eBay Drop Off Stores Not Doing So Well

from the so-much-for-that-plan... dept

Two years ago, we noted one of the first companies that was built around the idea of setting up a storefront to sell your crap on eBay for you, named AuctionDrop. While the concept makes some amount of sense (a good seller can command at least a slight premium, and many people don't want to deal with the hassle of selling stuff themselves), it still seemed like a very tough business. AuctionDrop wanted to charge 40% commissions, which could scare off quite a few people -- and it seemed like a very difficult business to successfully scale to any reasonable degree. One other problem was insanely low barriers to entry, as seen in the fact that a ton of copycats quickly flooded the market. Now, AuctionDrop is admitting that the business model hasn't quite worked out the way it expected. Instead of working towards opening up 1,000 stores (the original claim), they've now shut down all but one. Instead, they're trying to run similar offerings for UPS and Best Buy. Of course, it's not clear how well those are really doing either. Best Buy competitor Circuit City tried to offer their own eBay auctioning service, but quietly shut it down saying that they weren't getting much return on the investment. It certainly might be a small niche business, but it's hard to see how it's possible to turn this into a big business, as many of the original companies positioned themselves to be.
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  1. identicon
    Oliver Wendell Jones, 2 Feb 2005 @ 6:41am

    We've got quite a few

    If I climb on the roof of my office building, I can see at least one (in this case it's called "I Sold It On Ebay!").

    They charge obscenely high commission rates (30-50% depending on the final value of the item).

    Last I checked it takes less than 10 minutes to put together a snappy ebay auction, including digital photographs, plus another 10 minutes to wrap, pack and ship an item. In my opinion, 30% is about the MAX it should be, not the minimum.

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