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The Rise Of eBay Middlemen
from the they're-everywhere... dept
A little over a year ago, we first mentioned the company AuctionDrop and their plans to set up retail stores where you could drop off the stuff you wanted to sell on eBay and let them handle it (for a 20 to 40% commission). I didn't see the point of it then, and I'm still not sure I see the point of it now, but it appears that there are a ton of identical companies out there all trying to do the same thing. The Reuters article says there are over 30 such companies around right now, and it's unclear how any of them differentiate from one another other than price - which is always a dangerous situation to be in. These new middlemen claim that they are more "experienced" at eBay selling, so they can get a higher price, but many people scoff at that idea. Besides, can they really get a price that makes up the 40% commission?
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And ebay itself is a middleman (middleperson?) between the buyer and seller, so this puts two middlemen - each taking a cut - between buyer and seller. What's left for the seller?
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ebay auction middlemen
is this a good business to start - seems to me mike's comments are accurate - no barriers to entry, therefore first mover advantage is probably important - are any VC's looking at this space?
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What are the alternatives?
If you don't have the time, inclination or resources to Ebay an item? A garage sale? Most times you don't get a good price and limited exposure. Antique shop or Flea Market? Chances are it will sit there for days, weeks or months and may never sell.
Worse yet setup a stupid looking Ebay auction with no or goofy pictures and poor or misspelled description.
This has potential, the exposure of Ebay and the ease of 'just drop it off'. It may just get an item of limited interest to someone who really wants it and is willing to pay a decent price. More power to 'em.
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But...
1) eBay auction descriptions that are well thought out, well documented and well detailed, especially if they include numerous color photographs and other nice touches almost always end at higher rates than similar auctions with less details, fewer photos, etc.
2) If you are a competent eBay auction creator, have a digital camera, clipart, etc. you can create an auction and sell something for more (usually) than someone who doesn't have the skills, camera, etc.
3) If you can convince the un-skilled person that your skills and equipment are worth the mark-up (but 40%?) then you have a business.
I've bought and sold a lot of items on eBay and have a decent feedback number, and often times people I know come to me and ask me to either sell an item for them or, help them create their auction to maximize their return.
I never charge people for doing this, but I see how people could and potentially make a living off of it.
Think of it as a delayed pawn shop, instead of instant cash gratification you have to wait up 10 days to get the money out of an item you no longer want/need.
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eBay middlemen
I sell things sometimes on eBay (userid michael_ward, feedback 153, all positive) but it's a pain in the butt to do it right. Good pictures and/or scans, detailed descriptions, you can end up paying yourself a dollar an hour. And I'm pretty good at the digital and html work, but it is possible to do it faster and better if you REALLY specialize in it. There is always a potential business niche for someone who can do your task faster and cheaper than you can. Of course, they may make their market by concentrating on high-ticket items that maximize dollars/hour of listing labor. That's there business. The money is nice, but you have to count on the fun of watching someone bid your item up. Or even just bid on it at all. Someone out there is going to put this to good use! And I get to clean off another shelf.
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middlemen have destroyed capitalism
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at what point will we have to admit that a system that starves workers and showers entertainers and money changers
with wealth....just aint worth defending
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