eBay’s huge success can inspire others to replicate its business model and start their own auction site.
Alas, it is hard to follow eBay’s model where anything and everything can be traded on their site (within their guidelines, of course). Even Yahoo Auction, with all their marketing might and technology, can’t even hold a candle to eBay. None of the big auction sites – from Ubid to Overstock Auctions — can really claim to have anywhere near the customer base of eBay.
If you are thinking of starting an auction website, the key to success is FOCUS. Do not go head-on with the giant that is eBay — if you want your auction site to survive. I’ve seen some small entrepreneurs start an auction site, attracting very few sellers and buyers their sites look almost pityful. You’ll stand a better chance of succeeding if you focus on a particular niche.
Look at the wine arena for example. You have Winebid.com, CellarExchange.com, and other auction sites that are doing pretty well.
Think of a sector or a particular audience. For example, Playle.com is a small auction site for vintage postcard collectors.
Then find a good auction software that you can configure and customize to add features you’d like in your auction community. It is best if you yourself is a techie, or can have someone on board who knows how to troubleshoot and configure the software.
Unless you can make the software yourself, expect startup capital to be around $10,000 or more. You’ll need robust and scalable hosting, one that can handle 100 to 100,000 users on the fly without crashing — and those don’t come cheap (dedicated servers start at $99 per month and up).
There are very successful niche auction sites out there. Study how they are done, and copy the aspects that worked well for them.