California Apparel News

When Steve Mazur encountered a lull in his income last year while waiting for his sales commissions to kick in, he hit on an idea that is now netting him $7,000 a month.

Mazur, whose father owned a chain of Southern California children’s shoe stores called Lee King, decided to buy shoes on sale and then resell them on eBay’s Web site, www.ebay.com.

“I thought if I could sell 100 pairs of shoes a week and have a net profit of $20 a pair, I’d be happy,” said Mazur, who lives in Yorba Linda, Calif., with his wife and two sons.

“I started sourcing shoes at Foot Locker, buying a large quantity of shoes that were on sale and then had been marked down another 20 percent,” recalled the salesman, who works for Atlanta-based Certegy Inc., a provider of credit- and debit-card processing and check-risk-management services.

At first, Mazur targeted shoes for teens. But when many of those teens failed to pay their bills, he quickly switched his demographic to adults above age 25 who might be looking for good running or athletic shoes at a discount.

“I started this thing as a lark,” he said, noting that he, his wife and his 18-year-old son spend 50 hours a week on the project. “Now we’re shipping 200 pairs of shoes a week.”

Mazur is one of the thousands of individuals who are finding that the 8-year-old online auction site is a great place to sell apparel, shoes and accessories and make a profit.

In 2002, eBay clothing, shoes and accessories sales grew 64 percent and now gross $420 million—11 percent of total online apparel sales.

“We sell across the board, new and used items,” said Lily Shen, senior category manager for eBay, which is based in San Jose, Calif. “Fifty percent of our clothing and shoe categories are new items, compared with 15 percent two years ago. One of our fastest-growing categories has been vintage, which is one of the popular trends right now.”

In June, Nielsen/NetRatings ranked eBay’s clothing, shoes and accessories category as the No. 1 fashion site in terms of unique visitors and page views.

With apparel sales going up, eBay is putting even more emphasis on this category. It recently announced that Constance White, a fashion journalist who worked for The New York Times, would be the Web site’s style director and fashion spokesperson. Through online editorial content, she will help educate consumers about fashion finds and trends.

EBay’s success in getting consumers to bid on apparel is a sign that shopping for clothes on the Web is becoming as acceptable as ordering through a catalog.

Forrester Research Inc., a technology research company in Cambridge, Mass., predicts that online auction sales will grow from $13 billion in 2002 to $54 billion in 2007.

“To date, auction sales have been driven by fanatics, but they will be fueled by mainstream shoppers in the future,” a Forrester Research report noted.

Sales of auction mainstays, such as computers and collectibles, still account for about half of all auction sales, the research company noted, but apparel and other categories are growing.

Forrester Research expects online auction sales of apparel and footwear to grow from $1 billion in 2002 to more than $3 billion in 2006. It also expects a large increase in the linen and home deacute;cor sections because these items are well suited to online auctions.

The home deacute;cor, linens and appliances category has been the strongest area recently for Overstock.com, a Salt Lake City company that launched in 1999 to sell excess inventory at prices 40 percent to 80 percent below retail. The second- best categories for the company’s Web site, www.overstock.com, have been computers, electronics, and jewelry and watches. But apparel and accessories are growing.

“We get contacted by all sorts of people with excess inventory and have discovered places where we can buy overstock and closeouts with good names like Gucci,” said Patrick Byrne, the company’s founder, chief executive and chairman. “On the market side, the first wave of purchases was in books and CDs. We expect the next wave to be in apparel.”

Another Internet company that has been heavily into apparel is New York–based Bluefly.com, which sells first-run, brand-name apparel at discount prices. Founded in 1998, the company has seen consumers slowly accept the idea of buying apparel on the Internet at its site, www.bluefly.com.

“Consumers have understood buying apparel through catalogs, but it has not been until recently that apparel has been one of the largest categories on the Web,” said Kenneth Seiff, founder and chief executive of Bluefly.com, where apparel discounts average about 60 percent off retail prices. “It has to do with the shift in the Web demographics. At first it was very male-dominated. They were buying more technology products on the Web. As the Web has become more democratized, more women are shopping and more mainstream categories, such as apparel, have become successful.”

Selling apparel online has been a successful way for jobbers and liquidators to make more money than they do selling to discount stores. Two years ago, when Richard Lunt was buying trailers of apparel and shoes from Federated Department Stores Inc., parent company of Macy’s and Bloomingdale’s, he decided to sell the shoes from his lots on eBay.

Working out of his Los Angeles office, he now does 1,000 to 1,500 auctions a month of shoes and purses and employs four people.

Lunt said he grosses between $16,000 and $40,000 a month. But it hasn’t been easy. About 30 percent of his customers do not pay after winning a bid. With a little arm-twisting, he gets all but 5 percent of them to comply with the deal.

“The e-mail is daunting—there are 300 to 400 e-mails a week to answer,” he noted.

And then there are the eBay rules and policies. Lunt said that if a buyer does not pay for an auctioned item, the seller has to pay eBay’s filing fee again. He believes the filing fee should be free.

“Ebay doesn’t feel the sellers’ needs sometimes,” he said. “We are the worker bees, and they just supply the hive we work in.”

And with more sellers entering the field, Lunt’s early success has tapered off somewhat. Where he once could turn 100 percent of his inventory online, “now it’s dropped to 50 to 60 percent due to competition,” he said.

Still, Lunt concedes: “It is a great way to move excess inventory. There’s no doubt about that.”