Piggybacking on eBay
Published 9:00 pm Saturday, October 4, 2003
BERKELEY, Calif. – Joan Spiegel, a retired psychologist who admits to being an Internet neophyte, was intrigued by the idea of selling some framed prints on eBay without any technological hassle.
Standing inside a store in Berkeley, she listened to a clerk explain that everything would be taken care of for her. For a commission, the store’s staff would take photographs of the prints, list them for auction on eBay, respond to questions, collect payment and ship the prints to the winning bidders.
“I’m going to bring in one print and try this out,” Spiegel said, delighted with what she heard from the clerk.
Welcome to one of the latest businesses to piggyback on the eBay phenomenon: the eBay drop-off store. These shops allow the public to wash their hands of auctioning unwanted items online by having professionals do it for them.
Several eBay drop-off stores have opened nationwide over the past few months. They are owned by entrepreneurs who believe that there’s a big appetite for such a service.
The question is whether the public really wants their help. After all, eBay is already deluged with users, making it one of the Internet’s biggest successes.
Kevin McGinnis, who co-owns Berkeley’s Picture It Sold with his wife, Erin, said that the lure of his shop is the convenience.
“Buying on eBay is easy, but selling isn’t,” said McGinnis, whose store opened in August. “There are many more impediments. You have to be really well-acquainted with a digital camera, and you have to be acquainted with a computer.”
Auctioning items on eBay on behalf of others isn’t a new idea. People have listed merchandise for their family and friends for years.
Professionals have filled a similar role for a commission. eBay estimates that there are nearly 25,000 of these so-called trading assistants, who generally work at home and are self-employed.
Business liquidators are another niche. They auction unwanted items on eBay for other companies that are downsizing or upgrading to new equipment.
The clear leader in the nascent eBay drop-off field is AuctionDrop, based in San Carlos. It has opened three stores so far, in San Carlos, Menlo Park and Los Altos, with the help of $3 million in financing, most of it from private investors led by Mobius Venture Capital and Draper Associates.
All the stores feed their goods to a central warehouse in San Carlos. Once they are taken off trucks and inspected, the items are moved along a complex system of conveyor belts.
The first stop is at one of several photography stations, where on a recent day the photographer was focusing on a piece of luggage dangling from a mannequin. Farther down the line, Suzy Kunda-Cvitkovic, a specialist in jewelry, silver and porcelain, was examining a set of flatware at her desk and writing up the description, paying careful attention to the condition.
“I don’t put down anything that I can’t prove,” she said. “Buying on eBay is an act of faith.”
Items in the warehouse represented a cross-section of eBay as a whole. There were bicycles, a pay telephone, an R2D2 ice cooler, dolls, a riding saddle, truck tires, computers, laboratory equipment and an artificial cadaver that may have been used as a prop in a film or video game.
Another chain, QuikDrop, with stores in California, Texas, Oregon and Alabama, is selling franchises.
EBay drop-off stores don’t generally charge upfront fees for their basic service. Rather, the stores earn commissions based on an item’s final sale price.
The commission on the first few hundred dollars is generally 35 percent to 40 percent, with a lower percentage on any payment above that. Some separate fees and commissions charged by eBay also apply.
Basic service generally includes a seven-day auction featuring photographs and bidding beginning at $1. The stores charge more for extras, such as setting a higher minimum bid, selling at a fixed price, or creating an auction that lasts longer than seven days.
Merchandise left with an eBay drop-off store must meet certain criteria. For example, the shop staff must judge items to be worth at least $35 to $50.
The model is similar to consignment stores in the offline world specializing in antiques, clothes and jewelry. The difference is that items listed for sale on eBay reach a potential audience of 34.1 million registered active users.
EBay is not involved in any way in franchising the drop-off stores, and therefore doesn’t directly profit from their existence.
“We’re going to keep an eye on it,” said Kevin Pursglove, an eBay spokesman. “And at some point, if we feel there is some way we can work with these companies and make them better eBay sellers, we will.”
EBay has already met informally with some of the drop-off store owners. The company has agreed to pay for some of the stores’ advertising, which appears on billboards, online and in local newspapers.
EBay drop-off stores face many of the hurdles confronting any small business. Consumer apathy is, of course, a big risk.
During an hour and a half on a recent afternoon, only two customers walked into the Picture It Sold outlet in Berkeley. Both asked questions, but they didn’t drop anything off for sale.
McGinnis, the store owner, said business is typically slower in the afternoon. He added that he sold $10,000 in merchandise during the first two weeks of business as proof that the drop-off concept has potential.
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