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Once you find a location for your physical store, you have to comply with local regulations and possibly do some renovation if repairs or upgrades are needed. You need to buy fixtures such as shelves, tables, chairs, and a cash register. In other words, you incur all the expenses that you normally avoid when you set up a storefront on the Web. And you need to sell enough merchandise to cover your rent, your utility costs, and the salaries you pay to employees.
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In order to make a drop-off store profitable, Navarro, Mayer, and other store owners have discovered that they have to alter their selling tactics. They can t focus on low-ticket items because it s so difficult to make a profit. If someone sells something on consignment for $50, for instance, the seller takes a fee of perhaps $10 to $16. Out of that fee, the seller typically pays eBay s listing fees, which reduce the profit by a few dollars. If an employee spends one to two hours talking to the customer, creating the description, taking photographs, and packing the item up, the sale just isn t profitable for the drop-off store. As a result, ExpressDrop and other drop-off stores shy away from selling anything on consignment that has less than a $50 value. They focus on high-end jewelry and clothing. And when you scan the current auctions being held by ExpressDrop (User ID: expressdropchicago), you immediately see one advantage of having a drop-off store as opposed to selling out of your home: You tend to get furniture and large machinery to sell that is likely to fetch a good price. Recent completed auctions by ExpressDrop include:
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An Inter tel Axxess Digital 18 phone system that sold for $1,425 A brand-new, sealed copy of Microsoft Visual Studio .NET ($3,150) An antique hand-lever printing press ($306) A new Barcelona Van Der Rohe style leather chair ($331.08)
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They ve also sold a Ferrari car for $29,000 and an Acura NSX for $33,000. The Ferrari is among the high-priced vehicles they advertise in an animated GIF image on the front page of the ExpressDrop web site shown in Figure 7-5. Because Navarro and Mayer have a store, it s relatively easy for owners to find the parking lot and unload their merchandise. It s also less intimidating for buyers to pick up their vehicles in person when they re coming to a brick-and-mortar store rather than the owner s home. Having a storefront really gives you a public face, says Navarro. When people walk into a brick-and-mortar store, they expect a professional interaction. If someone wants to sell with a Trading Assistant, they may have to go into that person s home and might not feel as safe. For some really big items like couches that must be picked up in person, the ExpressDrop women will place an ad in the Chicago version of the popular classified site Craigslist (http://www.craigslist.org). Or, they ll specify prominently in the auction description that buyers must pick up heavy items in person. If we are asked to sell something that weighs more than 150 lbs, we will go to their house to take the photo for a charge, explains Ellen. Otherwise, they need to bring us photos.
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FIGURE 7-5 Drop-off stores enable customers to bring heavy machinery and vehicles that can fetch high prices.
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When you re selling high-priced items, it s great if someone can pay the entire price all at once. But you ll attract more bidders if you re able to offer financing. ExpressDrop sales listings contain an offer for financing in a Limited Time Offer box that you don t see very often (shown next). It s an option available automatically to sellers who accept PayPal payments and buyers who are U.S. citizens and PayPal members. You can choose a buyer financing option from the Payment and Shipping section of the Sell Your Item form. But the buyer financing option appears automatically if you offer something for more than $199 and you already accept PayPal.
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