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Seller names Amy Mayer and Ellen Navarro Web site Sells http://www.expressdrop.com or http://stores.ebay.com/ExpressDrop-Chicago
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Clothing, antiques, household goods, electronics, consignment merchandise
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Navarro and Mayer, who are both 25 years old, first conceived the idea for their drop-off store in January 2004. Within two months, they were open for business. The first and most important decision they had to make was where to locate their store. On the Web, location is important; having a storefront on eBay s well-traveled web site is a plus, as is creating a storefront with a popular shopping area like Yahoo! Stores. When it comes to locating a brick-and-mortar store, it comes down to finding a well-trafficked area, and getting your store and your physical advertisements to attract the attention of as many local residents as possible. Their ultimate choice was an intersection of streets that are well known but not in the most fancy-schmancy part of town. That makes it more affordable than paying the rent in one of the prime business areas in Chicago. It doesn t really matter that pedestrians and drivers aren t likely to discover the store by chance as they are passing by, because Navarro and Mayer are looking for serious customers who have already decided to do business with them. We decided from the get-go that this should be a destination business a place that people might travel a little bit to reach, rather than a convenience space. The intersection where we are located is a four-way stop. You get a lot of traffic, especially from people heading out of town going toward the expressway. There s a bus stop on either side of the street. We ve had people
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drive one and a half hours to get to us even from as far away as Wisconsin and Southern Illinois. We often have people drive in from the suburbs of Chicago to bring us stuff to sell. They have drop-off stores out there, but they say they ve had bad experiences with those stores. We really feel no competition from places that are also located on the North Side of Chicago, says Ellen. When the local Fox News channel did an undercover investigation of three drop-off stores in this area, ExpressDrop was reported to be the most reputable establishment. Their primary competitors are bigger drop-off store chains such as AuctionDrop, QuickDrop, and iSold It. Navarro, left, and Mayer are shown in Figure 7-4 in front of the ExpressDrop store at 1900 West Belmont in Chicago.
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FIGURE 7-4 These two twenty-something entrepreneurs chose the location of their brick-and-mortar store carefully.
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Before you put down money on a location for your store, make sure the zoning classification for that address allows you to resell used merchandise. City ordinances might restrict such activities. Also check your state and local regulations on dealers of secondhand merchandise to make sure you comply with them.
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People Get Caught Up in the Romance of Selling on eBay, and They Don t Do the Business Projections
ExpressDrop was buzzing with activity when I visited on a Tuesday afternoon. A police officer was there with some merchandise to sell;
CHAPTER 7: Diversify Your Business Presence
a young man came in with two boxes of rollerblades; Amy and Ellen took turns on the phone, answering questions about shipment times and methods as well as the usual business inquiries such as What are your hours and How much does it cost to sell on eBay Ellen quickly did a check of eBay s completed auctions and determined that the rollerblades wouldn t sell for the required minimum of $50. The young man didn t seem disappointed; he went to his car and retrieved a musical instrument case, which eventually was put up for consignment. Plastic tubs full of clothing, shoe boxes, and exercise equipment that had been left by their owners were scattered around the storefront. After about 18 months in business, the two drop-off store entrepreneurs have sold more than a million dollars worth of merchandise; they estimate that they ve completed 7,000 transactions. Their feedback level is 5,200 at this writing. They put up as many as 400 items for sale in a given week (the average is 150 per week), and their sell-through rate is about 70 percent. By all indications Navarro and Mayer are doing well, which pleases but doesn t surprise them. Before they opened their doors for the first time, they knew what their goals were and had a plan for how to meet them. We drew up a business plan before we started, says Mayer. We read a good book about preparing business plans. Too many people get caught up in the fever, and the romance, of selling on eBay. They get carried away with it before they have done projections such as on how much they need to have in reserve in case they don t sell anything in one day, or one week. So far, however, a day has not gone by without some business coming through the door. They were also happy to learn that the licensing and other requirements needed to start a brick-and-mortar business in the city weren t especially difficult to obtain. Luckily, inspection procedures were simplified because they found a vanilla box space an office that had just been newly constructed. They only had to build a wall to separate the customer service area from the photography area. They store items that have already been listed in the 900 sq. ft. basement. They had to do a bunch of paperwork, but they found many of the necessary forms on the City of Chicago web site (http://www.cityofchicago .org). They also incorporated and applied for a tax ID number and a City of Chicago sales tax ID number. They went to a city office to get a merchant services license. We spent some time on various procedures and had to follow up on a few things, but nothing was entirely difficult, says Amy. They retained a general services lawyer to make sure everything was done correctly. The lawyer also crafted a returns policy as well as an elaborate consignment disclaimer that is added to each one of their sales. The statement limits their liability in case they receive an item that has
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