Starting a Business

eBay Entrepreneurs

Written by Stefan Martinovic for Gaebler Ventures

Are internet auctions your ticket to starting a profitable new business or boosting revenues for your existing business? We think the recent eBay entrepreneurs phenomenon holds many lessons for all entrepreneurs.

Since the internet boom of the 1990s, many startups and small companies have taken advantage of the integration of worldwide digital communication and transformed themselves into household names.

Through proving unique services to customers via the medium of cyberspace, many internet-based businesses have comfortably assimilated themselves into the mainstream of world culture.

Perhaps one of the greatest examples of this is the internet auction site eBay. Though recent years have seen the rise and fall of many different auction sites, eBay remains firmly rooted in the steadfast base of online consumerism.

What makes eBay unique is that it provides opportunities for individuals and small businesses to trade goods at real-time market price around the globe through a trusted intermediary. The opportunities that eBay provides to entrepreneurs are seemingly limitless, and many savvy investors reaped many of the benefits of online auction-based selling, such as those detailed below, in order to develop their businesses.

• eBay can provide instant product exposure and global marketing at low cost for new products. Many entrepreneurs who have developed new products yet do not have the financial resources to launch large-scale marketing campaigns can find in eBay a cost-effective marketing and distribution mechanism.
• Internet auction sites allow for an entrepreneur to reach a global audience who may be in the market for a new product that is being brought to market.
• The extent of marketing detail and expense is left entirely up to the seller in an auction-based format, which provides the opportunity for producers of lesser known products to market their products alongside much larger companies for a nominal cost. This leveling of the playing field can provide entrepreneurial sellers a great advantage over other global marketing and distribution strategies and is much more cost effective.

Marketing products globally via internet auctions is obviously beneficial as it allows sellers to reach a much larger audience who might be interested in making a purchase. However, in addition to the ability to reach a wider consumer base, online auction selling also allows sellers to take advantage of international pricing and demand disparities.

Many products that are readily available in the United States at a moderate price, such as automobiles, sporting goods, and certain clothing suffers from large markups abroad due to international tariffs, exchange rate variances and supply shortages.

Sellers either wishing to bring new products to market or act as distributors can use pricing data in order to target their products to markets where profit margins may be much higher than the local market.

What really sets eBay and other online auction sites apart is the ease of use and integration of payment and shipping mechanisms that make it convenient for buyers and sellers to trade efficiently. The infrastructure of online auctions has become much more streamlined in recent years and has boosted the reliability of auction sites to where it rivals most other e-commerce applications.

Partnerships with the US Postal Service and the recent purchase of PayPal stand to serve as a testament to the bolstering of legitimacy and reliability that online auction sites have undergone in recent years.

As a result, their popularity has grown immensely, and as membership to the online auction community continues to grow, this online marketing and sales tool continues to showcase itself as a new world of opportunity for entrepreneurs and investors alike.

Stefan Martinovic has an extensive body of work across the financial services, manufacturing, and retail industries. He is currently pursuing an MBA in Management and Entrepreneurship at The College of William & Mary.

Share this article

Additional Resources for Entrepreneurs

Lists of Venture Capital and Private Equity Firms

Franchise Opportunities

Contributors

Business Glossary