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For the absolute beginners to online commerce I always recommend a visit to eBay. EBay is the largest online marketplace and a perfect place to develop the basic skills required to begin trading on the Internet. You don’t have to even find a market or do much marketing. All the tools are there to build a simple sales page (your auction) and with eBay’s dominance of the online auctions industry you have literally millions of consumers ready to buy whatever you have lying around or choose to specialise in.

EBay has long had a significant proportion of full time sellers, those that make their income running an eBay store. Some source products from wholesalers or dropshippers, others manually collect goods from thrift shops or real world auctions or manufacture the goods themselves. These people are in essence are running online businesses but leverage the popularity of eBay to make finding an audience that much easier. Who needs to worry about marketing when you can tap a bloody massive market that has been growing successfully now for almost a decade.

Early on eBay realised that the power-sellers (full time auctioneers) made up a significant proportion of it’s income and went to work making it easier to become a power-seller by providing more tools and advantages to people that listed a lot of auctions. They heavily marketed the power-seller possibility hoping to lure more people away from their day job on to eBay as full time sellers. Would you like to work from home on your computer for a few hours a day buying and selling, perhaps earning more than you did before or at least close to it and leave the 9-5 grind behind? Lifestyle freedom is not a hard sell, especially when a lot of people hate their job.

The beauty of eBay’s model is that supply and demand should equal price. Unfortunately though with the surge in popularity and the global exposure eBay has enjoyed the sellers have come thick and fast and consequently the price has dropped and along with it, the profit margin. Of course that’s not to say that you can’t make a profitable business on eBay but it’s just not going to be quite as easy as it once was because EVERYONE is doing it.

The saving grace, just like with standard off-eBay online commerce, is that an educated businessperson can win against the uneducated. The same rules apply on eBay as they do on any website business.

• Your sales copy must sell and copywriting skills will give you an edge, especially in auction titles.
• You must differentiate yourself from everyone else by working to position yourself as the specialist or “trusted source”.
• You must be seen in all the right places (the right categories in eBay’s case).
• Your customer service must be better than good.
• You must be patient and persistant, time rewards an eBay merchant just as any other online merchant.
• You must test and compare to maximise results. Try different auction formats and see which works better. Test “buy it now”, test using a reserve, test without a reserve, test different opening prices combined with reserves (interestingly a $0 opening bid generally leads to a higher final price compared to starting with a minimum price).

While I personally stopped using eBay to make money a long time ago I still think it’s one of the best places to polish your techniques. If you have never bought or sold online before and you intend to learn about online business in the hope of either supplementing your income or trading your job for an online business or private practice then I strongly suggest getting into eBay.

Learn how online auctions work. Learn how payments work with Paypal.com, the most common form of eBay money exchange. See what the power-sellers are doing. See what items sell the most. Complete a sale by selling some of your junk lying around at home to see what it’s like to provide sales support and customer service. It’s all very good experience and you might even make some money doing it. Heck you might even decide eBay is the way to go permanently.

But how easy is it to make a full-time living from eBay? I’m speaking to Wilson because I’ve decided to spend a month finding out, and I’m looking for tips. Firstly, I’ve learned the importance of wording (”To list something as ‘beautiful’ or to say ‘look!’ is a waste of a word, because that’s not what people will be tapping into the search engine,” he says). Clever categorisation is essential (”Put your monogrammed Seinfeld golf balls in the ‘Comedy’ section first, ‘Sport’ second”). And, although it seems obvious, don’t end your auctions at 3am, when nobody will be around for a frenzied bidding war.

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For the first time, I feel almost like an authentic eBay seller, buoyed by the knowledge that I will be selling my haul in the world’s most democratic marketplace. On the way out of the auction, I get chatting about eBay to a nice young couple who have lucked out on an Eames Recliner. “And you make a full-time living from it?” they ask me.

“It’s certainly full time,” I reply, “but whether it’s a living is up for debate.”

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How much niching can you handle? The long tail has been mentioned on my blog many times - the concept of millions of markets selling hundreds rather than hundreds of markets selling millions. It’s also clear that although the Internet is a global technology, the localisation factor is paying dividends and search engines are working hard to provide local search. Niching and localisation go hand-in-hand; one of the best ways to niche a market is to localise.

So how will localisation, niching markets and the long tail all work together to change our future?

Take the music industry. Right now it’s a short tail. A handful of artists sell millions of records. They are heavily promoted by a handful of record companies that make millions of dollars.

The Internet is changing that. Music distribution has the potential to benefit from a long tail effect online. That’s a good thing for artists.

It’s reasonable to assume that as time progresses music distribution will occur online more than through any other means. CD’s will be a thing of the past, but we’re not quite there yet. ITunes is good, but it still focuses on mainstream music and Apple has to buy the rights to the music from the big record labels. It sells mostly a short tail of music, millions of the same few tracks.

In the future a service like iTunes will be for music what Amazon.com is for books. Amazon operates in a long tail. Millions of different books sell a lot more combined than the top selling individual books. So while bricks and mortar bookshops make the most from top selling books because of limited capacity and scope, an online store has an inventory of millions and has the capacity to cater to millions of tiny markets and consequently makes more money from the total sales of a millions of different books rather than a select few.

The music industry is a huge economic divide. How about this for a gap between the rich and poor - a few thousand artists are living the dream, world-wide celebrities with fame and fortune, while millions of musicians struggle to make a living and work part time “real” jobs while they attempt to get their music careers going. It’s not a happy picture for someone who’s passion is music and should be playing and performing for a living.

In the future independent artists will be able to do what most successful small business Internet entrepreneurs do now - niche and localise their market. Most artists may not become multi-millionaires, but by marketing locally they will be able to establish a niche following. As search engines and content delivery methods become more and more individually tailored, localised and instantly delivered, services like iTunes will be like Amazon, offering a massive inventory of unsigned independent artists compared to the few thousand CD’s available at your local HMV. Better still, distribution will be instantaneous with tracks downloaded and consumable on demand, taking instant gratification to a new level.

Picture this: You are down at your local club listening to a local indie band. You hear a track that just goes off, you love it. You just have to have the track. You pull out your next-gen web-wired iPod music player, log onto iTunes portable, input the band name and have instant access to their entire catalogue of tracks. Over the course of the evening you listen to six different bands and purchase a track or two from each. You spend about $15 on music that night. So do a few hundred of the other people at the gig. Each band walks away from the evening with a few thousand dollars of direct sales.

Back at home later that evening you log into iTunes and check your recently purchased track listing. In the listing for each purchase you find recommendations for other artists and tracks you might enjoy, including recommendations directly from the artists themselves. The gypsy band you heard last night draws inspiration from an all girl rock ballad group. You sample their tracks and buy a few. You browse through listings of what other people purchased if they also liked the tracks you bought and find a few more gems.

It’s the ultimate in social-networked, localised, niched, instant gratified and personally tailored music distribution.

Better still it spreads the wealth around so more artists can make a living doing what they enjoy and less money is funnelled off to the big record label marketing machines. Instead of slaving away at hundreds of free gigs, working like a dog to spread the music for no monetary reward, artists operate like micro-businesses and earn direct rewards for their output. Something is not right when an artist has to do hundreds of free gigs in the hope of being picked up by a label that is just going to commercialise their music, take a stranglehold on their image and take a huge chunk of their future earnings.

The future of music presents an opportunity that is a win-win for artists and music fans. Artists gain the potential to make a living from their work and control exactly what happens to their career and image. Fans receive exposure to a much greater variety of music choices and will no longer be hand-fed mass-media commercialised music by iron-fisted profiteering corporate institutions.

My only wish is that it could happen a lot sooner than it appears it will. We need to hurry up and strip the powers away from the old record labels. They’ve had too much control for too long and they are not adapting to the future. Innovate or die.

Yaro Starak
Music Fan

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Rick Aristotle Munarriz from the Motley Fool thinks that Google may be the next music distribution giant.

Fool.com: That’s why I believe that, years from now, the major labels won’t be the same batch of old-school vinyl pushers you see today. As ludicrous as it may seem, I think that the real power brokers in the music industry will be Google (Nasdaq: GOOG), Yahoo! (Nasdaq: YHOO), and Microsoft (Nasdaq: MSFT).

Oh, they don’t even know it yet. It may be years before they even come around to connecting the dots, but they will connect those dots. That’s because those three companies are the ones leading the way in localized search.

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Here is another business idea from Yaro’s notebook of business creativity. As usual if this idea inspires you don’t be afraid to steal it, modify it or do anything you like with it. It is completely open source and I’d love to see it put into action. Or perhaps if you know of a business already operating in a similar manner to this idea, please feel free to point it out in a comment reply.

Car Advertising

I had this idea back when I was studying at university after getting my first car, a secondhand white Mitsubishi Cordia (this car later died in a car accident, may she rest in peace). Many small business owners already detail their car, van or business vehicles with their logo, phone number, web address, email etc. Pizza business are a good example - their fleet of vehicles are covered in branding and may even feature unusual augmentations such as a giant phone on the roof of the car that draws attention to the vehicle.

A car is a great advertising tool because it has such broad exposure, it’s like a mobile billboard, and some clever people have taken this one step further and created mobile billboard services. It’s quite common to see mobile billboard advertising vehicles driving around my city. You may have seen large trucks with a full size billboard in the back and even little mopeds/scooters, often travelling in groups of three (they travel in packs), pulling little billboard trailers promoting the latest softdrink or fashion label.

Many-to-Many Car Advertising

I came up with the idea to establish a many-to-many business model to provide car advertising services that would provide income to students as well. This was before mobile billboard businesses existed, at least in Brisbane, Australia. At the time I had no specific comprehension of what M2M was, I just understood that for scale efficiency on both the supply and demand sides of the business equation that this sort of model was the way to go.

In a nutshell this how I envisioned the business would work - Students, or people in general, could offer their car to be detailed with an advertisement from a corporate sponsor. In return they would be paid a once off fee, or a monthly fee, depending on the arrangement with the advertiser. The business would act as the middle man, coordinating the sale of advertising space, the detailing of cars, signing up new cars and controlling campaigns. The business model provides access to a potentially huge fleet of advertising vehicles limited only by the amount of advertisers willing to pay for the service. It would be possible to localise a campaign by grouping cars based on where the owners live or frequently travel, or even on the type of car (a fleet of four wheel drives for example) or even based on the model (VW Beetle for example).

Of course it would be necessary to ascertain any laws that might impinge on the business working, whether their are any restrictions on car advertising etc. The business would also need to coordinate quality control since perhaps certain advertisers would not want to see their brand associated with a banged up bomb student car.

Side Idea: Car manufacturers could possibly twist this idea as a method to reach the student market. Target early adopter students, offer them a heavily discounted or free new model car with the condition that the car is detailed with extensive advertising of the car/brand. You could possibly even wrap this idea up into a competition or promotion to give away a car or three during launch. I would imagine someone that just won a car or was offered a significant discount would be telling all their friends and driving the car around campus, to parties, everywhere, and the car would be a roving advertisement providing significant exposure and brand recognition.

Of course there is a fine balance to be kept between good branding/exposure vs. negative and this form of advertising would not be for everyone. It’s certainly has the potential to dramatically increase the exposure for a new product or service if handled well. Imagine a fleet of Mini Coopers driving around town plastered with imagery of the iPod Mini. That would certainly stir up some attention and repeat exposure.

Yaro Starak
Entrepreneur

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Most entrepreneurs are ideas people. They are dreamers, creative types that see opportunity in daily life. I liken the creativity of business idea generation to what an artist or a musician experiences when indulging in their craft. Thinking of new business ideas for an entrepreneur is like painting a picture or composing a song, it’s a creative process with much joy.

If you are like me you generate new business ideas almost every day. True a lot of it is day-dreaming, or business-dreaming, and you may never attempt or even intend to start the business but that doesn’t make it any less enjoyable to ponder the potential. I keep a text file of ideas that I’ve thought of over the years and for today’s blog post I thought I might share a few with you. Some of these may not be original because I must admit I have not conducted thorough research into the marketplace, I simply had a thought, expanded a little and jotted down notes. I have no problems sharing these ideas and if someone out there decides they want to pursue them by all means, go for it. I’d love to see them turned into successful businesses. I have my plate full with my own projects at the moment so most of these ideas are best left as business-dreams or future possibilities in my case.

An eBook Merchant Service and Online Retail Store
This idea I came up with while trying to think of many-to-many business ideas where I could bring together buyers and sellers in one place and leverage the unlimited market size potential (eBay style, and yes, this idea came shortly after finishing reading The Perfect Store). The idea is to provide merchant facilities for eBook authors to sell their books. The front end would be an Amazon.com style shop for eBooks with all the standard features such as user reviews and samples broken down by categories, top 10 lists etc. The back end would allow authors to write the blurbs and sales pitch for their book and also handle all document delivery, payment and processing of sales. In exchange for this service the business would take a small percentage from each sale. It would provide a place for anyone to sell their book, have an instant audience of buyers and not need to develop their own website to sell their information product. Of course the trick would be to get the audience, as always.

“What do you do with your life?” Blog
This idea I’m still quite keen on, but I’m not certain it’s necessarily got potential for profit, it’s more of a human interest project. I recently completed reading the book ‘What do I want to do with my life‘ by Po Bronson. It’s a book that collects stories about what people choose to do with their lives and how they came to be where they are. I’m a huge fan of the ultimate question, the meaning of life and I picked up this book hoping to learn from other peoples’ stories. The business idea would be similar to the book by collecting interviews both in text and audio casts from people that I could manage to convince to be interviewed. There would be set questions but I’d like it to be more of a story unfolding than a direct Q&A session, much like Po’s book. The potential for profit could come from compiling a book from the content and then publishing it or of course good old advertising revenue. In my mind I’d prefer it stayed as a not-for-profit that helped people to find focus and direction in their life by reading the stories of others, or at least not to feel so alone if they are a bit lost because there are a lot of other lost souls out there (most of the people I know seem to be!).

A Flirting Course
This idea came completely randomly and certainly isn’t new and original, but it’s an interesting story of dumb luck and the power of reputation. My father, Yaro Starak (Snr), is well respected in the Gestalt Therapy field and has been interviewed in newspapers, radio and television during his life for all kinds of reasons but usually because of his involvement in workshops and special events.

Recently he was contacted by the Courier-Mail, a mainstream Brisbane newspaper, to complete a piece about flirting. My dad had read a book on the subject and with little preparation created a quick course for the journalist and his friends to complete. As a result my father was featured in the article which turned out to be a showcase piece linked from the front page of the newspaper during the middle of the week.

Needless to say the power of this sort of PR is golden and combined with the runoff, which included radio interviews, my father was in a perfect position to start a flirting business. Unfortunately he was also due to leave for overseas just before the article went live so much of the hype died before he returned to Brisbane so he never really had a chance.

My idea was to run weekly flirting classes that would bring together equal numbers of guys and girls in the same age bracket to complete a short flirting course and then finish with drinks and a time for them to test their newly developed skills on each other. With the recent boom of online dating and the obvious inclination the press has to run with any article related to this industry I think the potential to leverage PR for a business like this is good. Plus I think the idea in general is a good one, combining education with dating so it doesn’t have quite the same social stigma as speed dating.

Yaro Starak
Ideas Man

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