eBay and Free Stuff

In my previous blog I talked about how I was a big fan of the Google business model (i.e. provide a free service that creates a high traffic community and make your dollar off advertising fees collected from big companies). This model has been proven to work over time by Network Television and Radio. Beyond that not many businesses have exploited this theory until late. Now Google, Facebook, News Sites (CNN.com, ESPN.com, etc), Message Boards, AIM, and others have provided free services using the internet to exploit advertising.

I discovered a different model over Christmas Break while on eBay searching for Rose Bowl Champs memorabilia. In my search I came across an Austin American Statesman Newspaper with a full front page photo of Cedric Benson and Derrick Johnson on the field after the game with confetti falling from the sky. The bid for the paper was at $15 with a day or two remaining. I thought this was ingenious, taking something that you can get for free or that you normally would just throw away after using and sell it on eBay. It sounds simple because it is simple but it can prove to be very profitable.

After coming back to school, I started thinking about what kind of free things or things I would normally use and throw away that other people would potentially buy. About 70 universities across the country get Sports Illustrated On Campus, which is a small Sports Illustrated focusing primarily on college sports. The magazine comes free in the University student newspaper ever Thursday. My idea was to go to newspaper stands on Thursday nights and collect all the left over SIOCs and sell them on eBay. Since they are rare and only available to college students, many people such as alumni of a particular school that may be featured on the cover who have no way of getting the magazine will bid for them on eBay.

Over the past couple years I had bought a handful of things on eBay, mainly vintage Sports Illustrateds that featured University of Texas on the cover, but I really overestimated the difficulty in setting up an auction and selling. I started the bidding at $1.99 plus $2 shipping and handling and stole a lot of the formatting techniques from other magazine auctions. Now a $3 or $4 sale may sound petty but it took such little work and there was no expense for the magazines so it was 100% profit.

Fast forward a couple months. The bang hit the night of the UNC-Illinois National Championship. I was definitely cheering for the Illini because I have two family friends that are Illini alumni and I felt they proved they were the best team in the country throughout the regular season and Big Ten tournament. Fortunately, they lost and my little eBay business took off. Sometime in February the SIOC cover featured the Duke-UNC mascots on the cover proclaiming the rivalry the best in college basketball. Apparently that goofy billy goat in a Tar Heals Jersey on the cover of a SIOC is the hottest commodity in the state of North Carolina. Usually I post a bid every 3 days but with magazines selling for anywhere between $12-$20 a piece I started listing them so that one would end every day. In the 7 days after their national championship win I sold 9 magazines (a few were on second chance offers to losing bidders). Another magazine featuring Lebron on the cover also picked up steam during the tournament though not at the same rate as the UNC cover.

Once I started selling on eBay my mindset became very different. Now when I see free handouts at basketball and baseball games or in the newspaper or anytime I go to throw something away instead I have a different train of thought. Usually I would think I read this or used this and I no longer have a use for it so I will just trash it, but now the thinking is I may no longer want this but does somebody else. If somebody else wants it than it very well could potentially be profitable and therefore is worth picking up or keeping or whatever.

For those of you who go to schools who get SIOCs you're probably thinking why would someone reveal this idea when someone else could so easily repeat the same thing. And you'd be absolutely right; anyone could do this same thing and cut my bids in half. But I see two reasons why this wouldn't happen. First, that would be shady but hey who cares. Second, its not just good ideas that bring in the money. People have good ideas all the time but its the initiative to bring the ideas to reality that makes or breaks the project.

One a side note, Cuban had another very interesting blog about the approaching death of the PC era. Check it out blogmaverick.com

"The secret of getting ahead is getting started"

hj

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