|Sun Mar 28 2010 09:49:31|
Where Have all the eBay Drop-Off Stores Gone?
By: David Steiner
|I was doing a little Spring cleaning on the site this weekend, and one of the chores was going through the charts on AuctionBytes to bring them up-to-date. Invariably, I get sidetracked because I find such interesting data tucked away on the site. One of the first updates I tackled was the chart for Consignment services. I believe we created this chart in 2004-2005, around the height of the eBay Drop-Off service "land grab." Venture Capital firms were backing companies (AuctionDrop, for example, received around $3 million in funding) in the belief that if people who didn't have the time to sell online themselves would be able to drop their goods at a local drop-off store, and "Voila!" - instant money. |
We were one of the first publications to write about the drop-off concept, starting with a Boston-Area service called, "MyEZSale." Things didn't pan out for that company, and ya-da, ya-da, I now own the domain name. (I thought it was a cool name, the concept just stunk) We caught quite a bit of flak from franchise owners for the "tone" of our coverage. Interestingly, most of those services are no longer in business.
So where do eBay drop-off stores stand in 2010? Here's what I found in updating the Consignment Services chart: There are 221 services listed on this chart. That's 221 drop-off services that were either originally included by us, or requested inclusion. This number also includes companies that sell franchises. Of the 221 services listed, only 69 now link to an operational consignment service. That means that just thirty-one percent of the businesses that we listed in this area are still functioning.
I've heard that restaurants have a high rate of failure - in looking at this 2005 Cornell study (pdf) it appears that the rate is between 50%-61% after three years. I'm not claiming that the data in our charts adds up to a scientific study, but it certainly is an interesting data set. If a 61% failure rate for restaurants is held up as being an example of how difficult it is to sustain that type of business, the consignment services in our charts had an uninspiring 69% rate of failure.
What piques my curiosity isn't what made so many of these services fail? I think that's been well documented by us. I'm curious about what has made the services that are still operating succeed. What do they know that the others didn't, what types of adjustments have they had to make, and are there some pearls of wisdom that they can impart to sellers on protecting their margins? I'd love to know.
Back to updating the site…
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