Wondering what to do with all those unwanted holiday presents? Tired of negotiating the clustered clutter that’s filling up your garage? Wondering what to do with your old camera now that you’ve gone digital?
And does peddling the stuff on eBay seem like too much of a hassle, even though you could use the cash?
Then consider Picture It Sold!, one of the newest additions to the ranks of Ashby Avenue merchants, operating from a storefront just a couple of doors west of College.
Kevin McGinnis would love it if you did.
The 37-year-old Oakland journalist raised the cash for opening his shop in a decidedly politically incorrect manner, at least for Berkeley—by betting on the hazards of war.
When the U.S. invaded Iraq last March, McGinnis found himself secretly hoping some of Iraq’s oil fields would go up in flames so could make a bundle when the company he’d sunk his savings into, Boots & Coots International Well Control, put its oil field fire team to work.
“Everyone was afraid he [Saddam Hussein] was going to torch all those wells,” McGinnis said. “So I bought it at about 60 cents a share, and it got as high as about $2.50, but I sold it at $2.25. So I took all the money and ran.”
Armed with his windfall, last August McGinnis and his wife Erin opened Picture It Sold, their eBay consignment shop, joining the ranks of a new breed of entrepreneurs who ride the coattails of one of e-commerce’s most phenomenal successes.
Founded in 1995, eBay lets users log on to buy or sell just about anything, from rare collector’s items to computers. After selling $14.87 billion in merchandise in 2002, the fast-growing San Jose firm saw net revenues climb 60 percent in 2003, reaching an astonishing $24 billion.
By charging a percentage of the merchandises’ sales price, eBay has made more than enough cash to flood the media with ads.
For many would-be sellers, the notion of holding an e-auction seems daunting. That old velvet Elvis painting in the basement may no longer be wanted, but is it worth the time and effort required to auction it off?
For those who answer no, enter the McGinnisses.
At their small Elmwood shop, the couple and their staff of seven receive unwanted possessions, research their value, and take digital photos they use to run a seven-day eBay auction from the small bank of computers in the rear of the shop.
Once an item sells, the McGinnisses package it up and ship it off to the buyer, then cut the seller a check after deducting a 35 percent commission on the first $500, and 25 percent on anything above that.
Asked to name the most interesting item they’ve sold, they point to a vintage collection of Life magazines, dating from the 1930s to the 1980s.
The McGinnisses’ concept isn’t entirely new. eBay runs a ‘trading assistant’ program, allowing some 27,000 registered users—most working from home—to advertise their selling services to those without the time or inclination to do it themselves. The McGinnisses took the concept a step further by opening a bricks-and-mortar storefront.
Their primary Bay Area competitor is San Carlos-based AuctionDrop, which opened a string of stores around the region during the past year.
McGinnis quit his job as a news editor at KGO Channel 7 two years ago to strike out on his own. “I was putting in some really long hours, working hard, and I just remember telling myself every day that life is too short,” he said.
Opening an online jewelry shop, he found it difficult to draw in traffic—so he turned to eBay and local consignment shops to make sales, and both worked well, and the idea behind Picture It Sold was born.
McGinniss says 25 to 30 customers come to his storefront daily, toting items worth anywhere from $50 to thousands. Though declining to give numbers, the McGinnisses say they’re taking in twice the cash they’d anticipated at this point.
A combination of heavy traffic at the Ashby and College intersection in front of their shop plus the billboard they ran during the autumn next to Interstate 880 in Emeryville have generated a healthy flow of walk-in customers.
One recent afternoon found the store bustling. Ted Little turned up to sell a vintage surfboard, after he spotted the big banner out front (‘Bring us Your Stuff. We’ll Sell it on eBay!’) and figured, “why not?”
“I’ll try this out and see how it works,” Little said at the time, “I know what [eBay] is, but I’ve never thought about using it.”
A few weeks later Little was something of a convert. His surfboard fetched $150, double his expectation, leading to many return visits. “I was impressed with their service,” he said. A salvaged, 97-year-old sword found inside the wall of a house he’d been reconstructing fetched an impressive $500.
Little, who owns a small steel fabrication shop, said the time saved by using Picture it Sold more than justified their fees. “I can make money with my time, so I don’t want to cut into it,” he said. “If I had to take responsibility to enter an item and ship it and all that, it wouldn’t be worth it.”
Bob Marsh, real estate agent and consumer electronics collector, said that since spotting their billboard in September, he’s sold 20-plus items, mostly used stereo equipment. “The process is about as easy as can be,” Marsh said, “You do nothing but wait for a check in the mail.”
Marsh said he’d found running an eBay auction—contacting the buyer, packing , shipping, and arranging payment—forbiddingly time-consuming, and vows to continue using the shop “as long as they keep sending me the checks.”
Greg Smith, an analyst who covers eBay for Merrill Lynch in San Francisco, said it’s a bit early to know how bricks-and-mortar trading assistants like Picture it Sold will affect the company itself. While “a significant amount of volume is people selling on behalf of others” through the trading assistant program, he said only a “tiny proportion” comes through shops like Picture it Sold.
Jennifer Chu Caukins, an eBay spokesperson, said the company’s been pleasantly surprised by the advent of businesses like McGiniss’. “A lot of this just happened on its own,” she said. “We’re thrilled about it, and we’re supportive of it.”
Though the McGinnisses hope to expand, AuctionDrop is already on the move—opened in March of 2003, it’s backed by $3 million in venture capital from Mobius Venture Capital and Draper Associates of Silicon Valley.
Corporate spokesperson Andrea Roesch said a fifth AuctionDrop store will opened in San Jose this month, augmenting current outlets in San Carlos, San Rafael, Los Altos and Menlo Park. The company plans to move into Los Angeles later in the year and eventually attempt “the development of a national brand” by reaching the East Coast before 2005.
The McGinnisses feel their approach is distinct enough from AuctionDrop’s that they’ll be able to carve out their own niche, and grow at their own pace without taking on outside investors.
“We pride ourselves on trying to bring the culture of eBay into our store—it’s kind of folksy,” Erin said, while their competitor’s rapid expansion gives them the aura of a big-budget chain compared to the cozy mom-and-pop aura of Picture it Sold.
One pressing question for everyone out to capitalize on the growing popularity of eBay is whether or not their current customers will remain unwilling (and sufficiently tech-wary) to auction their possessions themselves.
McGinnis hopes to avoid undue dependence on his current customer base by convincing merchants to use his services to market excess to other businesses—a course eBay itself is pursuing. Chu Caukins said that similar transactions on eBay totaled over $1 billion in 2002, making them “an increased focus for us.”
“There’s potential in people’s garages,” McGinnis said, “but there’s so much more in these business-to-business relationships.” Confident that the move to a business-to-business model will help ensure the firm’s healthy growth, he and Erin have decided to sell the dry cleaning business they’d also been running, and focus solely on Picture it Sold.
And how will they sell that business? That’s right: on eBay.›