Will eAuction-Depot Save the eBay Drop Off Franchise?
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Is Augusta, Georgia-based eAuction-Depot another dropshop cloud merchant… or have they figured out the secret to making this concept work?
UK-based Auctioning4u has thrown in the towel, saying it was unable to create a viable ebay drop-off store franchise. Industry leader iSold It, which has suffered widespread store closings, has admitted to grappling with making drop-off stores profitable. Outspoken critics Gene Bowen and Karen McGinn document fundamental flaws in the eBay drop-off store business model on their website AmITheOnlyOne.org.
But while some are sounding the death knell for the eBay drop-off store franchise concept, eAuction Depot claims they’re just getting the party started.
“OUR eBay BUSINESS IS BOOMING!” contends the eAuction-Depot website. ” …eAuction-Depot has grown 800% in franchise sales the 4th quarter of 2006 and is poised to open 75-100 stores in 2007.”
The site tells prospective franchisees: “…expect to earn an average of $6,000 profit and up per month after six months.”
The eAuction-Depot website contains numerous franchisee success stories, with details of how they’re using creative grassroots community marketing to promote their businesses.
“Jeff Henninger loves the eAuction-Depot system so much he bought two franchise stores in the Houston, Texas area…. Henninger is on pace to start doing $40-50,000 worth of monthly sales.”
“In just his third month in business, McMasters averaged about $1,000 per day in sales.”
The company claims it’s structured to enable franchisees to keep more of what they make:
“Our overall franchise fee is less than $79,990 and our royalties are a flat fee. We use a graduated scale from $400 to $800 to $1,200 per month over the life of the 15 year agreement.”
“Once you reach typical monthly revenues ($40,000) your royalty flat fee ($1,200) ends up about 1/2 as much as some of our competitor’s royalty percentages (6% or $2,400). Highly successful franchisees can get a 1 year ROI (Return on Investment) from the start up costs. With our system, expect to earn an average of $6,000 profit and up per month after six months, [emph. ours] based upon earning 35-40% commissions/shipping profits on $40,000 of total sales.”
“eAuction-Depot is a great investment and a wonderful owner/operator opportunity. We live by our Golden Rule, ‘Have fun, make money, live your dreams.’”
eAuction-Depot is either unaware or disregarding the regulations prohibiting franchisors from bandying about sales and profit figures, or implying a level of financial performance, to prospective franchisees. Blatant “earnings claims” like those on the website are red flags. On the other hand, the franchisee profiles are very specific about what their franchisees are doing to build their businesses, and paint a picture of a motivated, energetic group of owners who are taking responsibility for their own successes.
Is eAuction-Depot another eBay drop-off franchise blowing more hot air? Or could it be that eAuction-Depot really has found the secret to making this concept work: Find franchise owners who will outhustle the competition?
WHAT DO YOU THINK? YOUR COMMENTS INVITED.
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7 opinions for Will eAuction-Depot Save the eBay Drop Off Franchise?
Will eAuction-Depot Save the eBay Drop Off Franchise? at PIGASYS
Jul 22, 2007 at 2:11 pm
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chance
Jul 23, 2007 at 11:20 am
Interesting article. We have visited these infamous stores, and corporate office, and other than the fact that their inventory control is nil, and their touted software died (they went to Auctionsound a great piece of software), they are still NOT making it. Check their numbers and you will see that they are as far down or further than the other franchise drop off stores. They are doing nothinig different than those who have already attempted every and anything. Sorry folks but this company is just a late bloomer, and has alot to learn.
sean
Jul 23, 2007 at 12:19 pm
Chance:
Can you explain how people can go about checking the numbers of a given company on eBay?
chance
Jul 23, 2007 at 1:06 pm
Sure can! If you go to AmITheOnlyOne.org and click on EsellerStreet, for pennies you can pull 30-60-90 days of statistics on any ebay id. Or you can go to eBay and go to their advanced search and put in any id you wish to check, as well as completed auctions. Example is Isoldit.CA* which should bring up any store they have in California (* means anything), or try Snappy*. Remember that $25,000 or whatever in sales is gross not net!
Kel
Dec 3, 2007 at 10:40 am
Well, Chance pretty much nailed it! Not only are the corporate phones disconnected, one of the original owners is on the process of filing bankruptcy. HE has left a trail of bad debt across town that you wouldn’t believe. And, I heard from one of the burned franchisees that other francisees are also jumping on the bandwagon and going after him. Luckily for the latter of the two male owners, he got out in time. but, the short, Asian one (cannot mention his name without fear of a lawsuit), has stuck it to many of us in town - last total I heard was about $500,000 he’s bailed on and left us holding the bag. He’s trying to file bankruptcy, but several are filing motions to have ot thrown out. He screwed us and shouldn’t ba able to walk away from it. He’s also co-owned 3 or 4 business in the past several years and has sold those off and made out like a bandit, but claims he’s broke????
Run away from anything e-auction depot related!!!
from: http://www.pigasys.com
Karen OQuain
Dec 11, 2007 at 4:43 pm
If you know how to reach Jeff Henninger with eauction Depot-Houston Texas I would really appreciate his info. Not only did he not open the 2nd location but he closed the 1st has has over $25K worth of my collectibles. I have been trying to locate him with no luck. Also tried to get info from E Auction Depot Corporate Office with no response.
Thanks for any direction at all. Karem
Mr. Style
Feb 26, 2008 at 1:13 pm
I have the eAuction Depot in Augusta, GA (the only store that has ever made it!) yes Corporate Office has hurt our rep. and stole our money, even (never payed our rent one month) the only way to keep this biz going is 32 hours a day & 9 days a week. Your always working, never a break. i walk into our office every monday with over 100 items to mail / ship out! if your young its fun, but remember it takes alot of $10.00 items to pay a $2500 rent every month and all the other bills! dont just jump into the biz untill you talk to me!!!!!
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