Behind eBay's entrepreneurial buzz

In the beginning, there were beanie babies. Whole menageries piling up in basements and being put up for auction on eBay.com.

Now, nearly six years after that craze popularized the virtual flea market, eBay-spawned businesses are coming out of the basement - filling warehouses and employing new college grads who otherwise might find themselves pounding the pavement during this summer of the jobless recovery.

Plenty of eBay sales are still orchestrated from people's homes in their spare time. But the past few years have seen full-time eBay businesses proliferate. The San Jose, Calif., company estimates 160,000 Americans make a significant income, or their entire income, by selling everything from collectible porcelain to used scuba gear on the website.

These businesses constantly evolve to keep pace with the shifting bargain-hunters' market. And much of eBay's development has come in response to their needs, says eBay spokesman Kevin Pursglove.

For instance, new lingo and services have been added to accommodate full-time sellers. Peddle at least $1,000 worth of merchandise a month for three months straight while receiving customer feedback that's 98 percent positive, and you earn the label "PowerSeller." Of the 33 million active eBay users, 65,000 have earned this designation.

Last year, the website also set up an area where people unfamiliar with online auctions can find local "trading assistants" to sell items online for them for a commission. The list of 25,000 is gaining about 30 new people a day, Mr. Pursglove says.

And at eBay's recent national gathering in Florida, the Small Business Administration gave a two-hour seminar about taxes and legal issues related to making a living off the auction site. It's the kind of education that's needed as more people find a onetime clean-out-the-attic project morphing into a full-fledged business.

"It's so easy to start an eBay business that a lot of people go in ill-prepared," says David Steiner of Natick, Mass., who publishes an online-auction newsletter for people who need tips about the process.

To be an eBay seller, he says, you have to be a researcher, photographer, master packer, customer-service rep, and computer technician. "The tradeoff is that many of these people have a real entrepreneurial spirit and they love the autonomy. They'd rather do the extra work to be able to do it when they want - like at 3:00 in the morning in their pajamas."

Now, rather than falling into eBay as a second career, some people are planning it as their first.

Take the scruffy-faced young men who run Yoozed.com, a business that's 95 percent eBay sales. Matt Solar and Artie D'Onofrio reign over a second-floor office in Boston with a décor that's part dorm room, part dotcom.

The small room where items are photographed is draped with a bright green cloth, a background that's easy to edit out once the photos are on the computer. Shelves are stacked with clothes ready for shipping once they're sold. In the main area, where customer-service staff sit at computers to answer e-mail from eBay bidders, the walls are adorned with nerf guns and posters for movies like "The Matrix: Reloaded."

The two met at Babson College, a suburban Boston school with a business focus. Mr. D'Onofrio had gotten into eBay during its early days, selling, yes, beanie babies, for extra cash. Then, looking for a more plentiful product, he started scouring flea markets and auctioning off used clothes.

He and Mr. Solar became business partners in their senior year. They took the used-items idea, applied some creative spelling, and launched Yoozed.com last fall - a few months after graduation. Each put in about $1,500 to start it up.

Half of the sales fall under the trading-assistant label - items from people who don't have the time or knowledge to navigate the auction system themselves. One person wanted to sell three bleacher seats from the dismantled Boston Garden sports arena. Another brought in a collection of 800 Bibles. Commissions vary, but average around 20 percent.

The other half they find themselves. Sales staff venture onto local campuses, buying used clothing from students.

They also go to estate sales. And one employee finds surplus electronics and oversees its shipment from a warehouse in Philadelphia.

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