Hammer Time!

1: Are Web Auctions Right for Your Business?

Your business is booming, but you want it to blow the doors off. Yet you've tapped out the local market, so there's not much left to squeeze from your current customer base without relocating. Online auctions sound enticing, but how do you know if they'll work for you? To find out, match your business against these profiles of a successful online auctioneer.

You sell to consumers, not to businesses: Though business-to-business auctions are taking off among companies that want to buy or sell raw materials, businesses that sell direct to the public should pay attention to the numbers that count: potential customers. These folks frequent consumer-oriented auction sites like EBay, Yahoo, and Amazon.

Your products have auction appeal: Auction experts like Dan Neary, vice president of marketing and sales at AuctionWatch.com, an independent Web-based company that provides auction services, say that certain goods do better than others. Prime candidates include collectibles, electronics, and items with narrow but intensive appeal like Bernstein's rare books. On the other hand, with millions of potential customers passing by, such commonplace goods as cookware and furniture may find an audience as well.

You already have an e-commerce storefront: No doubt about it: Online auctions are a fairly painless and inexpensive way to get into e-sales if your current business is strictly a brick-and-mortar operation. To make the best use of auctions, though, you'll want an e-store of your own that can direct customers to your nonauction inventory and strengthen your credibility in buyers' minds.

You're comfortable with the Web: It may seem obvious, but you have to develop some familiarity with the Internet to launch, stock, and maintain your business's online auctions. Most tools you'll use for creating and managing auctions are Web-based, too. If you're more comfortable scribbling in a ledger than working with a Web browser, steer clear--or hire someone to do the work for you.

You have time: You may dream of gathering your overstock at 10 a.m. and selling it by noon, but the reality is considerably slower. Running online auctions can burn up hours of work, even if you use auction management software to ease the chore of large-volume selling. If you don't have spare time to invest in this selling tactic, stick to your retail store.