Legos: A Moneymaking E-Business?
December 20, 1999

About a year ago, Heidi Le Vell shelled out $1,000 to buy 24 cardboard boxes filled with nothing but Legos. Over the next couple of months, she assembled those chunky pieces of plastic into organized clumps and periodically sold them on eBay for a total of $15,000.

Her husband, who first thought his wife was nuts to blow $1,000 on something as ridiculous and puerile as Legos, didn't quite know what to make of it. Neither really did Le Vell. The Legos were among her first sales on eBay and she never expected them to fetch quite as much as they did.

"I knew I could get $4,000, but this was amazing," says Le Vell, who lives in San Jose.

After that, it only got better. Le Vell wasn't working at the time, so she threw herself full time into selling on eBay. Every week, she'd go to real-world auctions and estate sales around the Valley, buying things like glassware, books and various unique knickknacks. Then she'd turn around and offer the items up on eBay for terrific profits. At her high point about six months ago, Le Vell was pulling in $15,000 a month. In pure profit.

Finally, somebody making money on the Internet.

It's not just Le Vell; she's the tip of the iceberg. Believe it or not, there's a whole new subculture of people selling tons of goods on auction sites and making more money doing it than you'd ever imagine they would be. We're not talking about the occasional few hundred dollars you'd get selling your collection of old movie posters or the furniture lying around in the attic. We're talking about people who've made selling on eBay their primary business and are making tens and hundreds of thousands of dollars doing it.

They're being called power sellers and eBay defines them as people who sell between $2,000 and $25,000 of goods a month. So far there are 22,000 of them on eBay and the numbers are expected to keep growing.

And where there are new markets there are startups. Andale has been founded and funded ($20 million from Mohr Davidow and Accel) on the idea that people who sell $10,000 worth of goods a month need help keeping track of it all. After all, power sellers often juggle many auctions at once across multiple auction sites and managing all the details can be a considerable chore.

When it launches this week, Andale will seek to save power sellers lots of time by offering them the ability to automate their selling. For a small transaction fee, Andale will put items up for sale, automatically calculate tax and shipping costs, generate invoices, provide credit-card services and do basic financial accounting. The idea is to let power sellers be more efficient and strategic so they can sell even more. Le Vell met 26-year-old CEO and co-founder Munjal Shah at a barbeque this past summer and she's now working for him. Her title, one of those silly monikers you find only at tech companies, is "customer evangelist" and most of what she does is communicate with power sellers like herself and help Andale figure out what exactly these people want from an auction-services site.

Le Vell continues to sell on eBay and last month pulled in $7,000. She's had to scale down her selling a bit, since working at Andale has meant taking on startup hours. On weekends, though, Le Vell continues to go to auctions around the Valley and hunt for unusual items that she can resell on eBay. Usually she finds no shortage of underpriced goods which someone somewhere will buy on eBay for four times her outlay. If she ever does run out of things to buy, though, she's still got some of those Legos left in her garage.