Hammer Time!

2: Decide Where to Sell

From great white sharks like EBay and Yahoo to anchovies like Go Network Auction and Auctions.com, auction sites are proliferating. Hundreds of places let buyers bid at the blip of an electron. But if you're new to the game, you should settle on one auction site to start with.

Evaluating auction sites isn't simple, however, because of their sheer number and because uncovering differences between sites can be tricky. In appraising a site, consider the following traits.

Cost: You wouldn't sign a lease for a brick-and-mortar store without knowing the bottom line, right? Use the same approach with online auctions. Tally the listing fees--the nonrefundable charge for placing an item for sale (usually 10 cents to $2)--and then factor in the commissions. The latter run between 1 and 5 percent of the item's selling price, depending on the size of the winning bid. Compare costs by calculating the house's commission on an average-priced item. EBay's rate is among the highest, while Yahoo's is the lowest: zero.

Customer service: Responsive customer service is essential. To test a site you're considering, submit a query by e-mail or telephone and see how long the reps take to respond. Most of the sellers we interviewed praised Amazon's support, which includes a toll-free phone number and a live rep on duty around the clock. On the other hand, auctioneering message boards are rife with complaints about Yahoo's poor support (Yahoo doesn't provide an e-mail address specific to auction queries). Check a site's help files, too, since newbies won't bid if they can't figure out how the process works.

Feedback: With feedback ratings--report cards where buyers and sellers grade each other--you can find out whether buyers bidding for your wares are deadbeats, and learn the procedure (if any) for challenging a buyer's unjustified criticism of your after-sale performance. EBay, which pioneered online auction feedback, has the most robust mechanisms in place, including a clear but narrowly defined policy for removing false or misleading feedback. Other auction sites copy EBay's feedback system, in spirit if not in specifics.

Form and function: Most big-time sites load quickly and are easy to use. EBay looks cluttered--perhaps that's part of its charm--whereas Amazon's auctions resemble the classy sections where the company sells its own wares, but both pass the form and function tests. The rest fall between those two extremes, though they lean toward Amazon's sleeker look. The search engine is another important factor: Buyers need to find the best deals easily.

Inventory: Since auction volume correlates to active buyers, you'll want to check the number of listings at a site. EBay takes the prize again, often holding more than 4 million auctions simultaneously. Go Network Auction, on the other hand, had a modest 1600 listings when we visited; that's fewer entries than in EBay's bicycle category alone. Use the site's search tool to find auctions featuring the kinds of products you plan to sell. If you fear getting lost in the shuffle at EBay's high-traffic auctions, visit less-active sites such as Auctions.com and Go Network Auction.

Price breaks: If you plan to use high-volume sellers, price breaks can be very helpful but tough to find. For instance, Amazon offers a Pro Merchant Subscription for $10 a month plus a $10 setup fee, with no posting costs. Given that its usual fee is 10 cents per listing, if you put up more than 100 items in a month, you save money. Auctions.com also charges sellers 10 cents per listing, and it levies a flat 2.5 percent commission on all sales. At Yahoo, the whole process is free, but sellers are stuck with bare-bones customer service.

Sellers' tools: An array of sellers' tools can make one site stand out from another. If you want to list many items at one time, demand a bulk loader (for definitions of this and other specialized terms, see "Glossary: Learn the Online Auction Lingo"). Most sites have one, though Go Network Auction doesn't. EBay's Mister Lister tool is only available to businesses that have been selling for at least two months. If your business sells lots of unique products, you must fill out each list form individually. Other tools, such as personal watch pages for monitoring ongoing auctions, are available at all six sites. At Amazon's ZShops, you can sell fixed-price items--in large quantities--to the same folks who buy at the site's auctions.

Traffic: You can estimate a site's traffic by looking at the number of auctions it conducts and how often buyers bid. The 800-pound gorilla here is EBay. According to data from Web measurement service Media Metrix, EBay attracts more visitors than any other auction-only site in the world. Other high-traffic sites include Amazon, Yahoo, and the FairMarket Network, a consortium of big Web portals such as Excite, Lycos, and MSN.com.

And try evaluating a site from the other side. As Perry Calton says, "Spend some time buying. Find out what it's like."