.
Many of the game retails were entrepreneurs who had Web sites
displaying full lines of goods. They would buy games in
quantity, sell them in eBay auctions, then invite their
customers to their Web sites for additional sales. The cost of
obtaining a potential customer was virtually nil. All they
needed were a few products to sell on eBay and a few more
products at their Web sores.
The beauty of testing a business idea on eBay is you don't even
need the ability to take credit cards. You can ask your
customers to use PayPal (www.paypal.com) to transfer dollars
(without transaction fees) from their checking account to yours.
You can trade in collectible-like used products, buy cut-out
products or purchase new goods in large quantities to sell below
retail price. You can do it from home part-time. If it works,
you're in business. And your odds for succeeding now are better
than even.