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If students can do it without a franchise…

I’ve written a few articles on eBay drop offs. I was neutral on the franchise…

Pros:

  • it’s a service people will use
  • eBay buzz and hype is still strong
  • all franchisors are charging the same 35% fee (for now)

Cons:

  • the business is too simple to start, has no barriers to entry, new competitors will literally springing up overnight
  • existing used and consignment stores will soon add eBay sales

  • the service will have to compete based on fees (who wants a constant lowering on margins?)

I’m sure I’ll be negative on the business within the next 5 years, but for now I’m staying neutral because the next 2-3 years will be strong.

Want proof the eBay drop off store is easy to start and run without a franchise? Campus Easy Sales recently set up shop on the Washington University in St. Louis campus. A couple of fulltime students thought it’d be a good idea and just started it. They do nothing different than any other franchise out there (the hold the item, take pictures of it, post an ad on ebay, ships the item after the auction ends, and send the seller their cut). However, the total fees add up to ONLY 24% COMMISSION off the first $500. Compare to other eBay drop offs who charge 35%. You can bet your dog’s favorite toy this puppy will see their commissions slashed to 25% or less in a few years.

About Ryan Knoll

Attorney and advisor with an interest in franchising. Feel free to email me comments and questions on the "Contact Us" page.

3 comments

  1. I think selling on eBay is so easy that these stores won’t do well. If you have something worth money, someone in your family, friend or neighbor can quickly help you with ebay. I haven’t seen many garage sales lately, I wonder if that is because of eBay.

  2. Jess –

    I don’t think most moms, dads, grandmas and the like will sell directly on ebay. Most don’t have a scanner or digital scanner (at least they don’t know how to use it properly). So I think that population is large enough to support EBAY drop offs.

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