Articles: Real Stories About Living the Dream
Online entrepreneurship becomes a new way of life Internet selling presents surprising career for manySan Francisco Chronicle
By John Koopman
December 19, 2005
In March 2000, Randall Pinson was working his way through college by selling cell phones and pagers in Salt Lake City. To make extra money, he and his partner bought about 160 Nokia cell phones in a liquidation sale, only to discover the devices didn't work outside of New York. They were about to eat a $4,000 loss when his partner suggested selling the phones online.
Pinson opened an eBay account and within a few minutes made back his initial investment. A year later, Pinson quit the cell phone business and went full time into online sales.
"I pictured myself working for a company, making good money, doing market research," the 29-year-old said. "But this thing really turned my life around 180 degrees. I've never been happier."
Pinson is a case study in Internet entrepreneurship: A regular guy has a regular job until he discovers he can make an income selling online. But he's not unique in the way he does business.
Internet users have been turning themselves into Internet merchants since eBay began in 1995. Ten years later, according to a recent study by the Pew Internet and American Life Project, 17 percent of Internet users -- 25 million people -- sell goods and services online. Online auction giant eBay's numbers are even more startling: In 2002, the company reported 24.5 million active users of its Web site; in the third quarter of 2005 that number rose to 68 million.
Although the exact number of Internet salesmen and women is debatable, the variety of goods sold is not. People sell land, houses, cars, electronics, jewelry, collectables and all manner of stuff. Even non-objects, like virtual weapons, armor and monetary units associated with online games like World of Warcraft, can earn a seller some cash.
Glenn Browne, director of the Institute for Internet Buyer Behavior at Texas Tech, says the increase in online selling is the result of new and easy-to-use software tools for the online seller. In years past, it was difficult to post digital photos online, to say nothing of billing and collecting money. But new software programs have made these tasks easy and secure, enabling even the severest Luddite to sell a coin collection and take payment by credit card.
"The great thing about the Internet is how it's equalized access," said Browne. "Anyone with a computer and an Internet connection can sell. You go online and you have access to everyone else online."
Early Power Seller
Marjie Smith understands that well. She is an eBay Power Seller, the designation given by the San Jose company to high-volume sellers who maintain at least 98 percent positive feedback from customers. Smith, who lives in Port Royal, S.C., earns her living by selling Etienne Aigner purses and accessories online. In the early '90s, she lost the use of her right arm and leg in an industrial accident, and now uses a wheelchair to get around.
"Selling online allows me to do something I love, but still keep my own hours," Smith said. "I can make my own time to go to the doctor or physical therapy. Customers don't have to know about my disability, and that's not what's important. I have something to sell, and they want to buy it."
The Pew study found men are the majority of online sellers, as well as people with annual family incomes of $50,000. College graduates sold more online than those with high school diplomas. Nineteen percent of those who sell are white, while 17 percent are English-speaking Latino. Only 6 percent are African American.
Also more likely to sell are people who regularly use the Internet and those who have a fast Internet connection. Similarly, people who have been online for more than six years were more likely to sell than those with less experience. And adults ages 29 to 40 were more likely to be online sellers than those 18 to 28.
Professor Sanjit Sengupta, chairman of the marketing department at San Francisco State University's College of Business, said what's fascinating is how the Internet is democratizing business culture.
"Everyone can get started in business without some of the traditional barriers in terms of land, labor and capital," he said. "Instead, people need only to rely on knowledge and intellectual capitol. This has created a new class of entrepreneurs."
Sengupta pointed out, however, that many of the 25 million sellers are one- or two-time sellers. And while the number of eBay power sellers is substantial, he said, it's not large enough to affect the U.S. economy.
Browne says that the number of Internet sellers will taper off over time, but that Internet selling will continue to grow and eventually reshape the way people consume. Online sales will not replace retail stores, he said, because most retailers have a Web presence in addition to their physical stores. But the phenomenon is sparking an evolutionary change in who shops and how.
The manner of online selling is also evolving. Randall Chemel runs an eBay drop-off store in a mall in Woodland Hills (Los Angeles County) with his wife, Helene. But theirs is part of a franchise, called iSoldIt, that includes 158 stores nationwide in which people bring items to the franchisees to sell online. The Chemels take 30 percent of the item's sale price up to $500 and 20 percent of anything over that.
Chemel's story is fairly common: After the Internet bubble burst, he was laid off from his job. Because he worked in the recording and video industry, he had wrestling videos, concert T-shirts and the like lying around. He couldn't get another job immediately, so he started selling his stash online.
"Twenty-thousand sales later, I now own an eBay store and we're doing pretty well," he said.
Quick and easy money is far from guaranteed by selling online. Pinson studies products and markets to maximize profit.
"There's great potential, but there's also great risk," he said. "I'd like to say it's all skill, but there's also a certain amount of luck and intuition that goes into it."
Chemel, too, has to be knowledgeable about what sells -- and for how much. People watch collectibles shows on TV, or read stories about online sales, and come to him expecting large amounts for antique goods. But he said prices for online sales have leveled off, due to the vast quantity of merchandise available.
Meanwhile, across the continent in South Carolina, Smith, a disabled single mother with two kids, sells a cornucopia of things online: kangaroo leather items, books, lights made to look like knights, cookie jars, salt-and-pepper shakers, platters.
Started with Beanie Babies
She got into online sales in 1997, when a friend mentioned she sold Beanie Babies through eBay and made a nice profit. Smith looked around her home. There were Beanie Babies everywhere.
In addition to specializing in sales of the Etienne Aigner line of women's accessories, Smith has started an association for disabled people, at www.doua.org. Through the association, she teaches other people with handicaps to sell online.
"No one should use their disability as an excuse," she said. "We have people with every form of disability, from quadriplegics to the developmentally disabled. In some cases, it's tough for them, and they have to have help.
"But it's also very liberating to run your own business."
Who sells on eBay?
Here are some of the findings about online sellers, according to a recent study from the Pew Internet and American Life Project.
The majority of online sellers are men with annual family incomes of $50,000.
College graduates sold more online than those with high school diplomas.
Nineteen percent of those who sell online are white, while 17 percent are English-speaking Latino.
Only 6 percent of those who sell stuff online are African American.
Adults ages 29 to 40 are more likely to sell online than those 18 to 28.
Source: Pew Internet and American Life Project
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