AuctionDrop, based in Northern California, will announce today that its eBay drop-off service is available in all 3,400 nationwide locations of The UPS Store, including 50 stores in San Diego County.

The service allows customers to drop off selected items worth $75 or more - such as antiques, electronics and musical instruments - and have them photographed, listed, sold and shipped from a central processing hub. Fees range from 20 percent to 38 percent of the final sale price.

"We're trying to remove all the barriers to selling things on eBay," said Randy Adams, AuctionDrop's chief executive.

By partnering with the San Diego-based UPS Store, formerly Mail Boxes Etc., AuctionDrop becomes the first eBay drop-off store to go national.

In just over a year in business, AuctionDrop had set up five stores in Northern California that took in between 15 to 30 items per day per store. In total, they placed 24,000 items for sale and paid out more than $1.8 million to customers.

A new processing facility in Fremont can handle up to 5,000 items per day.

After a customer drops off an item at his local UPS Store, AuctionDrop pays the shipping charges and the item is sent to the Northern California processing center, where it's photographed, listed and sold. If an item doesn't sell, it is sent back to the owner and AuctionDrop eats the shipping charges.

"With the 3,400 stores opening around the country, everyone in America can find it easy to sell things on eBay," Adams said.

But AuctionDrop has competition. PostNet, a Nevada-based copy shop chain with three stores in the San Diego area, also offers eBay drop offs. The company plans to grow from 11 to 100 franchises by the end of the year.

The three other players are QuikDrop, based in Costa Mesa; iSold It, based in Pasadena; and NuMarkets, which has headquarters in Tennessee.

The drop-off business isn't huge for eBay, but it's growing, said Scott Kessler, Internet retail equity analyst for Standard & Poor's.

With roughly $1.1 million in sales last month, the channel accounted for less than 1 percent of eBay's gross merchant sales in the United States, he said. But he predicts that number will jump to around 2 percent by 2008, with $1 billion a year in domestic sales, and there will be more than 5,000 such stores by the end of next year.

Patti Freeman Evans, retail analyst for Jupiter Research, says AuctionDrop will benefit from The UPS Store's national advertising presence and pre-existing shipping outlets.

But she warns that eBay may actually suffer if customer service fails to meet expectations.

"If these two companies can provide a consistent, trustworthy, reliable customer experience - and consistent is in all caps - then it can only be good for eBay," she said. "The risk to eBay is that AuctionDrop and The UPS Store don't provide that consistent and trustworthy experience and there are lots of glitches. That could undermine eBay's overall sense of ease."

Source:auctiondrop.com