Inside Job: Doing It eBay

Run Your Own Auction House

Had enough of the rat race? Maybe it's time to start your own business -- and many people have had success opening shop from within their homes. In our Inside Job special feature, we've gathered information you can use to learn the ins and outs of doing a home-based business right.

Lynn Dralle , author of "The Unofficial Guide to Making Money on eBay" (Wiley, 2006), is the self-styled "Queen of Auctions." She was online to share tips with folks who want to do online auctions full-time as well as those looking to clean out the garage.

For more on entrepreneurism, visit last year's Small Business 101 special feature. And there is plenty more information on jobs and careers in our online Jobs section .

The transcript follows below.

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San Diego, Calif.: The San Diego Union Tribune ran an article about a year or two ago regarding making a sizable income on eBay. It stated that eBay offered a medical plan to those making a career out of selling on eBay. Is this correct and whom do I contact to get more info. about this?

Lynn Dralle: Dear San Diego,

Yes, if you are an eBay power seller there are health plans available. In fact, my health insurance is through the eBay plan and it is quite reasonable for me and my two kids. An eBay power seller sells at least $1,000 a month for three months and I believe must have 100 positive feedback points. For more information, click on the live yellow help buttons on the eBay home page and they can get you in touch with the right people. I learned about the health plans at eBay live. The next eBay Live is in Boston in June of 2007. I will be there! Stop by and say hello.

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Washington, D.C.: How does one get started selling on eBay? Where can I find good and reliable information?

Lynn Dralle: The library is a great place to start. There are a ton of great books out there about eBay and Amazon.com carries all of them. Also, my Web site has a lot of free information and you can access it at http://www.thequeenofauctions.com. Good luck to you. eBay is a great way to make a living!

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Hornell, N.Y.: What is the most common mistake most "newbies" make when starting to sell on eBay?

Lynne Dralle: Hi there. One of the most common and devastating mistakes that newbies make is that they only list a few items. They may only put five things up for auction and then they are discouraged when nothing sells the first time out. eBay is a numbers game and you have to list a lot of items to be successful. I list at least 100 new items each week. Good Luck to you!

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Upper Marlboro, Md.: How well does original artwork do on eBay, in your estimation? I don't mean famous artists, but new or regionally known folks.

Lynn Dralle: Hi there. I have heard of and seen a lot of artists do quite well on eBay. One lady was a watercolor artist and she developed a huge following on eBay. My mom was always trying to buy her stuff. Another artist who does quite well sells handmade beads. She wrote an article about selling your crafts on eBay and it is posted for free on my Web site. Check it out at www.thequeenofauctions.com Good luck to you.

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Oklahoma City, Oklahoma: With garage sale season almost over, other than thrift stores, where do you recommend the purchase of collectible merchandise? Thanks.

Lynne Dralle: Hi there. Garage sale season is over in certain parts of the country, but there will still be charity, church and estate sales. Make an effort to check your paper every Saturday. Out here in the desert during the hot summer months -- it could be considered off season. But because of that, not a lot of shoppers are out and I got some great items this summer because of less competition. Also, consider taking a weekend road trip to towns close by and check out their thrift store. I scored this summer on a mini-vacation to Sedona, Arizona. Their thrift stores were amazing. You can also post wanted to buy ads on Craigs List, in your local newspaper and nationally. My grandmother used to say "There are always places to find something to buy if you have the money to spend." Good luck to you!

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Lusby, Md.: Lynn: I loved your free teleseminar that you had last week and wish it could have been longer. I've been selling on eBay since 1998 and there is always new stuff to learn, be kept aware of, and hear how others "do it the eBay way." So ... my question is, when deciding a starting price for your item, do you start low and hope for a bidding war or start high and hope you get a bid or two. Or somewhere in between?

Lynn Dralle: Thanks for listening last week, I appreciate it! I always start my auctions at $9.99 and hope for the bidding war. It makes listing faster and I don't have to do research -- eBay bidders do it for me. I only list things higher when I know that it will take a specialized buyer, or I paid a lot or it has sentimental meaning to me. I hope that helps.

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Flint, Mich.: Mostly everything runs smooth, but I still have trouble getting calculated shipping costs. They always come up so high, that people are turned off. So, I use a average price, and end up paying part of the shipping costs. Not good ... HELP!

Lynne Dralle: The shipping can make or break your business. You need to charge enough to cover your packing supplies and handling time. I always say s/h/i. Do not worry that the higher costs will turn some customers off -- you will go broke if you are paying part of the actual shipping charges. Find a carrier that will work with you to lower your rates. I use UPS and because I spend about $50,000 a year with them, my rates are about 30-40 percent off of their published web rates. That covers my packing supplies and handling time. I hope that helps.

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Washington, D.C.: How exactly did you become a power seller? What are you selling? How did you get started?

Lynn Dralle: Hi there. To be an eBay power seller, You must sell at least $1,000 a month for an average of three months. And you must have (I think) 100 feedback points and they must be 98 percent or more positive. I sell antiques and collectibles. I got starteeight about 8 years ago when my grandmother got sick and we had to raise money for her nursing home care. She had owned an antique store for 52 years so we had a lot of stuff! But no way to turn it into quick cash -- eBay was our answer. Good luck to you.

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Chevy Chase, Md.: 100 new items a week? Where in the world would one get 100 items a week?

Lynn Dralle: Hi there. 100 items is easy. I can go out on a Saturday morning with $200 and fill up my mom's minivan. They don't have to be expensive items -- just items that I think will sell for $9.99. My average selling price on eBay is about $20. I don't sell $100,000 a year on eBay with large ticket items. The big hits are few and far between -- you make a good constant living with the small stuff. Take care.

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Listing strategy: We have sold mostly sports collectibles and some household items on eBay, and have been pleased with the results. We usually set a reasonable minimum for fair shipping costs. We have yet to use the other options such as "buy it now," and hidden reserve prices or inflated shipping costs. Would you ever encourage using any of these listing tactics for items in the $15-50 range?

Lynn Dralle: Hi there,

Thanks for the question. Never use a "buy it now" unless you own multiples. I like to let the auction format price the item for me and why limit yourself? Once you have put it up for auction and if it doesn't sell then you can move it into an eBay store at a fixed buy it now price. I use reserves on more expensive items -- never on items in the $50 range. I don't charge actual shipping costs -- I try and add on $1 to $3 to cover my handling expenses. Take care.

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Washington, D.C.: I want to sell items on eBay part time, approximately two hours a day. I found that I could make about 10 percent profit finding and selling CDs and DVDs on eBay that I bought as loss-leaders from retail outlets. Right now I'm selling off collectibles from years of being a music fan.

However, I am disappointed and disillusioned that I get one or two items bid past the minimum bid and a sea of ignored items.

I also find that it takes me about 15 minutes to take a photo, convert it, then write a good description and schedule it for listing. And what I mean is that I can take pictures of 16 items at once then write 16 descriptions and suddenly it's midnight. So I'm left with making about $20 per hour less than half of what I make at my job.

How do people keep their hourly rates up?

Lynn Dralle: Don't get discouraged. You just need a system. I start all my auctions at $9.99. If they don't sell (and let me tell you a lot of them don't sell at auction) I either lower the price to $3.99 or move them directly into my eBay store. You need an assembly line system to keep your hourly rate up and you may need to hire out the jobs you don't enjoy. I have an assistant who does all my question answering, checking in the money and shipping the items. You might need to hire someone to take the photos. Hang in there.

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Washington, D.C.: I want to sell on eBay, but it seems like a lot of work. Is it a lot of work or is getting started the hardest part? I see you can have a mentor, so to speak, to assist you in selling. Would you suggest that?

Lynn Dralle: Hi there. eBay is a lot of work. Don't let anyone tell you it isn't. However, it is work that I enjoy. Getting started is not hard. Read a few books, check out all the free info on my web site and sign up for my free ezine. It is always packed with helpful tips and tricks. http://www.thequeenofauctions.com And then just jump in! Try a few things. Don't be scared-eBay has made it really simple. Happy eBaying.

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Washington, D.C.: Do we have to report eBay income to the IRS?

Lynn Dralle: Hi there in D.C. That is really a question for your accountant. However, my eBay business is just that--a business and I report it to the IRS. Also, keep in mind that because it is a home based business there are a lot of benefits and tax write offs. When I travel and buy for my business -- the trip becomes a write off -- etc. etc. Good Luck to you.

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Covina, Calif.: Lynn, do you use eBay's picture manager or other photo software to upload photos, or do you load them individually. And what about Turbolister?

Lynn Dralle: Hi, fellow Californian. I do not use any fancy software -- not the photo manager or turbo lister. I have found (from doing this for eight years) that they are a waste of time. Just another item to manage. I use the straight SYI (Sell Your Item) form that can be found on eBay and I am fast! Take care.

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Claremont, N.H.: What do you think about selling books on eBay ... all kinds of books?

Lynn Dralle: Hi there. Books are tough on eBay. Here is what has worked for me. One week I listed 100 books. I listed them all at auction (individually first) at $9.99. A few sold for $9.99 and some may even go higher. Out of that batch one Titanic book sold for $102.50 and a poultry book went for $48.50. So I probably sold about $200 worth. I don't bother relisting them at auction and just moved them all into my eBay store at $9.99. This was about one year ago and I have sold about 70 of them at the $9.99. It is a long process -- not real quick money but if you are patient -- it can work. Just don't pay too much for them. I only paid $100 for 1,000 books and I still have 900 of them sitting here waiting to be listed. Yikes! Good luck to you.

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Slidell, La.: Hi, Lynn. Can you share some tips on packing delicate items like dinnerware and china? Thanks.

Lynne Dralle: Hi there. We always bubble wrap delicate items individually. Then we use two inches of packing peanuts around all sides of the box. If you are shipping multiple items like a stack of dinner plates -- we will sometimes put a sheet of cardboard between each one also. Thanks!

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Powell, Tenn.: I am a stay-at-home mom with a small eBay business. I net about the same amount of money as I did working full-time, and now that my kids are both in school, I want to focus more energy on growing my business. Everyone else wants to know if I am "going back to work." How do you get others to understand that an eBay business IS a real job?

Lynne Dralle: Hi Stay at Home Mom,

I am also a stay at home mom. Congrats on making as much as you did while working full time! That is definitely something to be proud of. I would share that information with folks when they ask you about returning to work. eBay is a full time job and can be very lucrative. Show them the Good Housekeeping article about me and eBay as my dream job from September of 2006. That is pretty good proof. Happy eBaying.

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Fort Collins, Colo.: Lynn, why do you use buy it now on auctions when the store costs less to list as buy it now?

Lynne Dralle: Hi there. I rarely use buy it nows on auctions. Of the 4,300 items I have listed on eBay, over 4,000 are buy it nows in my store (because as you mentioned it is cheaper). I am using a bin for a car that I want to sell quickly and I do use a few buy it nows on auctions for items that I have multiples of. This way I can sell more of them quickly. A buy it now on auction gets all the exposure of an auction. A buy it now in your store does not get as much exposure and may only come up when a customer searches in eBay stores. Take care.

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Lincoln, Neb.: Lynn, what are your thoughts on services like Auctiva? Do you think adding the colorful borders are a good use of your time? Or do you think they are not worth the time it takes to do them?

Lynn Dralle: Hi Nebraska. All the added bells and whistles just take more of my precious time. In one hour I could have 15 new items listed and that is money in my pocket. I keep my auctions simple and straightforward and believe me -- it is working! Take care.

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Elyria, Ohio: As a seasoned eBay seller with over 1,600 feedback, I'm very curious as to how you list 100 auctions a week. We do everything in batch mode and the most we can get done is 50 to 60. How many hours are you spending listing 100 auctions a week? Are you doing it yourself? Thanks.

Lynn Dralle: Hi there. I do have it down to a science and I do not do everything myself. I only do the things I love. I can find, photograph and list 100 items in about 15 to 20 hours. I have someone else do the measuring, descriptions, packing and shipping. Challenge yourself to do 100 items one week. You can do it! I always take 100 of my i sell tracking sheets on a Saturday morning and number them 1 to 100 -- that way I make myself do it. I don't stop until it is done. Take care and good luck.

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Nashua, N.H.: We've been in business for over a year as eBay dealers. We'd like to take our business to the next level. What would you recommend?

Lynne Dralle: Congrats on being ready to take your business to the next level! That is exciting. I think that one way would be to try and list double the amount of items that you are currently listing. eBay really is a numbers game and the more you list (and either sell or move into your eBay store) the more money you will make. I do teach a three day boot camp where I show my students how to ramp it up to hit the six figure level. There is more information at www.theqofa.com. Thanks and good luck.

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Columbia, Md.: I have a business idea I thought not a lot of people knew about but as I searched more and more online I found out that there are many people doing the same thing I want to do but most of them seem like scams. The idea was to open a drop shipment online store. I am sure you have heard about it. I have a few companies that do drop shipment, so I started doing it part-time on eBay. I saw good results in the beginning and sold almost $4,000 worth of items within a two-month period but then the sales stopped. I am not sure why but I wasn't getting any responses on eBay. It kind of scared me to open my own on-line store if I wasn't even getting any traffic on eBay. My question is, how can I boost sales? Should I continue with eBay or spend a few hundred dollars on a Web site and open my own on-line store? Where can I find real NO SCAM suppliers who can do drop shipment? I think that's the biggest problem I have. I can find one place online that does not look like they will just take my money and I wont get anything. Only a few suppliers I have right now are from one of the Trade Shows I visited this past summer. Your response and help will be highly appreciated. I think I have a good business idea but not enough connections to make it a reality.

Lynn Dralle: Hi there. I don't know much about the drop shipping business. There is a lot of competition in that area and it is all about the connections and who you know. You might consider attending eBay Live in Boston next year to see what is out there. It is a great idea and will work with the right networking. Take care.

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Oak Ridge, N.J.: Hi, Lynn. Listened to your call last week, loved it. My question is how do you list 100 items in only 15 to 20 hours? That is so many items and so little time. Please share this with us.

Lynne Dralle: Hi there. Thanks for listening to the call. I use an assembly line technique. I do all my writing up first (using my 'I Sell Binder' system). Then I do all the photography. Once that is all done I sit down and do the actual listings. It is hard to explain in writing but just as Henry Ford used a production line -- that is what I have turned my eBay business into. Take care.

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Auburn, Wash.: What items would you never list to sell on eBay?

Lynn Dralle: Hi Auburn, Wash.,

The only items I would never list to sell on eBay would be those that are not allowed by eBay. Everything else (and I am not kidding) gets a shot on eBay. Too many things that I was going to throw away have ended up selling for big bucks. An example, In my "100 Best Things I've Sold on eBay" book item number #61 was a Danish catalog that my grandmother got for free in Denmark in the 1960's. I tried to throw it away so many times (along with all of her other paper catalogs) and she would never let me. Well she was so smart! That catalog sold for $66.77. Always try an item on eBay before throwing away. Good luck to you.

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Washington, D.C.: Every time I found a reliable and not rip-off wholesaler I checked on eBay and people were undercutting on price. For instance, I found some toys in a store I liked, I checked with the manufacturer, I got their prices, but when I checked on eBay every one of their items was selling for less or at wholesale. I have no idea where these sellers were getting items, but they'd "dumped" the entire catalog online. I can't list an item, then pack it and ship it for the $1 shipping and handling profit.

Lynn Dralle: Dear D.C.,

You have learned a very important lesson the hard way. Most of the commodity items are selling for very close to manufacturer's wholesale. So, if you are going to be in the commodity business you will have to have very high volume to make money. That is why I sell antiques and collectibles on eBay. Things that I find at garage sales and thrift stores. The margins are high and I always find tons of stuff. You might try this route. I will do six figures in sales this year from unique one of a kind items. Take care.

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Issaquah, Wash.: Is selling antique or vintage furniture online a good idea?

Lynn Dralle: Hi there in Washington state. Selling furniture on eBay can be very lucrative but it can also be a challenge. I have always done big items with Pick up only or ask that the buyer arrange the shipping. If you can figure out an inexpensive way to ship your items (work with some of the bigger trucking companies etc.) you will be very successful. Take care.

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Orlando, Fla.: What is the best way to show a rare item from Russia (handmade doll)?

Lynne Dralle: Take a really good photo with a digital camera. Maybe take one of the front and one of the back. The photo is key to showing it off the best. If you aren't good with your digital camera, find a friend who is. Check out my auctions on eBay. I sell as TheQueenofAuctions. All of my photos are taken with a relatively inexpensive older camera. They are taken outside in indirect light with no flash and they look great. Good luck.

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Hartford, Wisc.: What is the best way to determine shipping? If you use the shipping calculator, you need to know dimensions and weight, what is the best type of scale to use for weight?

Lynn Dralle: Hi there. I am not a fan of the shipping calculator. We bought a small scale for up to 10 pounds on (you guessed it) eBay! And we use a larger scale that we bought at an office store for up to 70 pounds. I have a system for pricing my shipping that works great. I am working on a DVD to show how to do it. It really is an important process. But in a nutshell, I charge a flat rate for most things. A dinner plate is $9.95 ups s/h/i. And then I say $2-3 for each additional item. A small vase may be $8.95 and a large lamp would be $24.95. And so on. Thanks for the question.

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Alexandria, Va.: Hi, Lynn. I have been selling part time (I have a full-time office job) since 2000 and love it, selling mostly what I find at thrift shops (collectibles, dishes, art, you name it). I would suggest to other sellers, newbies or not, to use eBay as a resource to tell you what sell or what doesn't sell, and how well. Check completed auctions for the item you are thinking of selling, then sort by highest price first. Those items are the ones you probably want to consider selling.

Lynn Dralle: Hi there. That is great advice. It is also fun to do some searches by eras and to see what is hot. As you probably know Eames era items 1947 to 1969 -- sleek mid century modern is super hot. Do the completed auction search by Eames and you will be amazed! Thanks for the tip.

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Dupont Circle, D.C.: Thanks for taking my question. I want to sell more on eBay, but I have absolutely no idea what to charge people for shipping on items. What's a good way to determine what to charge? Should I do a flat rate (say $7 to ship no matter where in the U.S. it goes) or be really specific? Thanks!

Lynn Dralle: Hi D.C.: lat rate is absolutely the way to go. I am a huge fan of this. I use $4.95 and $5.95 for USPS priority s/h (these prices are for items less than one pound). I use $7.95, $8.95, $9.95, $14.95, $24.95, and even up to $99.95 as my flat rate charge for UPS s/h/i in the U.S. I do have a weekly UPS pickup account so my rates are much better than the published rates. This way I cover my packing materials and handling fees (my assistant's pay who ships them). Thanks.

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Puyallup, Wash.: What is the easiest way to keep track of eBay fees, Paypal fees, misc. expenses for tax purposes?

Lynn Dralle: I use eBay selling manager Ppo and at the end of each month I print out a report that shows my sales, eBay fees and Paypal fees. It is very  handy -- not guaranteed to be reliable but pretty close. I also use my I sell tracking binders and sheets as back up. You can check those out on my Web site. Happy eBaying!

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Slidell, La.: Hi, Lynn. You said you don't spend much time on research for listing your items. If after listing it at auction for say $9.99 and it doesn't sell, how do you know how much to list it in your store for? Thanks.

Lynn Dralle: Hi there. As my grandmother used to say PFA -- "pulled from air". It is just a gut feeling. I can always lower the price later but I can't ever raise it. I also try and stay under the $24.99 price point for the most part because it is now an added five cents to go over it per month. Great question!

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Maryland: More of a comment than a question, although it would be interesting to get your opinion:

What a lot of people fail to realize is that selling full-time on eBay isn't easy. You need to think of it as a business same as any other enterprise. Do your research on items. Don't use every listing upgrade and have fees so high you lose money even when someone wins your auction. (Truthfully, the only upgrade most sellers need is gallery pictures ...)

There's still money to be made on eBay, for both part time and full time sellers. But there's a considerable amount of work involved. I run a part-time store and average 10-15 hours a week. A relative is a full-time seller and works way more than 40 hours in a week.

Lynn Dralle: Hi there,

You are absolutely right. eBay isn't easy, it is a lot of hard work but it is FUN! Also, I have hired out those parts of the job that I don't enjoy doing. I have an assistant who does all my shipping. I just do what I love -- finding items and listing them. You are also right on about the gallery being the only upgrade to use. It is all I use. No fancy stuff. Thanks for the comment.

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Atlanta, Ga.: At what point does it become advantageous to open an eBay store?

Lynn Dralle: Hi there,

I am the biggest fan of the eBay store. Even with the higher prices to list--it still is going wonderfully for me. I was selling between $1,000 and $,2000 a month from my eBay store but I think November and December will be $3,000 to ,$4000. Keep in mind that I do have over 4000 items in my store. I think a good time to open one is when you have about 50 things that have not sold at auction. Sometimes I even raise my price in my eBay store and get it! I had a head vase that I couldn't sell last month for $9.99 but I put it in my eBay Store at $39.99 and it sold this week! Also, make sure that you move them into your eBay store before the 90 days are up or you will have to do all the listing work again. An eBay item number is good for 90 days. Thanks.

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washingtonpost.com: And we're out of time for today. Thanks for joining us.

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