Firms jump on the eBay wagon (article ran 5/2004)
By Matt Krantz, USA TODAY
PASADENA, Calif. — Mike James pocketed $3,000 in 10 days by selling loads of old stuff on eBay. He sold his battered cowboy boots. He unloaded some dust-collecting artwork. He even hooked a buyer for his Eddie Bauer fishing vest.
And he did it without turning on his computer.
Too busy to fuss with the multiple steps of listing goods on eBay — the online bazaar for regular folks — James, 43, instead dropped it off at the just-opened iSold It store. ISold It sweated all the annoying parts of selling on eBay: It took digital photos of the items, fielded questions from potential bidders, then shipped things to the eBayer with the highest offer. About all James did was wait for the check in the mail.
The rub for eBay is that iSold It isn't run by eBay. EBay hasn't even invested in it. Instead, iSold It is a business, started by a hot-pretzel chain co-founder who — like many others — is eager to ride the swelling success of eBay. Why munch on pretzels when there's an entire e-economy to feed on?
ISold It may be just the beginning. Scores of companies are springing up to do everything from helping computer neophytes sell the dusty Tonka trucks piled in their basements to assisting Best Buy auction its surplus DVD players and laptops. There are even companies whose only function is to help eBay buyers and sellers get better prices.
Hello, eBay economy.
EBay has become an immovable e-force in world business and culture. The value of items sold on eBay grew 60% last year and hit $24 billion — making it larger than the gross domestic products of Bulgaria or Jamaica. With that kind of commerce, it's no surprise that eBay is spawning schools of new companies that want to plug into it.
While these companies mostly view themselves as savvy marketers, it might seem as if eBay executives would be put off by them, considering them to be bloodsuckers.
Not at all. In fact, eBay has tried to help them.
"The entrepreneurial spirit of the eBay community has always been strong, so it isn't surprising that these businesses are being created around the eBay trading platform," says Jeff Jordan, senior vice president of eBay North America. "We encourage this kind of growth — anything that makes eBay more vibrant, easier to use or more fun is a good thing."
In fact, on Wednesday, eBay is sponsoring its first United States of eBay conference in Washington, D.C., which will include meeting with members of Congress. It is gathering 51 small-business owners, one from each state and the District of Columbia, who make at least part of their living by selling on eBay.
The rise of the eBay offshoots is a sign eBay, an invention of the dot-com era, is coming of age and becoming something even bigger.
EBay may be enjoying what Alvin Roth, professor of economics and business at Harvard University, refers to as the "network effect." In other words, "It gets more attractive to buyers the more sellers it attracts and more attractive to sellers the more buyers it attracts, and so it becomes a more attractive marketplace as it gets larger," he says.
This is what usually happens with most good business ideas. The invention of the automobile spawned industries such as oil, auto-parts stores, car washes and even drive-in theaters. Kodak's invention of low-cost photography gave rise to one-hour photo developers and even photos of the kids with Santa Claus at the mall. Each was a phenomenon in itself, but all were tied to the growth of the underlying industry.
EBay is proving to be the first invention of such importance in decades. More than $894 worth of goods were sold through eBay every second during the fourth quarter of 2003. There are about 95 million registered users, which is larger than the population of France, Italy or Germany.
The growth of the eBay economy is blooming from three key areas, including:
Trading posts.
For Elise Wetzel, the idea of starting iSold It came from her reluctance to sell "overpriced candy bars." Rather than a cheesy drive for her kids' preschool fundraiser, Wetzel and a group of other mothers cleaned out their garages and came up with goods they wanted to sell on eBay. There was one problem: They didn't know how to sell things on eBay.
So Wetzel, who co-founded the nation's No. 2 hot-pretzel chain, Wetzel's Pretzels, with her husband in 1994, started iSold It.
Think of the company as a cross between a pawnshop and a garage sale. Here's how it works. Sellers empty their garages and haul in their Franklin Mint coins and porcelain dolls to the iSold It store. Staffers take the items, photograph them and post them on eBay. When the items sell, iSold It takes a 28% cut and sends a check for the remainder to the seller.
ISold It's one store has been open only since Dec. 15, but the race is already on for a nationwide rollout. It has sold more than $100,000 worth of goods on eBay each of the past three months.
Los Angeles is proving to be the first battleground, as iSold It and a rival, San Carlos, Calif.-based AuctionDrop, plan to open more stores here to begin a nationwide push.
AuctionDrop, which was founded in 2002, has already plastered billboards in Los Angeles promising to open stores everywhere from Pasadena to Santa Monica.
Randy Adams, an admitted gadget freak who used eBay to sell his slightly old digital cameras, started the company in July 2002. AuctionDrop is already selling thousands of items a month and has even lined up venture-capital funding. The value of all the items it sold online the past three months has averaged $284,000 a month and reached $2.3 million over the past year.
Perhaps more than any company, eBay knows what stuff is worth. It has data on what G.I. Joe action figures were going for in 1998 and what they were going for an hour ago.
Now, other enterprising companies are realizing just how valuable that information is and are figuring out how to profit from it.
For instance, a company called 3balls has licensed pricing data eBay has on golf equipment. 3balls is now making that data available at the Professional Golfers' Association's Web site at PGA.com. Golfers can describe a club they have — and find exactly what the club is worth.
Now, 3balls is developing that into a business by teaming with pro shops. Golfers can bring their old gear to pro shops and get paid immediately. The pro shops can do this because they're confident, thanks to the data from 3balls, of the price for which they will be able to resell the equipment.
EBay data are even showing up on personal tax returns. Financial software maker Intuit licensed data last year from eBay to make its "It's Deductible" software that determines how much the old baseball gloves and shorts you donated to Salvation Army are worth. It calculates the amount and tells you how much you can report to the IRS.
While the number of eBay offshoots grows, there's always the daunting possibility that eBay could squash them if it took an interest in any of the businesses. There's always the chance, no matter how remote, that eBay could open hundreds of eBay stores around the country almost overnight.
Harvard's Roth points out that eBay has sued some companies that plugged into it before, including Bidder's Edge, which compiled eBay data. EBay accused it of trespassing and won an injunction.
"If you have a business that involves eBay, particularly one that involves providing services to eBay customers, you run a risk that eBay will change its business practices in a way that could harm you," he says.
But Wetzel and Adams say the chance of this happening isn't keeping them up at night. Adams says he got assurance from the top.
"One is always concerned when creating a business with a dependency on another company," Adams says. But he was comforted after Meg Whitman, CEO of eBay, toured the company's headquarters this year and sat down with AuctionDrop's management. "Meg looked me in the eye and said, 'I assure you we're not going to get into it.' "
Just don't bet your weathered cowboy boots on it.
Thursday, July 5, 2007
Tuesday, July 3, 2007
Elise Wetzel from PTA to eBay (iSold It)
Elise Wetzel From the PTA to eBay, this alum's entrepreneurial venture is a winning bid
Excerpt from In Depth, Summer 2005, Kellogg World Alumni Magazine, Kellogg School of Management
By Rebecca Lindell
Once you have a "marketing mind," it can be difficult to turn it off, Elise Wetzel says.
Wherever you look, you will find inspiration for the next big thing - even if you're a mother who has just decided to take a sabbatical from a 15-year marketing career to spend more time with your two small children, as this 1992 Kellogg School graduate did in 2002. Wetzel stepped down from her job as a director of marketing at Unilever to enjoy a few years at home with her kids, then ages 2 and 3. Like many professional women who temporarily leave the workforce, the San Marino, Calif., mom was soon itching to find a new way to exercise her skills. The likeliest outlet seemed to be her children's preschool, which was attempting to raise funds for a new layground.
"I told them, 'I'm available, I'm Type A, I'm here to help," Wetzel says. So the school put her in charge of the fund-raising drive, which put parents to work selling candy and gift wrap. Wetzel had a better idea. Why not stage a virtual garage sale on eBay, and direct all the proceeds to the school? To test this plan, Wetzel, a veteran eBay buyer, started listing a few cast-off items for sale on the Internet auction site. But she soon grew frustrated with the laborious process. "It quickly became apparent that it was a lot easier to buy things on eBay than it was to sell them," she says. Wetzel searched for a local drop-off center that would handle eBay sales. To her surprise, nothing of the sort existed. And so was born Wetzel's idea for iSold It (i-soldit.com), the nationwide chain of drop-off stores that is now the number-one seller on eBay. "The idea went through me like a lightning bolt," Wetzel recalls. "I couldn't believe there wasn't already something like this out there." The Kellogg grad opened her first iSold It store in Pasadena in December 2003. Inspired by her husband, the co-creator of the Wetzel's Pretzels chain,
Wetzel established iSold It as a franchise model. Sure enough, within several months of her launch, Wetzel began receiving requests for franchises. Now there are 100 iSold It franchises throughout the country, with an average of one store opening every other day. By the end of 2005, Wetzel expects to have 200 stores in operation. "We're building a world-class brand," says Wetzel, who draws heavily on her academic training at Kellogg to ensure that iSold It becomes the most recognizable eBay drop-off chain in the marketplace. iSold It workers photograph the items, write the descriptive copy, answer questions from bidders, collect payment, and package and ship the items after they are sold. In exchange, the stores collect a commission of up to 30 percent of the item's selling price. Roughly 10,000 items are dropped off for sale at iSold It stores each week. Together, the shops have completed more than 200,000 auctions on eBay. "The growth has been beyond our wildest expectations," Wetzel says. "We
really hit a nerve with consumers. We hadn't expected to grow so quickly." For Wetzel, it's been quite a change from the stay-at-home lifestyle she envisioned when she decided to shift gears three years ago. "This has been sort of an accidental re-entry into the workforce," she says.
"The timing actually was great, because my son was starting preschool when I got back into it.
"I knew I had to move quickly," she adds. "When you feel that you're on to a big idea, it's important to chase it sooner rather than later. Windows of opportunity do open, but after the first movers and market leaders are established, the windows can close." Last year, Wetzel hired a president and CEO with whom she shares responsibilities for running the business. "That's really helped me regain some of the work/family balance I'd left at the door," she says.
Even Wetzel's children have proven to be sharp-eyed participants in their mother's venture. In fact, the two have convinced their parents to unload more than a few family items on eBay.
"There isn't much left in my house," Wetzel says with a laugh. "We've auctioned off a lot of it."
Excerpt from In Depth, Summer 2005, Kellogg World Alumni Magazine, Kellogg School of Management
By Rebecca Lindell
Once you have a "marketing mind," it can be difficult to turn it off, Elise Wetzel says.
Wherever you look, you will find inspiration for the next big thing - even if you're a mother who has just decided to take a sabbatical from a 15-year marketing career to spend more time with your two small children, as this 1992 Kellogg School graduate did in 2002. Wetzel stepped down from her job as a director of marketing at Unilever to enjoy a few years at home with her kids, then ages 2 and 3. Like many professional women who temporarily leave the workforce, the San Marino, Calif., mom was soon itching to find a new way to exercise her skills. The likeliest outlet seemed to be her children's preschool, which was attempting to raise funds for a new layground.
"I told them, 'I'm available, I'm Type A, I'm here to help," Wetzel says. So the school put her in charge of the fund-raising drive, which put parents to work selling candy and gift wrap. Wetzel had a better idea. Why not stage a virtual garage sale on eBay, and direct all the proceeds to the school? To test this plan, Wetzel, a veteran eBay buyer, started listing a few cast-off items for sale on the Internet auction site. But she soon grew frustrated with the laborious process. "It quickly became apparent that it was a lot easier to buy things on eBay than it was to sell them," she says. Wetzel searched for a local drop-off center that would handle eBay sales. To her surprise, nothing of the sort existed. And so was born Wetzel's idea for iSold It (i-soldit.com), the nationwide chain of drop-off stores that is now the number-one seller on eBay. "The idea went through me like a lightning bolt," Wetzel recalls. "I couldn't believe there wasn't already something like this out there." The Kellogg grad opened her first iSold It store in Pasadena in December 2003. Inspired by her husband, the co-creator of the Wetzel's Pretzels chain,
Wetzel established iSold It as a franchise model. Sure enough, within several months of her launch, Wetzel began receiving requests for franchises. Now there are 100 iSold It franchises throughout the country, with an average of one store opening every other day. By the end of 2005, Wetzel expects to have 200 stores in operation. "We're building a world-class brand," says Wetzel, who draws heavily on her academic training at Kellogg to ensure that iSold It becomes the most recognizable eBay drop-off chain in the marketplace. iSold It workers photograph the items, write the descriptive copy, answer questions from bidders, collect payment, and package and ship the items after they are sold. In exchange, the stores collect a commission of up to 30 percent of the item's selling price. Roughly 10,000 items are dropped off for sale at iSold It stores each week. Together, the shops have completed more than 200,000 auctions on eBay. "The growth has been beyond our wildest expectations," Wetzel says. "We
really hit a nerve with consumers. We hadn't expected to grow so quickly." For Wetzel, it's been quite a change from the stay-at-home lifestyle she envisioned when she decided to shift gears three years ago. "This has been sort of an accidental re-entry into the workforce," she says.
"The timing actually was great, because my son was starting preschool when I got back into it.
"I knew I had to move quickly," she adds. "When you feel that you're on to a big idea, it's important to chase it sooner rather than later. Windows of opportunity do open, but after the first movers and market leaders are established, the windows can close." Last year, Wetzel hired a president and CEO with whom she shares responsibilities for running the business. "That's really helped me regain some of the work/family balance I'd left at the door," she says.
Even Wetzel's children have proven to be sharp-eyed participants in their mother's venture. In fact, the two have convinced their parents to unload more than a few family items on eBay.
"There isn't much left in my house," Wetzel says with a laugh. "We've auctioned off a lot of it."
iSold It is 2006 Priority Magazine's Small Business of the Year
Excerpts from Priority Magazine (article ran 9/2006)
We'll Sell It!
With dynamic leadership, explosive growth, and a savvy business model that allows customers to bring their goods to brick-andmortar locations to be sold on eBay, iSold It is our 2006
Priority Magazine Small Business of the Year
by Reed Richardson
From her very first customer, Elise Wetzel suspected that her new business, iSold It, might turn out to be something special. “I remember he came in wanting to sell a pair of custom- built, Tony Lama cowboy boots, size 13AAA,” Wetzel says, chuckling. “I thought to myself ‘Who
is ever going to buy these things?’” Still, she followed through on what she was convinced was a novel business idea, photographing the boots, writing up a product description, and posting a listing on the online auction site eBay. When the boots quickly sold for $65, he was hooked, she says. “Less than a week later, he was back, with even more stuff for us to sell for him, and, to this day, he still comes in.” He’s not alone. In fact, since that first store opened in Pasadena, CA, in December of 2003, hundreds of thousands of other customers across Europe, North America, and Australia have joined him.
OVER THE COURSE of a year, we here at Priority interact with hundreds of small businesses, sharing their stories so that others can learn from their mistakes and profit from their successes. However, when it comes time to bestow our magazine’s Small Business of the Year
Award, we look for those entrepreneurs that truly stand out, that have successfully combined passion and innovation with execution and results. So, in our previous issue, we put out a call for candidates and the nominations poured in from across the country. The competition was indeed stiff, as you can see from reading about the other four Small Business of the Year Award finalists. These companies embody the best of what entrepreneurship is all about—taking an idea and making it soar—all the while celebrating the triumphs and enduring the occasional
trip-ups that occur along the way. But of all the small businesses we examined, iSold It’s fascinating story impressed our editorial staff and our publishing partners at Pitney Bowes more than any other. Its groundbreaking business model—an amalgam of a brick-and-mortar retail shop and an online consignment store—coupled with its astronomical growth these past
two-and-a-half years made that company our clear choice. So, it is with great pride that we select iSold It as the well-deserved winner of The 2006 Priority Magazine Small Business of the Year Award.
We'll Sell It!
With dynamic leadership, explosive growth, and a savvy business model that allows customers to bring their goods to brick-andmortar locations to be sold on eBay, iSold It is our 2006
Priority Magazine Small Business of the Year
by Reed Richardson
From her very first customer, Elise Wetzel suspected that her new business, iSold It, might turn out to be something special. “I remember he came in wanting to sell a pair of custom- built, Tony Lama cowboy boots, size 13AAA,” Wetzel says, chuckling. “I thought to myself ‘Who
is ever going to buy these things?’” Still, she followed through on what she was convinced was a novel business idea, photographing the boots, writing up a product description, and posting a listing on the online auction site eBay. When the boots quickly sold for $65, he was hooked, she says. “Less than a week later, he was back, with even more stuff for us to sell for him, and, to this day, he still comes in.” He’s not alone. In fact, since that first store opened in Pasadena, CA, in December of 2003, hundreds of thousands of other customers across Europe, North America, and Australia have joined him.
OVER THE COURSE of a year, we here at Priority interact with hundreds of small businesses, sharing their stories so that others can learn from their mistakes and profit from their successes. However, when it comes time to bestow our magazine’s Small Business of the Year
Award, we look for those entrepreneurs that truly stand out, that have successfully combined passion and innovation with execution and results. So, in our previous issue, we put out a call for candidates and the nominations poured in from across the country. The competition was indeed stiff, as you can see from reading about the other four Small Business of the Year Award finalists. These companies embody the best of what entrepreneurship is all about—taking an idea and making it soar—all the while celebrating the triumphs and enduring the occasional
trip-ups that occur along the way. But of all the small businesses we examined, iSold It’s fascinating story impressed our editorial staff and our publishing partners at Pitney Bowes more than any other. Its groundbreaking business model—an amalgam of a brick-and-mortar retail shop and an online consignment store—coupled with its astronomical growth these past
two-and-a-half years made that company our clear choice. So, it is with great pride that we select iSold It as the well-deserved winner of The 2006 Priority Magazine Small Business of the Year Award.
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