Going, Going...Click!

Internet auctions are cheap, convenient--and reach millions

Robbin Sinclair used to sell collectibles at flea markets to help pay her college tuition. But she no longer wastes weekends sitting at a booth while she waits for browsers to plunk down their money. Sinclair, a 43-year-old student from Casper, Wyo., has set up shop on eBay, the largest online auction site. Recently, she pocketed $175 for a pair of 1950s vintage curtains with fluttering pink leaves that she bought for $3 last July, and says she couldn't give away at a flea market. "People were fighting for them," she says.

Sinclair now pulls in $1,300 a month on eBay, triple what she made before, and more than enough to pay her tuition. She is one of millions who have recently hammered down a sale on the Web auction block. As 24-hour-a-day electronic garage sales have mushroomed, online auction sales soared to $1.4 billion in 1998 and are expected to grow to $19 billion by 2003, according to Forrester Research. People are using Web auctions to sell everything from jade trinket boxes to classic cars.

The lure of selling items in an online auction is understandable. Internet auctions often cost less than classified ads. You don't have to schlep goods to a flea market, use up a coveted weekend day, or worry about weather. Net auctions also reach millions of people worldwide, so you're likely to get a better price than you would if you set a fixed price in a physical sale. As one eBay seller says: "People will buy anything in an auction because they think they're getting a bargain."

DINOSAUR BONES. To get in on the act, you need to know the value of the item you're selling and how to price it. Then you must decide which of the thousands of auction Web sites to use and how and when to sell. In online auctions, you simply register on a Web site, and post descriptions of each item in a specific category. You can provide photos and set a minimum bidding price. Bids from interested buyers appear instantly and are continuously updated. Once the auction closes, the highest bidder is obligated to buy. You can't legally hold someone to the sale, however. If you get a bad bid, you're only recourse is to relist your item. You contact your winning bidder via e-mail or phone, confirm the final cost, and have the payment sent. When the bidder meets your terms, you send the item.

Whether you're auctioning off used cowboy boots or a Norman Rockwell print, neither will sell unless you get the pricing right. You can set a reserve price, which is the amount a bid must reach before you're required to sell. If the reserve isn't met, the sale doesn't take place. Or, if you want to be assured of a certain price, you can set a minimum opening bid that is an acceptable final sale price.

There are a number of ways to determine the value of your item. You can check price guides and collector magazines, or call a dealer or collector to check the current market for items you want to sell. You can also compare the price that similar items have already sold for on the Net. Some sites, such as eBay, list completed auctions for the last 30 days, showing the number of bids, whether the item sold, and at what price.

When you set your price, remember to factor in fees. They vary, but the structure is often the same. eBay's listing fee, for example, starts at 25 cents for cheaper items and goes up to $2. Some sites, such as Yahoo!, allow you to list for free. You must also pay the auction site a small percentage of the selling price. It could be a sliding scale from 5% of the final sale amount to 1.25% for higher-priced items. Or you might encounter a flat fee of 2% to 3%. Also, determine how much it will cost to pack and ship the item, and specify those charges in your description.

Researching comparable auctions will help you decide which Web site to use. Because you can only list your item on one site at a time, you want the one that will generate the most bids from serious buyers. eBay is the Goliath of auction sites, with $8 million in sales daily and 2,978 categories. eBay's huge selection brings in so many buyers that most sellers choose it. That's great for sellers, because the large number of bidders drives up prices. But eBay may not always be the right place. Alan Detrich, a paleontologist, originally listed a 25-foot-tall, 40-foot-long Tyrannosaurus rex skeleton for $5.8 million on eBay. But "people bid on it who didn't have the means to pay for it," says Detrich. So he put it up for sale on www.millionaire.com, a Web site linked to Lycos because it prequalifies bidders before they bid.

To find obscure, yet potentially more appropriate, places to list your items, go to resource sites like AuctionRover, which reports nearly every available site. Or do an auction on the Fairmarket network. To compete with eBay, Fairmarket links 100 Web sites such as Excite and Lycos that cross-list items. Any item you put for bid on one site will appear on all of them.

Next, it's time to market your item. Take care to choose the category that best fits your item. Write a clear and eye-catching title to attract attention, and mention the item's condition, age, and special qualities. You'll need to write a complete description. Don't forget to mention flaws to help build your credibility. Photos are an important sales tool, since many buyers won't bid without seeing what an item looks like. You must also state the payment methods you'll accept. Money orders or cashier's checks are the safest. Wait until personal checks have cleared before you send your item. You might want to consider an online escrow service, such as i-escrow (www.iescrow.com), for an expensive sale. It and other middlemen hold the money until the item is delivered and both parties are satisfied. They usually charge a fee of about 5% of the purchase price.

PROMPT REPLIES. Finally, you must decide when to hold the auction--and this is critical. It's best to begin in the evening after most people leave work, say, between 5 and 9. But be aware of the time zone the auction site operates in. Then consider how long you'll run your auction and the day of the week it will start and end. A three-day auction is good for a hot item like a Pokemon trading card, while a seven-day auction works well for an item you don't think will go as quickly. After 10 days, most items look stale and bidders lose interest. Don't start or end on a weekend, when potential buyers are out. Most of the action tends to take place in the last few hours of an auction.

Once bidding begins, keep track of your auction and respond promptly and politely to e-mails. If your item sells, pack it carefully and ship it as soon as you receive payment. And don't forget to keep tax records. You won't have to pay income tax on money you earn if you sell your items for less than their original cost. But the tax laws get sticky if you're selling a collectible that has appreciated in value. In this case, check with your accountant.

A word of caution: Selling online can become habit-forming. That's what Edward Ciliberti found. "I am up all hours of the night checking on my auctions," says Ciliberti, who is a real estate agent in Pacific Grove, Calif. In one month on eBay, he earned $34,638 selling collectibles.

If you've got bags full of baby clothes and no babies to give them to or other items that have been taking up space in your closet, don't throw them out. Try auctioning them online. You may be surprised to see how much they're worth.