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Last Updated: Thursday, 16 November 2006, 15:31 GMT
Making it big on eBay
By Charles Miller
BBC Money Programme

eBay logo
EBay is now used by many small businesses

The website eBay has become the focus of a new breed of entrepreneurs who hope to make money by trading online.

Jameel Verjee is a corporate lawyer turned entrepreneur, who wants to raise funds from potential investors in the city.

He wants to raise a million pounds to pay the wages of the half dozen staff he already employs in north London.

In the tradition of technology start-ups, he's confident that the losses he is sustaining today will be nothing to the profits he will make tomorrow.

Dotcom boom

It sounds like the heady days of the dotcom boom.

But this is 2006, and Jameel's hi-tech business, Bid Easy, is set up specifically to trade on eBay.

Increasingly we have small businesses who use eBay as their primary distribution channel
Meg Whitman, eBay

Today, big companies "almost need an eBay strategy", Jameel insists, as he pitches for his investment.

"Eighteen months ago, when we started, eBay was a joke, people used to put the phone down on us."

He claims that's changed, and business is now taking eBay seriously.

He plans to corner the market in luxury goods, acting as an intermediary between manufacturers, wholesalers or retailers and eBay buyers.

Massive growth

It's the numbers, more than anything, that are responsible for focussing business minds on eBay.

Wilmamae Ward
Is selling clothes on eBay the way to a fortune?

Britain is now the world's busiest eBay nation.

There's more traded on eBay UK per head of population - an incredible 50 a year each - than anywhere else, including the USA.

That's the power behind a new generation of eBay businesses.

It's part of a worldwide trend that eBay's Chief Executive Meg Whitman acknowledges.

"We certainly still have the individual sellers who sell one item at a time as sort of a recycling [process], their kids have outgrown their clothes, or used sporting good equipment. But increasingly we have small businesses who use eBay as their primary distribution channel," she says.

From PR to eBay

Wilmamae Ward has given up a successful career in public relations to start her own eBay business.

Under the name the Gathering Goddess, she lists women's clothes and accessories, and hopes that with a high enough turnover, she can make money from the slim profit margins she can get after acquiring and processing her stock, and paying eBay fees.

The reality of her London apartment, stuffed with new clothes on rails, is still far from the large scale selling operation she dreams about.

"I really believe the only way to make serious money on eBay is by selling in volume," she says. "I have a long term vision for this. I'm trying to build a brand as well as a business."

Sellers' convention

Wilma found examples to inspire her when she attended eBay's massive seller convention, eBay Live, in Las Vegas this summer.

Over 15,000 of eBay's most committed traders turned up for what Meg Whitman describes as "one part education, one part family reunion, and one part celebration."

The celebration is the most obvious part of the event, with Huey Lewis and the News, a popular booking, to entertain the predominantly middle-American crowd. But away from the throng, the small Professional eBay Sellers' Association - effectively, the eBay millionaires' club - offered an exclusive refuge in its own hotel suite for elite sellers.

Pep talk

Wilma enjoyed a pep talk from Phil Leahy, who sells thousands of CDs a week in Australia.

He's been on the same journey, from sole trader to owner of a big eBay business, that Wilma wants to make.

He could only process about 150 orders a week on his own, he tells her, but "if you can just keep thinking smart and positive and keep thinking about the end goal, you'll get there." The eBay tide is flowing towards the kinds of businesses that Jameel and Wilma are starting.

The company has started eBay Express, where only businesses sellers can list items, and all items are new, not second-hand.

And you can buy instantly, without having to wait for auctions to close.

It's clearly an attempt to grab business from other online sellers like Amazon, where buyers expect instant results, and don't want to wonder what kind of condition second-hand goods are going to be in. Alongside all this, the original eBay is also flourishing.

Doug McCallum, Managing Director of eBay UK insists that "we still love the 'fun-ness' of eBay, the weird and wonderful things that you can find, as well as the fun of bidding and the excitement of seeing whether you win. That's not going away."

Street traders

Long-term eBay sellers like Simon and Carol Balch are still planning to build their future on the kind of items that made eBay famous - anything from sports memorabilia to novelty cigarette lighters.

Simon was a market trader who turned to eBay four years ago.

They also went to the Las Vegas convention and came back with new ideas about how to make his eBay business more profitable.

Five months later, turnover has doubled, and Simon says "it's actually paying each week, which is exciting."

Improving his sales has become a business challenge, which is almost out of character for this self-styled `mad collector'.

"It's the chase, that sort of thing. I think it's within me now," he says.

The Money Programme - Making it Big on eBay - is on BBC2 at 1900 GMT on Friday 17 November.

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