The eBay Home Biz Acid Tes

For those thinking of starting an Internet-based business, you're lucky to
live in an age and country of immense possibility. You can launch from home
with little capital. You can even test your idea part-time before quitting
your day job. The task of launching will require some imagination, research
and the willingness to adapt to a market, but it doesn't require nearly the
risk business start-ups required in the recent past.

Launching a business used to be a monster task. When I started a publishing
business in the mid-1980s, launching an enterprise involved raising capital,
finding investors, buying equipment, leasing office space, hiring employees,
developing a marketing plan, creating and implementing sales strategies,
developing fulfillment operations and filling out tons and tons of paperwork.
If you did everything right and ran into a streak of good luck, you had about
a one in four chances for success.

The 1980s were a good time for business start-ups compared to earlier periods
when the prospects for small business success were dim indeed. There was a
point in the early 1970s when business academics predicted the end of small
business. With the development of chain retailers and with the mass
manufacturing of consumer and industrial goods firmly in the hands of large
corporations, there was little room in the American economy for a small
company.

Then came the niche market. Whether it was gourmet food products, natural
fabric clothes, or special interest magazines, consumers showed a willingness
to buy highly specialized products that fell into corners too small for large
manufacturing and distribution. Enterprising niche marketers were able to
identify and serve specialized groups of fly fishers, hot sauce collectors
and heirloom-seed gardeners who were willing to pay a premium for specialized
products. An explosion of small niche companies sprang up to serve these
high-end consumers.

The key to niche marketing was highly specific expertise. In most cases,
proprietors of niche businesses were fellow enthusiasts who were part of the
niche community. These entrepreneurs knew how to find their customers and
knew how to serve them because they were one of them. Yet these small
companies still had the burden of creating catalogs and building shipping
operations, not to mention investing heavily in direct mail lists and postage.

The Internet has magnified the niche trend. Suddenly the cost of reaching the
special-interest community has been drastically reduced. Instead of creating
a storefront or direct mail catalogs, specialized retailers can launch Web
stores. There is more competition in an Internet niche than their was in the
catalog niche, but the cost of competing effectively on the Web is
considerably lower than competing with catalogs and pricey mailing lists.

Plus, you can do it from home. Plus, you can test the business before you
commit full-time to the idea.

eBay has provided a wonderfully convenient testing ground for specialized
retail businesses. Thousands of small entrepreneurs are using eBay to find
customers and build communities of niche consumers, all without buying
mailing lists that are 98 percent useless at best. I saw this firsthand over
the summer as my thirteen-year-old son used his babysitting money to buy and
sell video games.

Many of the game retails were entrepreneurs who had Web sites displaying full
lines of goods. They would buy games in quantity, sell them in eBay auctions,
then invite their customers to their Web sites for additional sales. The cost
of obtaining a potential customer was virtually nil. All they needed were a
few products to sell on eBay and a few more products at their Web sores.

The beauty of testing a business idea on eBay is you don't even need the
ability to take credit cards. You can ask your customers to use PayPal
(www.paypal.com) to transfer dollars (without transaction fees) from their
checking account to yours. You can trade in collectible-like used products,
buy cut-out products or purchase new goods in large quantities to sell below
retail price. You can do it from home part-time. If it works, you're in
business. And your odds for succeeding now are better than even.