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Afraid to eBay? Hire an online auction service

Love those dancing eBay commercials but don't feel Net-savvy enough to sell your unwanted items online? Let an auction drop-off service do it for you.

Storefront drop-off centers are springing up from coast to coast. These "brick-to-click" locations are betting that you have neither the time nor the interest to effectively post a strong digital photo and description of your item, answer e-mail inquiries from interested buyers in a timely manner, close the sale, secure the payment, and pack and ship the item so it arrives at the other end undamaged.

For about a 30 percent commission, the drop-off service does it all for you, and chances are you will still walk away with more than you would have at a garage sale.

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So far, two drop-off business models exist:

1. Stand-alone drop-off centers, such as AuctionDrop, QuikDrop and Auction Wagon, that specialize exclusively in online selling.

2. Pack-and-ship business centers, such as PostNet, that offer selling as a low-cost add-on to their menus of office-related services.

Any of these operations can help sellers make some Internet auction cash, but the real winner is eBay, the dominant player in online auctions. The auction giant gets most of the business from the drop-off startups and views them as the next phase of the trading assistant program it launched three years ago that now includes more than 34,000 sellers worldwide.

"We are thrilled that there are individuals and groups out there that have figured out different ways to bring the eBay marketplace to the physical world," says eBay spokesman Hani Durzy. "Because let's face it, there is a segment of the population that for whatever reason will never go on eBay to sell. Physical drop-off locations enable more people to access eBay."

There may not be an online auction drop-off in your hometown just yet, but here's what they look like, how they work, what they will and won't sell for you and where they're likely to spring up next.

The worldwide garage sale
Had eBay remained primarily a marketplace for collectibles, it is unlikely that drop-off centers would be taking off today. In fact, just before the tech crash, two early eBay consignment centers, including MyEZsale, burned up their first-round venture capital before liftoff.

But eBay has been consciously moving toward general merchandise (or "practicals") and away from collectibles, in part because online auctions themselves have contributed to a precipitous drop in collectible prices by making available large inventories of items previously considered rare.

"Four years ago, 60 percent of our gross merchandise sales (GMS) could be attributed to collectibles and 40 percent to what we call practicals. In 2003, it was estimated that more than 85 percent of our GMS was attributed to practicals and less than 15 percent to collectibles," says Durzy. "It doesn't mean we are moving away from the collectibles business. It just means that eBay is expanding as a destination for people to get anything."

That means eBay can bring in top dollar for your old ski boots, last year's digital camera, leftover inventory from your brother's business -- practicals.

While most collectors of Beanie Babies are likely to know an eBay trading assistant, Jane and Joe Average probably don't. Neither are they comfortable simply finding one nearby by plugging in their ZIP codes on the eBay trading assistants site.

That's where a neighborhood drop-off center comes in handy, according to Jack Reynolds, co-founder of QuikDrop.

"Selling is hard because you have to take a digital picture, post it, give them your bank account and credit card information, answer e-mail, then pack it. And as soon as you sell it, by the way, the bidder knows your name, address and telephone number. So now you've had to give up your personal information to the guy who bought the product. It's just not worth it," he says.

A drop-off on every corner
QuikDrop, based in Costa Mesa, Calif., opened eight franchise locations last year in California, Texas, Montana, Alabama, Virginia and South Carolina. This year, it has signed agreements to open 24 stores in Southern California and 97 throughout the Southwest over the next three years. Its franchisees tend to already be eBay power sellers.

As a stand-alone drop-off, a QuikDrop center resembles an airline baggage check-in desk: small customer service area upfront, large holding area in back.

When you bring in an item, the employee takes a digital photograph, writes a detailed description and does an initial online search for approximate market value. Most drop-offs won't accept items worth less than $50. The whole process takes about five minutes.

Within 10 days, you receive your check, less the QuikDrop commission, on a sliding scale of 38 percent on the first $200 to 20 percent over $500, plus an eBay fee ranging from 5.25 percent on the first $25 to 1.5 percent of sales over $1,000. Buyers usually pay shipping, handling and insurance.

(continued on next page)

-- Posted: Dec. 1, 2004
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