For some business owners, tough times call for innovative measures. Glenn King, owner of Sacramento, California-based Exotica Art & Fashion (www .exoticart.org), found a unique way of boosting his company’s bottom line: online auctions.
King has been selling imported art and artifacts since 1992 at trade shows and county fairs. To boost his business, he turned to auction sites in 1999. “[My company’s] eBay sales generated enough revenue to expand my operation without loans,” says King, a former senior manager for companies such as Wal-Mart, Clorox, and Pepsi. “I have always believed eBay was an excellent venue for people who may not qualify for loans to build their respective businesses. The startup costs are minimal. You actually perform market testing without tying up large sums of money, and you can generate revenue.”
Some entrepreneurs can start a business or expand one at online auction sites such as eBay and Yahoo! Auctions–if they have the right kind of business. Keep in mind that most auction sites charge to list items, so it’s a good idea to test the waters carefully. The advantage of auction sites, however, is that they allow you to test for less than most startup methods. At Amazon.com you can even list used items that Amazon sells new–without paying a penny unless your item sells.
Kneko Burney, who runs a consulting group for businesses at In-Stat/MDR in Scottsdale, Arizona, says online auction sites are a good option for small businesses. “They’re a low-risk investment of time,” she says, adding that it’s important to test the market before going all the way. “Consider the buying behavior of the shopper,” says Burney. “Are they looking for hard-to-find items or looking for a deal?” The moral? Test prudently.
From eBay, King branched into auction sites UBid and Yahoo! Auctions and launched his own Website. He has since added imported clothing, which he now wholesales to 20 retail stores. King says that 75% of the wholesale leads were generated from people on eBay asking, “Do you wholesale?” His eBay sales (both direct and indirect) bring in revenues of $80,000 to $90,000 per year–roughly 40% of his business.
King is currently scouting locations for an additional storefront and says he plans to employ young people in the community.