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AuctionBytes Blog The AuctionBytes Blog has been giving a voice to online merchants since its launch in 2005. Named one of the world's top 30 blogs in 2008 by "Blogging Heroes." Weigh in with your thoughts on the joys and pitfalls of selling online.
Wed Mar 1 2017 20:42:45

The Rise and Fall of an eBay Seller

By: Ina Steiner
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Can you find success off of eBay? One reader hailed a business called Nasty Gal in 2010 when it left the eBay platform for greener pastures.

The founder, Sophia Amoruso, found success as she built the Nasty Gal business to a peak of nearly $100 million in sales in 2012, according to the LA Times. But with growth comes growing pains, and this year a UK firm called Boohoo.com bought Nasty Gal for $20 million after it had declared bankruptcy last year, the newspaper reported.

The article is a must-read for any online merchant who has big dreams. Management issues, spending, fickle customers, problems with suppliers, all contributed to the company's problems.

"It's very hard to scale an ecommerce brand," Ari Bloom told the LA Times. Bloom is CEO of Avametric, a fashion software company and an investor in fashion start-ups. 

You have to love this line from Bloom: "If you spend $50 on marketing to get a customer to buy something and they only buy once from you, you are probably not making money."

But don't feel bad for Sophia Amoruso - she has written two books, including one that delves into the founding of Nasty Gal and is the basis of an upcoming television series called Girlboss.

Wikipedia says the first season of the comedy series will be released on Netflix on April 21, 2017.

How many eBay sellers can lay claim to a TV series?



Comments (14) | Permalink
Readers Comments

The Rise and Fall of an eBay Seller   The Rise and Fall of an eBay Seller
This user has validated their user name. by: LasVagueness
       
Thu Mar 2 00:53:15 2017
I still remember the box and packaging from Nasty Gal after management sent free promos for my daughter to model online. As to a TV series, I think there is plenty of fodder here to launch a show.  
The Rise and Fall of an eBay Seller   The Rise and Fall of an eBay Seller
by: Chicago48 This user has validated their user name.
       
Thu Mar 2 04:20:13 2017
That $50 figure was telling.  Folks don't understand how hard & expensive it is to get ONE customer and then try to make that customer a repeat customer.  That's why platforms like EB are needed for the small seller.
The Rise and Fall of an eBay Seller   The Rise and Fall of an eBay Seller
by: counterfeitebay This user has validated their user name.
       Web Site
Thu Mar 2 09:07:06 2017
it is so expensive to aquire a customer online. If your trying to aquire customers from ebay sales it does not happen. Those customers do not switch over. It is expensive to use any marketing out there.  
The Rise and Fall of an eBay Seller   The Rise and Fall of an eBay Seller
by: epuise This user has validated their user name.
       
Thu Mar 2 09:48:45 2017
What most Sellers (who are not Business People) don't realize is a Buyer (who buys once) is not a Customer (who buys often)... Buyers have no loyalty. They look for the cheapest thing... Customers come to you, first... That is why there was some truth to eBay spin... eBay's Customers... they came to eBay to shop, not necessarily to particular Sellers.
The Rise and Fall of an eBay Seller   The Rise and Fall of an eBay Seller
by: steveylang This user has validated their user name.
       
Thu Mar 2 11:53:36 2017
I think she created a good brand with potential to grow beyond an EBay store, but the skills, expertise, and ultimately execution was lacking. Had they grown more organically and gradually, they might be a consistently profitable business today on the verge of greater things.
The Rise and Fall of an eBay Seller   The Rise and Fall of an eBay Seller
by: Volvo351 This user has validated their user name.
       
Thu Mar 2 17:15:17 2017
@epuse

No, a one-time buyer is not, by definition, a 'customer.' A customer is someone who CUSTOMARILY brings his trade to your establishment. That's the origin of the term.
The Rise and Fall of an eBay Seller   The Rise and Fall of an eBay Seller
by: Jerseygal This user has validated their user name.
       
Thu Mar 2 19:00:30 2017
The real problem here is not Sophia's experience or lack of; What happened to her company is what happens when you relinquish control to venture capitalists.... whose bottom line is to pull as much $$ as possible from "investing" in your company.  Suddenly the quality is gone, the clothing doesn't fit and in the final year instead of clothing you are manufacturing low end low cost items... underwear, tee shirts accessories; when the money is gone, the VC's leave.  If you are not able to attract another locust VC, you are dead in the water.  Its a double edge sword really; You will never reach the highest heights without them, but fashion lines take a really long time to build and customer loyalty plays big.  The clothing has to be quality for a good price and it needs to fit!  And you need to know your customer and design for them... I admired her journey... sorry to see this type of end.  
The Rise and Fall of an eBay Seller   The Rise and Fall of an eBay Seller
by: 27tcle This user has validated their user name.
       
Thu Mar 2 21:49:43 2017
When someone buys from me that get not only the item itself but nearly unlimited tech support, and it is this that makes the difference for my particular customers. For most sellers of similar stuff they have no idea what they are selling and give blank stares and shrugs, even worse- knowingly sell broken or defective stuff as untested. With this said, the pickings are getting slimmer with all the tech surplus getting crated and sent direct to CHINA, and it appears that a lot of the regular customers I used to have disappeared off the map. FWIW as of April i'm going back to B&M and will open a direct web store as i'll be doing a lot more services than just selling online.
The Rise and Fall of an eBay Seller   The Rise and Fall of an eBay Seller
by: ySirTinLee This user has validated their user name.
       
Thu Mar 2 23:50:04 2017
I might not know much about running a business, nor do I know what this seller's expenses were upon bankruptcy, but $20 million for flipping a business can't be all that bad.
The Rise and Fall of an eBay Seller   The Rise and Fall of an eBay Seller
by: MRV This user has validated their user name.
       
Fri Mar 3 09:33:48 2017
Long time vintage clothing sellers are only too familiar with Nasty Gal from her earliest days peddling fake vintage on the VCA discussion board on eBay, along with other unethical behavior.

It's interesting that she lasted as long as she did considering her business values, but then again, leaving others to hold the bag seems to be par for the course.



The Rise and Fall of an eBay Seller   The Rise and Fall of an eBay Seller
This user has validated their user name. by: RKTOYS
       
Fri Mar 3 10:23:21 2017
Problems with suppliers?  Don't let the libertarians hear that!

Also agree with @Jerseygal, venture capitalists are locusts.
The Rise and Fall of an eBay Seller   The Rise and Fall of an eBay Seller
by: puppy This user has validated their user name.
       
Fri Mar 3 13:08:57 2017
27tcle, how do I find you on ebay? lol! I would love to buy my future computers from you (and am looking to buy them soon)! Yes, it is these very special caring extra touches that small businesses offer that make accumulating repeat customers simple.

I sell very niche unique items. Most months more than 50% of my sales come from repeat customers that have been with me for many many years. A very high percentage of new shoppers who shop with me return within a year for more.

I think this issue of retaining repeat customers is a big challenge when you sell the same mass manufactured stuff that everyone else is selling and have no special outstanding touch to add, such as offering tech support.

There is something to be said in business for being original, caring and small enough to give something extra special. And businesses that are like this are not looking to scale themselves up to the multi-million dollar size. It is very hard for businesses that cookie cutter and that big to retain customers- for a good reason.
The Rise and Fall of an eBay Seller   The Rise and Fall of an eBay Seller
by: Snapped This user has validated their user name.
       
Sun Mar 5 07:43:20 2017
"There is something to be said in business for being original, caring and small enough to give something extra special. "

Yes, there certainly is.  eBay calls it "Noise".
The Rise and Fall of an eBay Seller   The Rise and Fall of an eBay Seller
by: Toledo Maude This user has validated their user name.
       
Sun Mar 5 12:24:19 2017
@Steveylang: ''I think she created a good brand with potential to grow beyond an EBay store, but the skills, expertise, and ultimately execution was lacking.''

I could not agree with you more.

Hey, look at our beloved longtime partner, eBay.  One cannot find a better example of ''killing the goose that laid the golden egg(s)''.  Sad to say.  


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