May-June 2005 Selected Content
The eBay Experiment - Donna Marie Wallace
"No way," I repeat, as my eight-year-old son, Zach, once again begs to bid on a super-rare Yu-Gi-Oh card on eBay (www.ebay.com). This is a dramatic scene we relive several times a day. It's a comical reproduction of the classic Bill Murray film, Groundhog Day, minus the commercial interruptions.
"Aw, Mom," he answers in an "aw-shucks" manner. I can almost see him slap his thigh in frustration. But his attention has already been captured by another auction: a mint-condition jewel-toned Yu-Gi-Oh tin. Brand new and unopened, this item promises to be a fast seller. Or at least my Japanese-anime expert seems to think so. Judging by the number of bids, I suspect that this may be true.
In an age where soccer is king and video games have stolen the attention of millions, I am completely mystified by the eBay/Yu-Gi-Oh craze. Factoring out peer pressure, glittering anime and fancy jargon, Yu-Gi-Oh is reduced to a strategic game of cards. I console myself by considering the possible educational values behind this craze. First, there's the considerable amount of memorization involved. Certainly these skills will come in handy at some point. Second, there's the in-depth analysis involved behind every move. My child spends hours contemplating the consequences of each possible scenario. Maybe there are some good qualities, after all.
But eBay is another matter altogether. While I personally feel that eBay ranks right up there with chocolate-chip ice cream, I'm still the grownup in the household. I draw the line at allowing my young son to set sail on any part of the Internet, let alone make any financial decisions.
But this is a losing battle.
After arguments and lectures galore, Zach is still determined to join the online generation. My attempts at reasoning are futile. I've given the "you're a kid" lecture. I've talked about the dangers of the Internet. We've discussed the principles of financial responsibility. We've even reviewed Internet safety in depth. But, my rational adult logic is no comparison for his youthful exuberance, not to mention his convincing blue eyes. One look into those pleading pools of blue and it's all over: He knows he has won.
Thus, "The eBay Experiment" is born.
Determined to keep some form of parental control, I set the ground rules: (1) This is an educational experience and requires substantial research. (2) This experiment is limited to selling only; there will be no bidding on other auctions. (3) All Internet communication must be approved by a parent. (4) Every financial aspect must be accurately recorded and analyzed.
Zach enthusiastically agrees, and my young entrepreneur is in business. As a self-proclaimed CEO, his first duty is to appraise every Yu-Gi-Oh card in his vast inventory. Each candidate is delicately cleaned, analyzed and placed into a protective, plastic sleeve. Only 1% will make the final cut and qualify as potential products.
After the best candidates have been chosen, it's time to move on to the next phase of our project. Zach sets his inventory aside, and he delves into his marketing plan. He scribbles small notes on a scrap of paper, while I lecture on the importance of business ethics. His head bobs enthusiastically. We agree that honesty is crucial; each card must be described in detail, down to the smallest scratch. The word "mint" is banned from the auction vocabulary (as I am still fuzzy on the official definition of "mint" when applied to Yu-Gi-Oh cards). And we create our own little "fine print section" to be included in each auction. Eagerly, Zach jumps to his feet and sets off to complete his advertising mission.
Hours later, my prodigy displays his handiwork--a perfect representation of my requirements. He has created a masterpiece: a detailed description of each saleable product. The description has been edited to include every last detail---down to tiniest bend in the corner of a card. Accompanying each page is a high-quality digital image. (Apparently my husband has been recruited as a pro bono photographer.) A mother could not be more proud.
As I upload this information to the auction site, we discuss the pricing structure. While his initial thought is to begin at an outrageously high price, I suggest we study our market. Thus, we set out to search past auctions; we are specifically looking for the starting bid price, the number of bids and the ending bid price. After much review, Zach comes up with a reasonable plan: his strategy is to offer a quality product at a low price. He decides the strategy would work best if we start multiple auctions at the same time. By enticing customers with an attractive price, we hope customers will bid on multiple auctions, minimizing their shipping costs. His auctions are a great value at 99 cents.
But we've learned something else, too, during my son's comparison of bestselling Yu-Gi-Oh cards and no-bidder auctions. We are intrigued by an interesting difference in the auctions themselves: when an auction title includes both the proper spelling and a common misspelling, it is more likely to be viewed by potential bidders. Thus, spelling the auction name wrong could be a potential benefit!
Our financial analysis is equally entertaining. We spend quality time together, developing a detailed spreadsheet focusing on all critical factors: initial inventory cost, auction fees and shipping costs. Broken into several categories, this spreadsheet offers unbiased insight into each transaction. Once our experiment is complete, we can analyze our business plan and determine its success or failure.
With all our ducks in a row, we decide to list the auctions. Now, we just wait.
The next few days are excruciating. Time crawls by, but my son can't help but hover over his little babies. He anxiously checks his auction results every ten minutes. While his impatience is amusing, I still feel a twinge of empathy. To an eight-year-old, five days can seem like an eternity.
So an eternity later, we set out to watch the final minutes of our experimental auctions. Impatiently, we hit the "refresh" button again and again---hoping an innocent bidder will come along and make our day. But as the clock counts down, no last minute bidders show up, and the price remains the same. The end of the auctions was sadly anti-climactic.
But the anti-climactic ending is offset by the incredible success of the auction. Our "market research" showed the Yu-Gi-Oh cards would only result in a small profit for us, but our auctions are actually much more successful. Two of the auctions end over $5, and a third auction ends over $15. To my young son, the net gain is equivalent to hundreds of dollars. His auctions were a success!
Some may scoff at our unconventional approach, but I am extremely pleased with our results. My son has a newfound respect for market research and fiscal responsibility. He's learned that the success of a business depends on hard work, analysis and dedication. Most importantly, Zach's hands-on experience has taught him a valuable lesson: Work hard, and live honestly.
It's the American Dream.
© 2005, Donna Marie Wallace