You Drop It Off. We Sell It On eBay

Every now and then, a VC runs across an entrepreneur that has enormous vision, the mental agility to tune his idea to the market reality, and the chutzpah to pull it off. Randy Adams from AuctionDrop is one such guy.

I met Randy for the first time when he came in one Monday to our partners meeting to pitch us on the idea for AuctionDrop. At the time he had a average looking powerpoint presentation that pitched a big idea – a national chain of drop off centers for eBay. The premise was that it’s a pain in the ass for the average Joe to sell something on eBay, that people would pay to have someone else do all the work for them, and that eBay would embrace this as one of their continued growth constraints is “supply of goods”.

We bit on the premise and my partner Heidi Roizen led a seed investment. Heidi had known Randy for a long time and had worked with him several times in the past. “If anyone can figure out how to pull this off, it’ll be Randy,” said Heidi.

That was over a year ago. After a few months, AuctionDrop had several company-owned stores up and running in the bay area and was doing a meaningful number of auctions each week. Within a year of being founded, AuctionDrop had five stores and had run over 14,000 auctions. AuctionDrop had focused obsessively on pleasing its customers – which is one of the keys to success on eBay – and had a superb rating. This has enabled it to be the first (and currently only) eBay Drop Off Center to receive Titanium PowerSeller status.

This wasn’t nearly enough for Randy. We all agreed that this was working and wanted to go national. Randy wanted to go national. eBay wanted us to go national. We wanted to swing for the fence with this investment and go national. Randy had two approaches – build out a national footprint ourselves or create a franchise model. For a variety of reasons, neither of these were compelling – building a national footprint was incredibly expensive (“That’s a scary as shit amount of money required,” said one of my partners) and would take too much time; a franchise model seemed marginal from a financial perspective and lacking from a quality control perspective (which we continue to believe is key to success on eBay).

About four months ago, I got an email from Heidi saying “Randy is talking to UPS about doing a deal where all UPS stores will be AuctionDrop enabled. We’d be national overnight and it’d be a huge deal for UPS since they want to continue to expand services through the stores.” This is the essence of the kind of thinking a VC wants. Goal = be national. Overcome all barriers – figure it out – then do it.

A month later Randy had a signed deal with UPS. Today the deal was announced (although it was covered in depth last week after the WSJ broke the story on it – an article even showed up in The Denver Post, one of my local papers.).

AuctionDrop is now live with UPS. If you’ve never sold anything on eBay, grab last years digital camera (you know – the one you replaced with this years model), find the nearest UPS store, and give it a try.

  • We have a new store in town, name I can’t recall, that does just this. For a town like Greenwich, this is PERFECT. You can reap the benefit of e-bay without having to get your fingertips dirty.

    I’m a fan of mixing the bricks with the bytes … I guess I see it as a means of survival but I suspect it’s a plus to both the bricks and the bytes since I don’t think people are going away and both need customers.

  • From A Local Presence to National, Overnight

    Brad Feld has a behind the scenes venture capital perspective on how AuctionDrop went from five local stores to 3,400 locations nationwide over night without franchising: Within a year of being founded, AuctionDrop had five stores and had run over…

  • Craig Thomler

    I’m in Australia & have been watching the growth of the dropoff store concept with interest.

    I investigated a local franchise and came to much the same conclusion, that it was a fairly marginal & high exertion prospect with plenty of opportunities for disintermediation.

    At the time I thought that potentially existing pawn shops, service (gas) stations or even supermarkets could become the dropoff points.

    However the news with UPS does make me realise that there’s a better fit with our national postal service.

    It’s an interesting model & has some great potential if the red tape is navigable.

  • Yan Zhao

    Darn. Just this morning, as I was brushing my teeth, I was thinking “It would be so much easier for people if I started a company that can sell things on eBay for customers.” I then spent breakfast coming to the conclusion that it would be great to do it with the help of USPS or FedEx. *sigh* a year too late!

  • This article mentions the AuctionWatch expansion:

    “In a similar move, AuctionDrop, a company that helps people list, sell and ship items sold via eBay’s auctions, signed a deal with delivery giant UPS earlier this month. The deal enables people to drop off items to be sold on eBay at any UPS store in the United States. The items are packed and sent to AuctionDrop free of charge. In turn, AuctionDrop takes a commission on any it successfully sells on eBay.” –

  • Nadia

    I DISAGREE WITH AUCTIONDROP’s ability to satisfy customers.

    Ok, from reading what was commented here, AuctionDrop may be an easy place to drop off your items. But the attitude they have towards customers’ request for accommodations is unacceptable. I DO NOT RECOMMEND BUYING FROM THIS COMPANY!!

    Here is the e-mail I sent to their executives.

    To whom it may concern:

    This was advertised on your site, but we did not receive the service that we were expecting. Because we missed an appointment, we could not pick up something that we bought and paid in full via money order.

    What happened?
    The TV that we could not pick up (due to unexpected circumstances) was put back into the warehouse. This is very poor planning. I’m sorry he (Lang Ngo) did not call to say he could not make the scheduled pick-up. But what upsets the both of us was that they put the TV away and told us we can’t pick it up until next week.

    This is not superior service. Why do we feel strongly this way? Because we’ve never heard of a business that takes forever to allow CUSTOMER PICK-UP and would put our item away immediately b/c we missed our schedule. Could have just kept it out for another day. Why put it away immediately when you know you’ll go through the trouble of having to pull it out again? It’s just not efficient.

    What would you think if we put in our school newspaper and all over that AUCTIONDROP.COM is unaccommodating and has poor customer service and all they worry about is their business only? I think that BUSINESS DEVELOPMENT techs should help re-evaluate the design and operation style of this company.

    Your company’s mission was suppose to offer:
    “the convenience of over 3,800 drop-off locations nationwide” and to operate” a large-scale processing center staffed with professional photographers, researchers specializing in a wide range of items, and skilled shippers � all working together to deliver detailed, accurate listings and superior service.”

    Not sure if there is anything your company can do for us except figure out a better way to ensure satisfaction and easier customer pick-up.

    a dissatisfied customer.

  • Robert H

    Go to: instead. Fast, friendly service. You can't go wrong.

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