EcommerceBytes-Update, Number 147 - July 24, 2005 - ISSN 1528-6703     3 of 7

When eBay Clicks Lead Back to Bricks

By Greg Holden

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The traditional view of selling on eBay is that you don't need a brick-and-mortar store to reach customers. Some antique dealers have told me they have closed up their physical storefronts and moved to selling on eBay full-time through "virtual" stores.

But I'm noticing a different trend these days. As eBay's most successful PowerSellers mature as businesspeople - and as eBay's fees increase, thus reducing their profit margin - there is significant movement in the opposite direction. Instead of solely operating on the Internet, enterprising businesspeople are opening brick-and-mortar stores. As they've discovered, a physical location enables them to conduct business in new and potentially exciting ways.

For some sellers, opening up a physical facility enables them to clear the clutter out of their homes. For others, having a building that's dedicated to their business enables them to separate their work from their family life. For practically everyone, a brick-and-mortar building allows them to do more business - to order more inventory, to sell more items, and to overcome the perennial challenge of finding enough merchandise to sell.

For David Portugal (User ID: auctionsbydavid), an eBay drop-off store provides greater visibility. After several years selling on eBay, he recently opened a store called Auctions by David located in Algonquin, Illinois. Having a physical store enables him to sell big items such as cars, boats, and motorcycles. And he doesn't mind letting the owners of the merchandise he sells on consignment learn how to sell on eBay themselves.

"Teaching is a valuable service you can provide to people," he says. "When people see what I do, they want to know how I do it, and so I teach them."

But operating a real, physical store forces some eBay sellers to do things differently. Because of the time and expense involved in running a business and hiring employees, Portugal does not find it profitable to sell anything in his drop-off store that's priced at less than $50. He also focuses as much as possible on businesses that need to liquidate their inventory through eBay, rather than individuals who want to sell heirlooms and collectibles.

For Melissa Sands (User ID: sands-o-time), having a brick-and-mortar store near her home in Clinton Township, Michigan, fulfills a number of needs. For one thing, it separates her eBay sales from her home life. She no longer has boxes of merchandise scattered all over the house. Having a real business and business hours gives her schedule a structure and, as a result, she actually spends more time with her family. "At 5:30, when the day is done, I can go home. Before, when I worked at home, I worked into all hours of the night."

Not only that, but having a real store gives clients a place to drop off merchandise for her to post on eBay. Several have walked through the door to ask her to sell their entire estates simply because she had a brick-and-mortar store they could visit.

For Kevin Harmon (User ID: iqbookbubba), a brick-and-mortar facility doesn't mean a store that the public can access. It's a 2,000 sq. ft. warehouse that can hold the 100,000-plus DVDs, video games, and other items he sells on eBay. Harmon deals in high volume: in less than three years, he's built up a feedback rating of more than 47,000.

Harmon's warehouse near Charlotte, North Carolina, isn't necessarily a way to separate home and family. After all, his kids are part of the packing crew, and it's not unusual for his wife Linda to help out at the work facility.

What kinds of things should you keep in mind when considering your own brick-and-mortar facility?

  • Location. Some sellers locate their warehouses near an airport so shipping services can rush them out in the mail.
  • Size. Make sure you have room to grow. You'll need space not only for storage but also for delivery, packing, and shipping.
  • Public access. Will your building be open to the public or will it only be a site for storage and shipping?
  • Taxes and legal requirements. When you build or purchase a physical store, you are subject to property tax on that facility. You'll also need a building permit if you plan extensive renovations.
  • Marketing. Once you have a physical building, be sure to take advantage of additional marketing opportunities, such as an ad in your local Yellow Pages and newspapers.

When you have another place to do business, you can cross-promote, using your brick-and-mortar venue to publicize your eBay Store and vice-versa. And a physical location gives you opportunities to reach the public that really aren't that new.

"I have a big sign posted at one of the major intersections in town that points people right down the street to my store," says David Portugal. "Talk about putting up a banner ad!"


About the author:

Greg Holden is EcommerceBytes Contributing Editor. He is a journalist and the author of many books, including "Starting an Online Business For Dummies," "Go Google: 20 Ways to Reach More Customers and Build Revenue with Google Business Tools," and several books about eBay, including "How to Do Everything with Your eBay Business," second edition, and "Secrets of the eBay Millionaires," both published by Osborne-McGraw Hill. Find out more on Greg's website, which includes his blog, a list of his books, and his fiction and biographical writing.


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