Entrepreneurs profit on EBay

Andrew Green was riding the Internet to success in the 1990s as vice president of operations for an e-commerce business in Washington.

When the company folded after the dot-com bubble burst, "I found myself unemployed in the midst of the dot-com meltdown," Mr. Green said.

He decided to use his dot-com experience to start a business on Internet auction site EBay.

From a start in his Silver Spring home, where he used his basement as a warehouse, his enterprise is now on track to bring in $2 million to $3 million in revenue this year. About two-thirds of his sales come from the online auction site.

He joins 724,000 Americans who earn primary or secondary incomes from EBay's marketplace -- up 68 percent from more than 430,000 in 2004, according to a recent ACNielsen survey.

About 15,600 of them operate in the Washington area. Of those, 24 percent have retired early or quit their jobs to sell full-time on EBay, according to ACNielsen.

A larger number of Washington-area residents, or about 142,000, are occasional EBay sellers.

Mr. Green's business, Taxi Market, primarily sells telescopes, microscopes, office furniture, glow sticks and art objects. Other items that sell well are consumer electronics, antiques, jewelry and automobile parts.

"I started selling on EBay because the level of sophistication of competitors was pretty low at the time, and I felt that my experience with e-commerce best practices gave me a decent head start," Mr. Green said. "That was 3 years ago. Things are different now. In virtually every product category, sellers face competition from increasingly savvy e-commerce and EBay experts."

EBay's growing sophistication showed in its second-quarter net income, which increased 53 percent from one year ago to $291.6 million, prompting the stock value to soar 21 percent the day after the earnings report.

E-commerce market research firm JupiterResearch projects that Internet spending will exceed $79 billion this year in the United States and experience double-digit growth through at least 2009.

Aaron Price, another Washington entrepreneur, uses EBay to sell excess and damaged merchandise that other businesses want to get rid of.

"I started out on EBay five years ago selling a broken scanner that I was going to throw away," said Mr. Price, who operates a business called effordables.com. "I decided to post it on EBay and, to my amazement, it sold. I was immediately fascinated and began selling on EBay as an almost obsessive hobby."

Eventually, he turned his hobby into a business that sold motorcycle parts. He later expanded it to excess and damaged merchandise, which has been his full-time job for the past two years. He stores the merchandise at a warehouse in Washington.

"The ability to work from home or while on vacation isn't always a benefit," Mr. Price said. "However, the effectiveness of a 24-hour marketplace is unparalleled." He would not discuss his company's financial performance.

Bob Donaldson, owner of USA Print & Copy, said he saves as much as $10,000 a year buying supplies for his Arlington print shop.

"I can pass those savings on to customers," Mr. Donaldson said.

He recommends that buyers check the "feedback score" on each seller, which is a number next to the EBay listing ranging from one to 100. It represents the percentage of satisfied customers.

Occasionally, sellers charge shipping fees that are too high, he said.

"If you get sellers who have a score in the low 90s or 80s, I stay away from them," Mr. Donaldson said.