If Times Are Tough, They Sell Their Stuff On …
If Times Are Tough, They Sell Their Stuff On Thriving EBay --- Jobless Sell Toys to Fix a Car; Clutter Is Easier to Dump Than Stock That's Down
By Nick Wingfield
08/06/2002
The Wall Street Journal
A1
(Copyright (c) 2002, Dow Jones & Company, Inc.)
Shortly after Rick Steinberg Jr. lost his job as a grocery-store merchandiser several months ago, he made a painful decision: The Legos had to go.
Facing a dismal job market in Stockton, Calif., Mr. Steinberg, who is in his 30s, urgently needed $1,100 for car repairs so he could expand his job hunt to the San Francisco area. So he turned to one of his most prized possessions: a rambling collection of medieval Lego figures featuring skeleton warriors, helmeted swordsmen and smiley-faced peasants.
At a yard sale, the tiny toys wouldn't have fetched much money. But they yielded a little gusher for Mr. Steinberg, thanks to that survivor of the Internet bubble: eBay. He says he has made about $2,000 selling his Legos on eBay. "It's like I had stocks and I'm cashing them in," he says.
For financially strapped Americans, eBay is a new way to raise emergency funds during a downturn that is costing many people their jobs and savaging stock portfolios. In past financial crises, people have sold cars, jewelry and stocks to help make ends meet. But in the age of eBay, household clutter is a liquid asset with its own global exchange.
Even old rock-concert T-shirts can help with the bills. Joe Wagner of Columbus, Ohio, ran into cash-flow problems after losing a Web-design job with a small online-training company in April. Mr. Wagner, 23 years old, had never seriously thought about selling on eBay, but the job market in Columbus was tight. Mr. Wagner began scanning his apartment for potential merchandise.
His first auction: five T-shirts featuring the power-pop band Weezer. One of the T-shirts, which he began collecting in high school, had paint stains on it. The T-shirts sold for $41 to a teenage girl in California. Mr. Wagner doesn't think he would have gotten a dime for them at a local thrift store. "This is . . . going to be grocery necessities and electric bills," says Mr. Wagner.
The T-shirts were just the start. Mr. Wagner is preparing eBay auctions for hundreds of cards from a fantasy game he liked as a teenager called Magic: the Gathering. He's considering selling a Sony PlayStation video-game system and some highway signs, a black light and other items better suited to his old dorm room.
EBay's ability to efficiently satisfy even the most eccentric desires of shoppers -- and match them with sellers -- is one reason the company appears recession-proof. The company recently said its second-quarter profit more than doubled to $54.3 million as its revenue jumped 47%, to $266.3 million. While sellers, from whom eBay collects commissions and listing fees, post millions of items every day on the site, demand from bargain hunters and collectors of the arcane runs just as high.
EBay's shares are down 20% for the year as some analysts and investors have questioned the company's lofty market value, but its shares have fared better than many Internet and technology companies. The tech-heavy Nasdaq Composite Index was down 38% for the year as of yesterday's close. While the bursting of the Internet bubble and broader worries about the tech sector have punished many Internet stocks, eBay's shares have held up relatively well, rising 5% in the past two years.
The liquidity and global reach of the eBay marketplace has made the site a kind of commodities exchange for everything -- including items that would otherwise be destined for the Dumpster. There are many other sites for selling used goods over the Internet, including Yahoo Inc. and Inc., but eBay is by far the dominant player in the category, with an estimated market share of more than 90%.
Liz Longsworth, an unemployed former Microsoft manager, recently cleared out a storage unit in Seattle to save money. On a lark, she listed a collection of old magazines on eBay. Her take for computer magazines wasn't so good: $9 for about a dozen. But her copies of DoubleTake, a periodical with elegant photographs, sold for about $12 each. Ms. Longsworth, 39, considers the proceeds "mad money" to help with groceries. Now she's considering selling more items to help make her mortgage payments.
"I don't want to liquidate my stock," says Ms. Longsworth. "Even if I wanted to, it wouldn't help that much."
For Chris Jones, eBay was a way to avoid cashing in any more of his pummeled stock portfolio than necessary. Late last year, the product manager for Cisco Systems Inc. was looking to buy a loft in San Francisco's South of Market district. To help with the down payment, he unloaded some depressed company stocks, including Apple Computer and even eBay, but not as much as he would have if he hadn't also sold a good chunk of his electronics, books, CDs and clothing. "The stuff I avoided selling was some mutual funds, these tech funds that had dropped 80%," says Mr. Jones, 30. "If I didn't have eBay cash, I would have had to borrow from my retirement."
Mr. Jones, who estimates he makes $500 to $2,000 a week selling on the site, has branched into new areas. On a trip to Thailand, for instance, he stuffed a backpack full of $2 T-shirts with the rock band KISS on them, and sold them for $20 a piece on eBay when he got back home.
Music and books have long been fungible commodities for students in need of a quick buck, especially in urban areas with large used-book and record stores. But bookstores don't pay top dollar.
Some college graduates stumped by the cold job market have found ways to profitably sell books on eBay. Josh Widmann came to Berkeley, Calif., this summer looking for a job after graduating from Cornell University in Ithaca, N.Y. Mr. Widmann, 22, finally found a nonpaying internship, while he set up an eBay business to pay rent and buy food.
His supply: the abundance of used-book stores near the University of California campus, a minute's walk from his house. Mr. Widmann trawls for academic texts and novels by Jack Kerouac, Herman Hesse and other writers then brings them home to list them on eBay. His profit margins are fat: Mr. Widmann says he paid $6 apiece for two copies of the "Unabomber Manifesto" and sold both for twice that. A $1 copy of a text called "A History of Torture Through the Ages" sold for $26.
Mr. Widmann says he asked one of the bookstores he visits for a job, but they told him they weren't hiring. "That's fine," he says. "I make more money not working for them."
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Journal Link: Read selected excerpts from the new anthology "Floating Off the Page: The Best of The Wall Street Journal's `Middle Column' " at floating.
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