Ebay Drop-Off Stores Rethink Business Model

Post Gazette:

The get-rich-quick fantasy is fading for the eBay drop-off store business. The recent years’ explosion of grand openings by independent operators and franchisors ready to help consumers sell the stuff in their attic online appears to have slowed as experience proves how hard it can be to make a profit.

California-based franchisor iSold It recently announced it would stop selling new franchises so it could focus on helping existing franchisees. The move came as the company faced complaints from ex-franchisees who set up a Web site to air their concerns that iSold It painted a too rosy picture of the prospects.

Another franchisor, QuikDrop, grew quickly and then saw enough franchises close that it has turned far more selective about approving new stores. ‘We are getting a better understanding of what it takes to do business in this market,’ said Jack Reynolds, co-founder of the Nevada-based company.

Franchises aren’t the only ones tinkering with the model for success in what was always a quirky proposal: trying to open up the eBay online garage sale to those more comfortable with bricks-and-mortar stores. More than one independent operator has stopped taking low-priced items and started charging higher commission rates to help the bottom line.

‘Basically, it’s a lot more work than people realize,’ said Kathleen Orellana, who owns the SeeItSell! store in McCandless, which she said was profitable. She enjoys the treasure hunt aspect that comes with never knowing what will walk into the store every day.