Auction Consignment Businesses have been around awhile. In these businesses, you set up shop somewhere, advertise, and customers bring you their stuff to sell on consignment. You sell the items on eBay or some other online auction venue, and take a cut of the revenues.
A more recent spin on this business model is the mobile auction consignment business. Instead of setting up shop somewhere, you drive around in a van or truck and pick up people’s stuff to sell on consignment. This has been advertised as a home-based business opportunity and it usually runs under the franchise model.
My friend Sydney Johnston has a blog post about one of these mobile auction consignment businesses. She really lifts the veil on this type of business and asks some very tough questions. If you or anyone you know is looking at this type of home-based business opportunity, give her blog post a read; it’s full of great points.
I’d like to expand on point number 6 which is “And who pays the eBay fees, whether the item sells or not?”. Who indeed? I can almost be certain it is not going to be the franchisor and it probably won’t be the owner of the items. That would leave the home-based business franchisee to pay them. And we may as well be honest here. You would be dealing with people’s second hand stuff (things they’ve cleaned out from their attics, basements, and garages). No doubt there would be some sellable ‘treasures’ there, but it’s safe to say that a significant percentage of it would not be sellable, especially given Sydney’s $50 price point threshold. That could leave a sizable burden of auction listing fees to pay.
I could add two more points to her list. Time and Territory restrictions. When you think about how long it would take to go pick up a van full of stuff, catalog it, photograph each piece, write up a description of each piece, and build an eBay listing for each piece – yikes! That takes a lot of time. I could easily see one van full taking up several days of work time.
Franchise arrangements are usually based on geographical territories. That would mean you would probably be restricted to a certain limited area to work in within. Unless the area is densely populated, you would eventually run out of potential customers or your growth would slow significantly. You probably would not get much repeat business in an arrangement like this, although you might get some word of mouth.
All in all, I agree with Sydney that this is a dubious opportunity and anyone interested in it will have to give some serious thought on how they would manage and grow this business.