Just wanted to clarify my position here.

Focusing locally is not "Taking on" anything, it's just focusing locally. Think of a corner store market and a chain of supermarkets. The corner store is not even in a class to compete or take on the chain and even though it is focused locally the chain still dominates the local market. Does this mean the corner store should close up shop? Only if it is operating at a loss. Since its expenses are considerably lower, the corner store can still operate on the customers it does get because the cost of doing business is lower.

I think classified ads are a good place to start only because you can focus your marketing. For instance, asking people why they took out the ad as opposed to Ebay would yield tremenedous benefit in focusing your services and discovering your niche. The good thing about the classified ads is the contact information is already printed. Get a book on putting together suveys and either mail or call people to find out why they didn't use Ebay. You could even post an ad in the classifieds section asking for poeple that posted the ads to call you and receive a dollar for completing your survey, because after paying to have an ad you can be sure that they are going to look at it. Who doesn't?