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»  October 8, 2008

Politics  

Making a Killing on eBay

Nicole Belle at Crooks & Liars notes Sen. John McCain's float of former eBay CEO Meg Whitman as a Treasury Secretary in a McCain/Palin administration during the debate last night.

I like Meg Whitman. She knows what itís like to be out there in the marketplace. She knows how to create jobs. Whitman was CEO of a company that started with 12 people and now, 1.3 million people in America make their living off eBay.
I've commented elsewhere about the validity of that 1.3 million figure, but Daniel Gross took a more in-depth look at it at Slate back in May, after McCain had claimed that "1.3 million people in the world make a living off eBay."
The number can be traced to a 2006 study conducted by ACNielsen on behalf of eBay. The company surveyed eBay sellers around the globe, including 2,000 in the United States. And it concluded that "approximately 1.3 million sellers around the world use eBay as their primary or secondary source of income," with an estimated 630,239 in the United States. Take careful note of the phrasing, however: primary or secondary. That could mean 50,000 use eBay as a primary source and 1.25 million as a secondary source. Or it could mean the split is closer to 650,000-650,000.

EBay doesn't break out the numbers, but it's a safe bet the reality is closer to the former. Even the minority of sellers who meet the company's "power seller" requirements aren't coming close to "mak≠ing a living" selling on eBay. To reach the lowest level, bronze sellers must rack up $12,000 in sales (sales, not profits), or move 1,200 items over the course of a year. "A bronze-level power seller isn't making a full-time living on eBay," says Cindy Shebley, who began selling on eBay in 1999. "They have to really crank it up and get into higher tiers, like titanium." Levels rise from silver ($3,000 or 300 items per month) to Titanium ($150,000 or 1,500 items per month). Shebley is a silver-level seller (mostly photography and lighting equipment) but says most her income comes "from supporting sellers as a consultant and a teacher." Shebley teaches classes and is working on a new book, How To Market an eBay Business.

It's an astounding tribute to the strength of the eBay model that in the face of the looming worldwide recession the number of Americans making a living off of selling stuff on the Internet has gone from "most" of 1.3 million in the spring to an actual 1.3 million as of yesterday, at least in the telling of John McCain.

Then again, if Gross' analysis is closer to the actual truth, it's just another example of McCain's tenuous grasp of economic reality.

Wed Oct 08, 2008 13:45 -0700