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EcommerceBytes-NewsFlash, Number 1475 - February 15, 2007 - ISSN 1539-5065    2 of 3

eBay Drop-off Chain NuMarkets under Investigation

By Ina Steiner
EcommerceBytes.com
February 15, 2007




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A television news station is reporting that the Etowah Police Department is launching a full investigation into NuMarkets, a chain of eBay drop-off stores headquartered in Etowah, Tennessee.

In mid-January, AuctionBytes had contacted NuMarkets founder and CEO Russ Grove to find out why the company's eBay account was NARU (not a registered user). Grove said things were going well, and that he was in the middle of a complex deal that would "amplify our drop off store operations but with a refocus on business vs. consumer."

In response to AuctionBytes' inquiry about NuMarket's NARU status on eBay, he said, "We have streamlined operations and are retooling our Simple Software and hence we are not selling under NuMarkets seller ID's at this time but we are active under other seller names. We plan on unrolling this new strategy in the next few weeks- which I think will once again raise the bar for eBay selling methods."

Three weeks later, on February 11, Grove sent an email to say the deal had closed the previous day. "I think you will see where we have been focused and how we are moving forward, It is very exciting. Everyone, including us has been trying to figure out how to make this 1st generation eBay drop off concept work and I think the answer is - It will not in its current business model configuration - but we think we have the 2nd generation model retooled that will work. I look forward to talking with you."

Grove has yet to respond to follow-up emails from AuctionBytes on February 13 and 14. The phone number advertised on NuMarkets' website has been disconnected, according to a recording.

Reporter Will Carr from 3 Eyewitness News reported that the Better Business Bureau and the Etowah Police Department have received complaints about NuMarkets drop-off stores. (It's not clear if the stores are owned by NuMarkets directly or by its franchisees.)

NuMarkets opened its first eBay drop-off store in August 2002 and opened a second store in February 2003. By July 2003, they were selling franchise locations. In 2004, NuMarkets secured venture capital financing from the Southern Appalachian Fund and a group of private investors including Jim Amos, former CEO of Mail Boxes Etc. and author of "The Complete Idiot's Guide to Franchising." The Southern Appalachian Fund receives money from the Small Business Administration's New Markets Venture Capital program, according to a newspaper report.

In 2005, NuMarkets launched Blue Dot Commerce (http://www.bluedotcommerce.com), a service that "enables manufacturers and retailers to develop an effective eBay selling marketplace with minimum resources." While the site credits NuMarkets LLC as the owner, the WhoIs database shows the domain name BlueDotCommerce.com as registered to URS Corporation, a publicly traded company.

Update: 2/15/07 9:00 am: Russ Grove called AuctionBytes on Thursday morning. He said he had not read this article. AuctionBytes suggested he read the story and respond and we would be willing to update the story immediately. Grove said he could not go on the record until Monday on advice of the board and attorneys. He said the main NuMarkets telephone number is working. The number AuctionBytes had tried, which was on his February 11 email signature and on the BlueDotCommerce.com website, was a cell phone number, he said, not the main NuMarkets phone number. Grove said URS Corporation is NuMarkets' engineering hosting firm. Grove said he would be back in touch on Monday when he could announce the deal and tell the whole story, not a sliver which is being reported in the media.

Update 2/15/07 11:30 am: Etowah Police Chief June Parham told AuctionBytes that her department has received two complaints against NuMarkets since January, one for under $100. She said she had been in email contact with Russ Grove, and that it appears they are trying to work their business out and do the right thing. She advises all people with complaints to file them with the company and with the Etowah Police Department. She has consulted the DA (District Attorney), and "we cannot say if a crime was committed."

Links to articles - with video - from 3 Eyewitness News:

http://www.wrcbtv.com/news/index.cfm?sid=6150

http://www.wrcbtv.com/news/index.cfm?sid=6219

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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