This online auction house has reinvented small business
Story by Rachael Carlomagno
What do a haunted painting, a leftover piece of Justin Timberlake’s french toast and a partially used life have in common? They are just a few examples of items auctioned off on eBay.
Every day, millions of loyal eBay users visit this online auction house to buy and sell products in thousands of categories. This global flea market is reshaping the way small businesses operate.
Michael Rappa, a professor of technology and management at North Carolina State University, says eBay acts as a broker, facilitating transactions between people on the Internet.
By using an auction format to introduce millions of sellers to a global community of buyers, eBay acts as the middleman in the person-to-person marketplace, he says.
Pamela Grimm, an assistant professor of marketing at Kent State, says eBay has caused a fundamental change in the economy. By increasing the pool of commodity goods, the market processed more efficiently and prices went down.
In contrast, selling prices for rare collectibles rose because interested buyers from around the world increased the demand on small businesses.
“It allowed people who never dreamed of starting a business to become successful private entrepreneurs,” Grimm says.
Karen Barrett, owner of City Bank Antiques in Kent, says the rise of eBay has had a noticeable impact on her in-store sales. “I’ve seen a very successful business dramatically decline with the presence of eBay and the condition of the economy in general.”
Originally, Barrett started selling a portion of her collection, which includes clocks, lamps, jewelry and other antiques, on eBay and made a considerable profit. But it was time-consuming for her to list the products online, check e-mails and coordinate shipping. It was simply too difficult to continue managing her one-person store while also selling on eBay.
“It’s a store within a store. It was more work than I thought,” she says. “Right now, we only sell pocket watches on eBay, which is why we could be more successful.”
The profit margin is much greater on eBay, Barrett says. Her watches sell for much more online because there are many consumers competing for a single item, she adds.
Eventually, if her local customer base continues to shrink, Barrett may be forced to close her shop and sell on eBay alone. But she hopes to keep the store open until its 10-year anniversary in a couple months.
“I have a store presence,” she says. “I am still looking for the resurrection of store traffic in downtown Kent. If stores can’t struggle to stay here amongst the threat of eBay as an ever present source of sales, there’ll just be restaurants and banks instead of a community of shops.”
Barrett has had success with eBay as well as failure. She feels that everything in sales comes around full circle, and she hopes local, store-based retail will again be viable.
“I’m dealing with old-fashioned items, and it’s hard for me to get technologically advanced,” she says. “I guess that’s why I’m dragging my feet to get on board.”
She has noticed that the number of sellers participating in antique shows has greatly decreased.
“There’s half the dealers there used to be because they are selling online,” she says. “They stay at home and make more money. But they don’t have the cameraderie with their customers.”
Jason Bloemer, of Bloemer Studios in Medina, designs and sells hand-blown glass jewelry through eBay. The colorful pendants sell for $20 and up on eBay.
“It’s a hobby for me,” Bloemer says. “It’s something I enjoy doing. I work two to four hours a night and on weekends.”
His father is a glassblower, so he naturally came into the business. He began using the equipment and creating designs, and he found there was an interested market on eBay.
Bloemer says his business has grown to the point where he has trouble keeping up with the demand. A number of galleries and bead shops across the country regularly carry his line of jewelry.
“I definitely couldn’t do this without eBay,” he says. His other job as a Webmaster makes him no stranger to the Internet. “I know the tricks and how to get stuff out there, but even with that you’re not reaching the millions of viewers that you have on eBay.”
With the upcoming holidays, Bloemer is in the middle of his busiest season, making about 70 to 100 pieces a week.
“I’ve been fortunate enough to get my name out there,” he says. “I see (my business) getting really big where I’ll need to take on apprentices.”
Although his business is thriving, Bloemer is hesitant about depending solely on eBay. He’ll eventually have to make a decision, but for now he wants to pay off his house and have more financial security before he quits his day job.
Rachael Carlomagno is a senior magazine journalism major. This is her the sixth time writing for The Burr.
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