How Four eBay Stars Got Started

An idea, a need, a passion, a calling--everyone has a reason for starting a business on eBay. Here are 4 entrepreneurs' stories.

Lynn Dralle got her start on eBay the way many people did in the late 1990s--she was searching for Beanie Babies to buy.

For those who are too young to remember, or for those whose pop-culture memories are fuzzy, this was a decade in which tiny, furry stuffed animals created by Ty Inc. were decreed collectible items because of their limited availability and short manufacturing lives. It was an age in which otherwise rational people were suddenly buying the stuffed animals by the dozen and occasionally paying hundreds or thousands of dollars for an individual stuffed Beanie Baby, certain they would recoup their investments tenfold. It was an age of Beanie Baby magazines, books and collectors' cases.

"They will come back again," the Palm Desert, California, entrepreneur says confidently, citing a Beanie Baby she recently saw on eBay with a bid of $1,150.

Whether Beanie Babies will be as good an investment as old coins or comic books remains to be seen, but in that period, they were a profitable venture for entrepreneurs like Dralle, who bought Beanie Babies on eBay to sell as future collectibles in her grandmother's antiques store. The experience went so well, she couldn't help but start shopping on eBay for herself. "My grandmother bought me a vase when I was 13, and I had never found another piece like it," explains Dralle, 42. "Now, I have 13 of those vases, and every time I buy one, it reminds me of my grandmother."

Silly, sublime, sentimental or strange, every entrepreneur has a story about how he or she started on eBay. While the tales are different, one plot element remains the same: eBay improved their quality of life--not to mention their income.

Nomad No More
Six years ago, Tim Siegel, then 30, was going places. Specifically, he was driving from Minnesota to Guatemala, after a friend convinced him that he could make a lot of money selling medical equipment down there. It was worth a shot. Siegel's degree in criminology had led him into a job managing telemarketers, which he considered the worst job he ever had, and then into management at a hospitality company. The upside of his second job was that he got to visit far-flung lands like Guam and Malaysia. So when a friend convinced him of the financial gains to be found selling medical equipment in Guatemala, Siegel figured he would, at the very least, get to do something he loves: travel.

True enough. But while the 3,000-mile trip by truck--and school bus--was at first an adventure, it eventually became exhausting. Siegel's friend had been right. Because Guatemala's infrastructure is so poor, those with money are willing to pay top dollar for what they need to buy. As Siegel says, "If a surgical table is worth $1,000 here, an end user in Guatemala would pay two to three times [that]. That is also true with vehicles or just about anything else. So many people currently export down there, I would guess it's very tough to make a profit now."

But not back then. Siegel would always sell his vehicle after all the goods were sold, then fly home. But it was still a challenging journey.

In 1999, the same friend suggested he try selling his merchandise on eBay, and Siegel leapt at the chance. A fetal monitor bought for $250 sold for $500, and Siegel knew he was never going back to Guatemala. Today, Siegel has an eBay-based company called Matrix Medical that sells mostly medical and dental equipment to buyers around the world, with about 5 percent of sales from other products.

Siegel hopes to eventually have his own warehouse, a bigger truck and employees. In a recent month, he brought in $36,000, and his 2005 gross sales should be just under half a million dollars.

"It's nice not risking my life driving 3,000 miles," says Siegel. "These days, I'll buy anything, because I know I can sell it. My confidence level has risen a lot. When you buy something for $500 and can sell it for $8,000, it really blows your mind. I'm sure without eBay, I'd have been successful, but it's hard to say what would have happened. Would I have kept going to Guatemala and crashed somewhere? Now I can buy something and literally have the money for it today, as opposed to waiting." And driving.

Freedom to Create
In early 2003, Hae Yoon was riding her dirt bike in the hills of Bishop, California, with her friends, enjoying the rush of the wind in her face. Far off was the highway, with a truck barreling down it, and Yoon couldn't resist trying to race it. My family shouldn't worry, Yoon thought, giddy. Riding a dirt bike is perfectly safe, as long as you know what you're doing...

Then she noticed the barbed-wire fence in front of her.

Yoon, now 32, had quit her job as a marketing manager for an event-planning company in November 2002. She was planning to start her own business in the yoga industry, when she discovered dirt biking isn't really perfectly safe. After a successful back surgery, Yoon moved in with her brothers, recovering and living off the money she had saved for her business. By the time she felt up to striking out on her own, it was spring 2004. She moved back to Los Angeles and attempted to reignite the business she had almost started.

She planned to produce yoga-mat bags, among other yoga-related accessories, but after spending several thousand dollars on some prototypes, she realized it was too expensive a venture to attempt--and besides, her savings were almost depleted. With Christmas coming and no career to speak of, she was beginning to feel a bit demoralized.

About that time, she found some cashmere sweaters at a great discount and started selling them on eBay just for the fun of it. "It was just something I stumbled on through a friend," says Yoon. "He mentioned a place where he got all this great merchandise for outrageous prices. I put [the sweaters] on eBay to see what would happen, and I sold out in 48 hours."

Yoon was enlightened. Yoga wasn't the answer; eBay was. She began selling women's apparel full time this January, and already, her business is on track to pull in between $300,000 and $400,000 in 2005. "The benefits have been enormous," says Yoon, whose hallway and dining room are full of inventory, though she eventually hopes to move to an office and have employees. "I want to work 10 times harder than I ever did at my previous jobs. It feels great to know you're creating something and not working on a project for somebody else."

Brick, Mortar and Morale
The 21st century had arrived, but nobody at Machinery Values felt like celebrating. In 2001, founder and CEO Gene Valitt, now 64, was afraid he would be putting up a going-out-of-business sign instead of celebrating the company's 30th anniversary. The industrial machine dealer in Harrison, New Jersey, had gone from 70 employees to 35, from making $20 million annually to less than $10 million. The way it looked, the future partners--Valitt's sons Andrew and David, 39 and 36, respectively, and Rick Lazarus, 37, who all work in various capacities at Machinery Values--had little future to look toward.

COO Art Lazarus, who had become a partner in 1995, kept trying to think of a way to stop the damage. "We went through a very difficult time--the recession, 9/11 and a three-and-a-half year period where business was really lousy in our industry," says Art, 59. "People weren't expanding, prices dropped, and our revenue dropped. We were losing money."

The breakthrough came when Art began to think about their "dead inventory," $250,000 worth of metalworks equipment and odds and ends. It was all perfectly good material, but was inexpensive enough that they could never justify spending advertising money to alert customers it was available. So they just kept collecting a warehouse full of items. "We said, 'Business is lousy, we're sitting around here--we should put people to work clearing this stuff out, cleaning it, photographing it and selling it on eBay,'" Art recalls.

Everything sold, to the point where Machinery Values was bringing in as much as $20,000 a month. Art started scrapping the catalogs they produced two or three times a year--which cost the company about $100,000 each time--and began marketing their products through eBay instead. Now, a few years later, the company brings in over $1 million a year--or about 15 percent of its sales--from eBay. Art says eBay has also introduced many customers to their business, bringing traffic into their warehouse. Counting indirect sales, Art credits eBay for bringing in 30 percent to 40 percent of business--and saving the company.

It's Good to be Home
Dralle believes eBay has saved her quality of life. And why shouldn't she? After her grandmother passed away in 2000 at the age of 88, Dralle kept the antiques store running for a while, but had to close up shop two years later. The overhead was too high, and a lifetime of memories lingered. Running the business without her grandmother around just wasn't the same. Meanwhile, Dralle had visions of working out of her house so she could be with her kids.

Today, Dralle's website links to her eBay Store, which brings in approximately $250,000 a year selling antiques. That's not even counting her earnings from her series of eBay books with titles like The 100 Best Things I've Sold on eBay. And just as she hoped, she sees her children a lot more than she ever did when she put in 50 hours a week at the store.

"Now, I take them to school and pick them up, and they know they can come in [my home office] and do their homework," she says. When they aren't in school, they can ride around with Dralle, who spends much of her time canvassing garage sales and looking for treasures she can sell on eBay. She cites a recent example of a wood carving of a bird, which she recognized as a piece of work by a master carver. She paid $2 for it, but plenty of collectors were quick to recognize its value. The top bid for the carving was $2,052. "Those are the ones that make me jump up and down," says Dralle. "Really, I'm just so happy that I can live wherever I want, and I love what I'm doing." It's one of those intangibles that nobody can put a price on.