|Thu Jan 3 2013 22:25:07|
eBay Subsidizes Sellers in Consignment Pilot Program
By: Ina Steiner
eBay is dipping its toe in consignment selling, and one might ask just how far is eBay willing to go?
eBay has manned "eBay Selling Assistant" vans with its own drivers who visit people in their homes to pick up items they wish eBay to sell on its marketplace on their behalf. The program is in pilot testing in San Jose, California, and Topeka, Kansas, as described in Thursday's EcommerceBytes article.
Today I spoke with the eBay drop off store owners who are participating in the program. eBay drivers drop off consignors' goods at their stores, and Karen Blankenship in San Jose (KbeeTradingPost), and Kevin Bittner in Topeka (iSold It), list the items for sale on eBay - see Friday's newsletter for details.
Karen and Kevin are in the position of training eBay's pickup staff - the drivers and people staffing the call centers - on the types of items that will do well.
A whole chapter could be written about eBay's decision to price its service at 25% of items' selling price. When you consider that sellers must pay eBay and PayPal fees, which can easily add up to 15% of the selling price, that would only leave them with 10% to pay overhead and other expenses.
No one I spoke with today thought 25% was a reasonable fee. Linda Miller of ConsignmentPal said 50% was the industry norm. Sure enough, eBay is subsidizing the two participants in the pilot program so they receive their normal fees. But eBay still gives consignors in the Selling Assistant program 75% of the item's selling price.
Could eBay be considering opening stores of its own in local markets rather than working with drop-off stores and Trading Assistants to help power its pickup service? If we've learned anything about eBay drop off stores, it's that it's a notoriously difficult business model.
I asked eBay spokesperson Johnna Hoff if eBay would consider opening its own stores. She said she knew of no such plans and wouldn't want to speculate.
What do you think of eBay's Selling Assistant pilot program. Would you be willing to speculate on just how far eBay will take its consignment program?