Online Auctioneers Finding New Careers

By Mark R. Smith



Many people like to quote the old cliché about there being safety in numbers when they're looking for a little reassurance.

If that's true of Ron Bratt, he'll only need one: 430,000.

The CEO of Columbia-based Auction Safari (www.auction-safari.com) was researching possible outlets for his and partner Jeff Shiller's entrepreneurial spirits when he was struck by fact that about 430,000 people use eBay for full- or part-time employment when he attended eBay Live in New Orleans last June.

But Bratt has a new-ish twist. While most eBayers simply work from home, his upstart Columbia company has taken that approach a step further by leasing 8,500 square feet off Red Branch Road, which includes space for 40 clients to auction off their wares in assigned categories, plus a 4,500-square-foot warehouse and considerable logistical support.

While attorneys-by-training Bratt and Shiller are in the midst of signing up hardcore online auctioneers for their venture, others are taking a more traditional (if that term applies) tack to auctioning off anything from cars to sports memorabilia to housewares for friends, family and a busy general public that is willing to pay a percentage for the service.

The market is surely there, with more than $34 billion worth of goods sold on eBay alone in 2004.



What a Concept

Bratt and Shiller had been looking for business opportunities when Bratt made his trek to The Big Easy. "At eBay Live, I felt I had found an incredible collaborative environment that I wanted to create here," Bratt said.

Saying he "does not know of anyone else who has set up a brokerage in the country as we have," Bratt explained how Auction Safari will run. "Our business plan calls for 35-40 sellers to operate different markets at once," with the company providing photographers, listers, an e-mail responder, fulfillment department and a warehouse operator.

For those services, clients pay Auction Safari a $2,000 capital initiation fee, $500-$1,000 a month in rent and 10% off the top for services. Other auction sites, like Yahoo, Bizrate and shopping.com, also figure in the mix.

What makes the model a brokerage, Bratt said, "is that people who have been selling out of their homes can sell out of one account, so we will be able to offer the power of all of our sellers. That can propel us to Titanium Power Seller status within a year, which equates to $150,000 a month in gross sales. And that increases the trust of buyers."

There's also power in cross-selling. "If we have 40 people selling each others' items, we are sharing the clients," Bratt said. "Someone who is buying jewelry might want to buy a dress, too."

Bratt's third point is the power of collaboration. "When we have 40 talented sellers all working under one roof, they can share ideas and referrals, and fourth is the cost-sharing we can pass on to our independent workers."

As Auction Safari grows, the company will also have "incredible buying power with liquidators. Since there are 40 of us, we buy at high volume, so we get great discounts," Bratt said.



'Traditional' Approach

While Bratt and Shiller's concept is intriguing, there are still many other online auctioneers who prefer to work from home. Take Blanche Hayden of Columbia.

Hayden runs Online Auctions, Etc. and had been eBaying for about five years. "I eventually got excited about seeing how we could help friends. Then they ended up giving me referrals and my business grew."

She has officially been in business for about a year. She has a drop-off center at Parcel Plus in the Long Reach Village Center, picks up items and takes digital photographs on site of such items as antique cars, engines, backyard sheds, electric ranges, motorcycle parts, holiday items, clothes and, of course, various collectibles. She also works with thriving and dissolving businesses.

Some products, Hayden said, like furniture, are easier to sell locally. "We are looking for alternative web sites that enhance that part of the business. We offer local pick-up only in some cases."

While all businesses have their challenges, online selling is relatively simple. "You need a good camera with Macro so you can get good close-ups and a good computer with broadband access. Without that, don't bother," said Hayden, who charges commissions ranging between 20% to 30% and notes that eBay fees are going up this month. She also pays for packing and shipping, while the sellers pay for any auction fees.

She is now planning her marketing and public relations efforts for the long haul. They include print ads and maybe some broadcast spots on Comcast. Fundraising ("a large part of the business") is also part of her image building, with an initial effort having been conducted for Habitat for Humanity. Another is planned for tsunami relief.

"People are so busy today that they do not have the equipment or the time to set up their auctions properly," Hayden said, "but mind you, the clock does not stop in this business. You can't go away and not give feedback, for example. You have to keep your buyers and sellers happy."



Joining the Team

Brad Kay knows both sides of the online auction coin. The owner of Super Pawn in Laurel has been eBaying out of his shop on Route 1 in Laurel and said the online element of his business has grown too large for a small operator to handle.

"We had been contracting out for our eBay services, but the people we've been dealing with can't really handle the volume we want," he said, "and our customer flow is so demanding that we don't have time or space to list and sell nearly as many items as we would like to."

Therefore, he is one of the first additions to the Auction Safari lineup. "They have the apparatus and the depth to help us move a lot of merchandise that we may not have been able to otherwise.

"I am optimistic about working with them, since we are one of the largest cash buyers in Maryland and they're the right match for us," Kay said, pointing out that Super Pawn grossed $10,000 in its first month on eBay last September. "We're hoping to triple that figure with Auction Safari."

But Steven Frost is still straddling the fence. He runs Integrated Martial Arts & Fitness in Columbia and wants to leverage his income. "What I like about Auction Safari is that they can set you up turnkey to sell on the web," he said.

Frost is planning to rep various lines of marital arts gear if he takes the plunge. "All I'd have to do is provide the expertise in the line I would represent and find the products, write the narrative and select the pricing. That is pretty much it."



From Up Above

Though Frost has not committed, he finds Bratt to have a good grasp of the business. "Brick and mortar businesses have their place, but this would get me worldwide exposure, 24/7."

Such is the power of Internet. "We know that eBay has always been a place for individuals and small businesses to compete on a level playing field," said Hani Durzy, a spokesperson for San Jose, Calif.-based eBay.

"We do not track folks like Ron Bratt, but have heard of quite a few stay-at-home moms and dads, former executives, etc., who have gotten into the business," he said, many of whom, like Frost and Kay, focus on selling what they are passionate about.

Durzy said many entrepreneurs have benefited from eBay's training assistant program for people who have met certain parameters, like 98% positive feedback, consistent sales of a certain level and are solid eBay citizens.

While many sellers have operated in hypermode since eBay's founding, "We do not control how these people run their individual businesses. In the U.S. alone, we have more than 40,000 of these folks listed on our web site (www.ebay.com/ta)," he noted.

"What eBay has done is offer an efficient marketplace that could only be created through the Internet," Durzy said. "There is just no other way."