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The eBay Revolution Hit Home Area retailers jump aboard the online auction bandwagon	Business New Haven 9/6/2004
By: Lisa Micali

With close to 114 million registered users buying and selling millions of items across thousands of categories, people flock to eBay for the practical, the unique, and the interesting. And, to make money.

But back in 1995 when eBay founder Pierre Omidyar created an online auction platform for Pez collectors, he never imagined the birth of an international trading community that would transcend language barriers and international trade agreements. What eBay did was to give ordinary people and small businesses the power to reach more than 150 countries - both quickly and inexpensively - with the click of a mouse.

In the New Haven area there's no shortage of individuals and businesses using eBay to bolster their sales revenue. At any given time, more than 45,000 "new" items are listed for sale (with thousands more "antique" and "vintage" items). For some local sellers, though, eBay is more than just an additional lifeline, but a life-support system.

It's no longer just a place for collectibles, beanies and Pez dispensers.

After president and CEO Meg Whitman took the helm in 1998, she focused on transforming the company from a flea market-style auction house to a more sophisticated site selling millions of dollars of big- (and small-) ticket items like new and used computer and networking goods, medical equipment, business and industrial supplies, real estate, even automobiles - vintage as well as new.

To support this new sales channel, it launched specialty marketplaces such as eBay Motors, which provides car dealers with a dedicated platform complete with end-to-end services such as financing, inspections, escrow, auto insurance, vehicle shipping, title & registration, and even a lemon check to boot.

Additional marketplaces sprang up in business, real estate, industrial, medical and other business-oriented categories offering such pricey stuff as a brand new $85,000 four-wheel drive Holland industrial tractor, or a $20,000 thermal fume oxidizer to a world-class salmon fishing resort (a bargain at $4 million). To increase inventory and add merchants, eBay went after brick-and-mortar businesses the old-fashioned way - one telephone call at a time.

But let's get back to the beginning of eBay when it was a mecca for collectible and antiques dealers. That's how Nancy Levine of the Antiques Market first learned about the online auction company.

A specialist in antique Irish Belleek and English Wedgwood who has done business in New Haven's Westville neighborhood for 30 years, selling on eBay turned into an experiment gone right for her small business.

Her brother Steven Levine, a school psychologist and antique clock collector, introduced her to eBay in 1997. "He told me that a lot of antiques dealers were getting good prices and that I ought to give it a try. So, I put up a few items and I'm still selling there," she says.

Now an eBay "PowerSeller" (a top eBay seller with a sustained, consistent, high volume of monthly sales), Levine sells around 30 antiques per week under the moniker "chivas1NH" (named after the couple's first Scottish Terrier, who spent his weekdays in their shop on Fountain Street).

For Levine, eBay effectively advertises what she specializes in: "I get great referrals from people who contact me looking for a particular Wedgwood or Belleek item," she explains. "So not only do I perhaps get a sale from the listing and gain a new customer, but potential new customers. That's a good thing."

Though eBay has been good to her business, it has also changed the fundamental character of the antiques trade, laments Levine. Instead of showing items to would-be customers in her shop, Levine, more often than not, is found sitting at her computer sending e-mails with JPG images. It's turned her into a reluctant techie, mastering the skills that go along with a computer and a digital camera - not exactly what she would like to spend her time on. (She says she'd rather be buying at a land-based auction house.)

"eBay has allowed us to develop a new revenue stream and it's been consistent since the beginning," she explains. "But it has changed the nature of the antiques store. You can't depend on your walk-in business anymore and have to do a little of everything in order to survive today."

That's why car dealerships use eBay, too. Though by now most dealerships have flashy Web sites, these operate more like highly decorative brochures than as functional selling tools. For many dealers, the auction is a platform they know intimately so, it was only natural to experiment with online auctions.

And eBay Motors is a big deal, a very big deal - a whopping $9.8 billion in gross merchandise volume swapped hands in Q2. With numbers like that, where else online would a car dealer want to go?

Steve Hutton, who is in charge of eBay selling for Steven's of Milford, lists on average about a dozen used cars each week. He lists all makes and models ranging in price from $100 to the tens of thousands - some without a reserve price - under the eBay username "stevensofmilford."

Steven's started selling on eBay in June 2003, and Hutton says he's very satisfied with the results. "It's a great selling tool for us and allows us to reach a very broad audience that we otherwise wouldn't," he says.

In business selling new and used vehicles in Milford since 1955, the dealership, like most, uses its own Web site more as an information and promotional tool than anything else. It also lists inventory on typical industry car sites such as autotrader.com as well as on the Ford, Lincoln Mercury, Chrysler, and Dodge national Web sites. But since commencing selling on eBay, Steven's has sold 80-plus cars to buyers in such far away locales as Texas, Florida and Chicago. Hutton adds that most of these vehicles would just sit in the lot or await their fate at a wholesale auction, so listing them on eBay makes good business sense for the auto dealership.

And getting started with eBay was easy: "We have our own eBay representative," explains Hutton, sales manager of Steven's, "and that really helped us get up and running rapidly. If I have any problems whatsoever, I just call him."

Like Steven's, Camco Inc. sells used cars on eBay. In business in New Haven since 1977, owner and president Peter Saldamarco and his son Tony have sold on eBay since June 2003. They recently bought a piece of property in Hamden and plan on expanding their online operations.

The pair sell used and vintage cars at wholesale prices. Peter Saldamarco crows that he has just about the lowest overhead in the business, which allows him to pass along big savings to their customers. So selling on eBay for him was a natural extension of their marketing efforts.

Saldamarco loves the big bang for his buck: "The exposure is vast on eBay. Most of the cars we've sold have not been local but regional. We had a guy from Iowa yesterday pick up a car up and we've sold to Florida, Maryland and Michigan, too."

Some businesses though don't have dedicated representatives or offline operations to help support their operations like Milford's Phil Watch, a small online retail business with four employees. A watch collector for many years, Phil Chan started buying vintage watches on eBay before opening his online only new and vintage watch business in 1998. His company grosses about $175,000 per month selling high-end watches.

"eBay is great," says Chan. "It's open 24/7, gives us access to a large worldwide customer base. When I started I had less competition and low overhead. Now there is more competition making it more challenging."

For Vin Carrano of Direct Distribution in East Haven, the competition is just right and sales so far have been steady. He studied eBay for about a year looking for the right product to sell before quitting his job as an operations manager at a trucking company. He knows the warehouse and distribution field and wanted an item that he could sell easily and with a good profit margin.

He chose ShelterKing and became an authorized dealer selling instant garages, party tents, RV, boat and ATV shelters. In his first month, he sold $10,000. Carrano never physically touches the item either as it ships directly from ShelterKing's Stratford warehouse.

Carrano likes the fact that eBay is efficient, fun and easy to use: "Within a day of listing an item I get around 300 hits," says Carrano, a third-generation warehouse and distribution family member. "I list around 20 items per week. It's so easy put up an item and make it [the auction listing] look good."

EBay keeps sellers loyal by offering a steady stream of selling tools, benefits and rewards programs and, since acquiring the online payment platform PayPal, allows sellers to get paid almost instantaneously. But like any other online experience, a modicum of common sense is needed to protect against fraud.

Sellers must endure a share of lazy bidders, fraudulent buyers and insufferable customers. Levine has also had to put up with lost packages worth thousands (she wisely insures everything she ships). Asked if eBay cares about her as a seller, she says: "eBay moderately cares about its users. I think they're really more interested in protecting themselves against liability and making sure they get their fees."

Like any e-commerce transaction, online auctions can survive only if a foundation of security exists. Even though there's been a lot of press about online auction scams, sellers such as Saldamarco and Chan are strangers to the headaches but have experienced the annoyance of chasing down non-paying bidders. That's the nature of the Internet, they say.

Says Saldamarco: "Non-paying bidders are nuts. They just bid for whatever reason, but have no intention to pay." Nevertheless, he considers eBay mainly a safe place to do business. "There's nothing I've come across to prove otherwise. You have to be skeptical online, plain and simple."

In the course of a year Saldamarco has run across his fare share of online scammers trying to obtain information about his eBay account. "If I get one of those fake e-mails, I report it to eBay immediately," he says.

Phil Chan was recently the object of an online credit-card scam and was defrauded of $2,500 from a buyer who called in his credit card after winning an auction and asked that the watch be shipped to an address in Spain as he said he was just traveling on business in the U.S. It turns out the card was stolen and the watch was shipped by the time Chan got wind of the scam. "Everything was approved okay, and the sale finished," he explains, "when about a month later, the cardholder disputed the charge. Now we ship only to billing addresses."
The story of anyone's success or failure on eBay is tied into the auction company's infamous feedback system. The system of rating your experience was designed as a serious of checks and balances, though that's not always the case. "It's critical to your success, but," Saldamarco observes, "if someone leaves negative feedback maliciously, inadvertently or mistakenly you can't remove it. And that's not right. It can really hurt your ability to sell."

Concerns about a company's reputation can make or break a big-ticket sale, Chan notes. "Feedback means a lot to us," he says. "Sometimes, though, we have to bend over backwards to please the customer in extreme ways just so we don't get a negative feedback."

Hutton, at Steven's of Milford, agrees.

"We're committed to pleasing our customers," he says. "Our 100-percent positive feedback encourages people to buy from us. They know they're dealing with a reputable dealership. That's what makes our business work on eBay."