Question
I saw an interesting article on AB that might be useful guidelines when listing for family/friends, at arms length or if it becomes a full time business. The summary is:
Seven Tips for Running an eBay Consignment Business
By Lu Paletta
AuctionBytes.com
1) Sign a Contract
2) Know Identity of Consignor
3) Parts
4) Make Sure Item Works
5) Research
6) Set Expectations
7) Establish Minimum
The link to the article is below and the author has a strong and interesting background.
fuk\Full Story
Answer
G'day Ray,
Are you personally thinking of setting up a consignment business. Only a curiosity question because of the number of threads you have been active in in the last couple of weeks (and aware that you may have already clearly answered this) - but not meaning to pry.
I was actually discussing this with a dealer in a relatively nearby town this afternoon, and gave him a copy of my auctioneering agency agreement to get an idea on how to set up an agreement for taking consignments (obviously it would need much adjustment, but both involve consignment of goods to an agent).
Kind Regards, Kevin
Answer
Kevin
No. Well, maybe. I might. Likely not.
I hope this answer is both clear and helpful.
I have no interest in a business myself, at this time. I did think the idea had great merit about 5 years ago when I first heard it discussed. Now I'm just intrigued and confused to watch all the noise.
With UPS to offer the service at 34,000 locations it will shortly have a prominent presence almost everywhere in the US.
It's like standing in a tapped out gold mining town and watching the train. All the miners are getting on to go elsewhere and all the "fancy easterners" are getting off, dressed in suits, and holding a claim in one hand and brand new shinny tools in the other.
Promoters are getting VC funding and selling penny stock to raise money to go into the business of selling franchises. eBay is promoting the idea, investing in at least one company (Meg on the BoD) and having them put eBay approved signs in the window.
Mostly inexperienced people are developing a high overhead business model to enter a field with low and diminishing profit margins.
I'm waiting for someone to shout "the Queen has no cloths" but so far it's all hype and investment money.
I do think the idea has and will continue to offer opportunities to independent sellers who might, in a very selective manner, offer their services to owners of goods, locally.
It's the noise of the month from eBay, might dry up some local inventory and may offer some buying opportunities. (These companies don't always research or present very well and ofter use a flat starting fee for everything. I got a couple of dumb luck buys recently that are apparently worth 30 times my cost and will be listed in my Store as Irish window dressing at 100 times cost. Narrow market so little price comparison is possible)
Way down the road somewhere if/when I get the Irish/Celtic Information site up and running, with the website store, I might consider offering some kind of marketing service to people who have niche Celtic items and would benefit from both the focused market of the Irish site and the eBay exposer for fixed priced offerings.
Last I looked that idea is item # 8,134 on my to do list so it's nothing in my immediate future.
Anyway, all this might explain my answer(s). Or not.
Drop off Stores were a great Y2K idea.
Answer
I'd be curious to know if the consignment store idea actually generates more revenue for ebay, or if it merely shifts the revenue source from one seller to another.
People who would normally either sell their items at a garage sale or donate them to charity, instead sell the items through a consignment store. Those items are therefore not available to the existing ebay seller who would have purchased them (at the garage sale or thrift store) for resale on ebay.
What percentage of the consignment store sales would have made it to ebay anyway? And would the items have realized a higher price from a possibly more experienced (in any particular category) seller? There is probably no way to tell, just wondering from ebay's perspective if this venture is worth it.
Answer
From what I've seen, the eBay consignment thing has mostly been a failure. I dabbled in doing consignments for a while. I had contracts and did everything on that list and more, but it was way too much trouble for the payoff.
I know of a bunch of antique malls that went the consignment route years ago and they all pulled out of it. They had stuff walking in the door all the time AND had knowlege of it already and could add that to their business without devoting much in the way of resources to it, and STILL it wasn't profitable.
Is anyone doing it with a real level of success?
Answer
eBay is so labor intensive, I can't see doing online consignments even for a $50 value minimum.
There's a small store in town that sells mostly gift items. Very eclectic inventory. She takes consignments on occasion, but I'd guess it's less than 2% of her inventory. I think she does it mostly to be neighborly and promote goodwill (small town).
Hasn't Christopher Lowell done decorating shows where he uses consignment shops? Maybe in large cities that have lots of affluent people, this concept works. The rich don't want to do yard sales and the middle class get good stuff for cheap. I remember on one show he did, the owner would call the consigner after a month to see if they wanted to lower their price or take the item back.
Peace,
Sadie
Answer
My ex-business partners do some consignment.
They take 40% of the Final Value and cover the fees themselves. Shipping & Handling Fees they keep themselves.
Worked well for the residue of a large collection from an estate that mostly went to Sotheby's.
In general, though, they end up buying the stuff outright if the market is right. People are happier to get the money up front and they make more in the end.
I do believe it could work but only if you can get a steady stream of high value ($500.00+) items coming in and you are getting a good cut. Otherwise, too much work for too little return.