February 18, 2005

Thanks to a company called AuctionDrop, selling items or merchandise on eBay is now as simple as dropping off goods at your local UPS office. AuctionDrop caters to eBay sellers by eliminating the problems that keeps many potential sellers from posting items: instead, it posts the items for them.

AuctionDrop has a partnership with United Postal Service, so sellers can drop off their items at one of the 3,700 UPS offices across the country. At that point, the item is shipped to AuctionDrop, where it is inspected, tested, photographed, priced, and posted on eBay with a written description.

Sellers, in exchange for having AuctionDrop do the dirty work, pay a commission that ranges from 20 to 38 percent, depending on the item's price - the more expensive the item, the lower the commission. (AuctionDrop won't take any item that costs less than $75.)

A 38 percent commission is surely hefty, some sellers no doubt feel. But, points out AuctionDrop CEO Randy Adams, "You can compare it with a consignment operation: you can put it on eBay in front of 115 million people, or put it in your local consignment shop, where it might be seen by a thousand people - and they take about 50 percent."

According to Adams, AuctionDrop offers an advantage other than convenience. Based on his figures, when people post their items on eBay themselves, they complete the sale 40 percent of the time; AuctionDrop, in contrast, sells 92 percent of its items posted on eBay.

Why the discrepancy? Partially, it's AuctionDrop's reputation, Adams says. The business has garnered 20,000 positive feedback comments on eBay, earning a 99.9 percent positive rating.

Over the course of conducting approximately 50,000 auctions, AuctionDrop has developed listing expertise. "We know the right way to list things, the right terminology to use in the titling - it's kind of an art," he says.

AuctionDrop claims a higher-than-average selling rate on eBay thanks to itslisting expertise.

Additionally, "We recommend that people don't put minimum prices on things," Adams says, to help increase total bids. "There are a whole bunch of counterintuitive tricks we use."

Headquartered in San Carlos, California, AuctionDrop has a 100,000 square-foot warehouse in which to store items. The physical plant is fully automated, and is capable of listing 5,000 items a day on eBay, Adams says.

"We have banks of photographers, and we have banks of writers who are experts in various categories," he says. "And we have a huge shipping department."

To bulk up its auction offerings, AuctionDrop is widening its drop-off network. In addition to UPS, it's currently experimenting with allowing sellers drop off their goods at select Best Buy stores, in exchange for gift cards.

Developing this level of infrastructure has taken some substantial financial backing, which AuctionDrop raised with the help of venture funding from Mobius Venture Capital and Draper Associates. Although Adams declines to state the company's revenue, he says that the company's goal is "to be lean and mean and continue to increase our revenues until we hit that that magic break even point."

Source: e-Commerce Guide

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