eBay as a Busines Model

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eBay as a Busines Model

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Joel

posts: 865

Sep 06, 2006 9:38 AM ET Quote Report Abuse

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Let`s talk about eBay as a way to start & grow your business. In Step 2 of our 10 Steps to Open For Business we discuss the upside & downside of eBay-preneurship as a business model.

If you`ve started an eBay store or if you`re considering it, tell us what attracts you to eBay as a business model. Or, maybe you considered & dismissed it - how come?

CraigL

posts: 9051

Sep 09, 2006 2:38 AM ET Quote Report Abuse

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We have two product lines we`re attempting to start. One is an artistic product, customized on a per-customer basis. The second is a commodity item, with low costs and high profit margins. There`s almost zero startup capital, and we`re bootstrapping the entire operation, relying on income from each sale to service the next manufacture. That, and we`re having to create a market for both products.

Our immediate problem was how to distribute a product without any investment in leasing store space, counter space, or advertising. Our second problem was how to absolutely control the distribution channel. We wanted a credible way to sell 1 item, then have a delay before selling the next. If we had a craft-fair booth and sold only 1 item, we`d very quickly appear to be going out of business, not starting a new business.

EBay offers a solution to all our problems, but comes with the new problem of appearing to be a "flea market." If we sell 1 item, then wait months before selling the next, so what? Maybe we only could find that one item on rare occasions. It`s up to us to announce that we make the product, or not, depending on how many we can manufacture.

We have a used Kodak camera that holds only 10 pictures and has no external memory. But with those ten images, and learning how to use Paint Shop Pro, we can rival the finest images used by professional marketing firms. Another advantage to eBay is an immediate Web presence with zero outlay for a domain registration, hosting fees, or anything else. We use Village Photo and PhotoBucket for free image hosting. We use Nvu for free HTML development. No costs.

The biggest advantage is free advertising and control over the distribution channel during the startup phase. That control absolutely must provide a credible image of an ongoing, healthy business. No other venue offers those two features at the same time for almost no money down.

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eBay as a Busines Model

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