- What’s a PowerSeller?
- What’s a Trading Assistant?
- What’s a Trading Post?
- To Franchise or Not?
This chapter is from the book
This chapter is from the book
This chapter is from the book
What’s a Trading Post?
Okay, you are a PowerSeller. You have been successfully selling stuff on eBay for your friends and neighbors. The garage is getting way too full, and it’s time to think about commercial space. The knee-jerk reaction might be to rent warehouse footage out by the airport where the rents are low. But there’s another alternative that’s becoming quite popular. You could open a retail shop called an eBay Trading Post, also known as an eBay drop store (see Figure 3.8).
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Figure 3.8 An eBay Trading Post in a retail setting.
Trading Posts are a relatively new phenomenon, and are now popping up like weeds all over the world. As you will see when we explore them in depth throughout this book they have a number of advantages but can be challenging to run profitably.
The big advantage is that a properly located retail store with a visible sign will attract a lot of attention, and therefore a lot of potential customers, leading, with any luck, to a lot of high-end items for you to sell for a fee on eBay. The potential downside is that retail trappings are expensive. Good locations are difficult to find, and often expensive to lease when you do find them. You will need considerable working capital to start a Trading Post, perhaps as much as $75,000 to $100,000 or more. Because you will only receive a portion of the final value of the auctions, you are going to need to sell a lot of other peoples’ stuff to turn the corner financially. We’ll look at some sample financial scenarios in Chapter 4, "Budgeting, Forecasting, and Cash Flow."
Trading Post Requirements
Besides having pockets deep enough to open and operate a retail business you must enter into a license agreement with eBay that includes more privileges, restrictions, and responsibilities than becoming a PowerSeller or Trading Assistant. You will be using eBay’s branding (logos, name, and other identifiers) in a very public way. They want you to do it right, in order to make the company and your store look good, so the bar’s quite a bit higher here than in the garage seller scenario. They also want to be sure nobody mistakes your store for an eBay-owned business.
The current license agreement can be found at http://pages.ebay.com/tradingassistants/license-agreement.html.
The following list provides an overview of the requirements for becoming a Trading Post. Obviously, these things change over time, so you should be sure you understand the current requirements before making any financial commitments. What follows are eBay’s general expectations at the time this book was written.
"To qualify to use any eBay Trading Post Branding, you must meet and maintain the following requirements throughout the term of this eBay Agreement:
Account Standing. Your eBay account must be kept in good standing at all times and you will pay all fees due to eBay in accordance with eBay’s then-current, generally applicable fee schedule as posted on the eBay site. No separate charge will be assessed to you for use of the eBay Trading Post Logo in accordance with the terms of this agreement.
Gross Monthly Sales. You must meet or exceed the eBay PowerSellers Platinum Tier requirements each calendar month in terms of gross merchandise sales of product via the eBay site (such sales to occur under your eBay user ID).
Feedback. You must maintain a minimum feedback rating of 500, with at least a 98% positive rating at all times during the term.
Style Guide. You must adhere to the terms of the style guide.
Customer Support. You must meet or exceed all customer support metrics established by eBay for eBay Trading Post licensees.
Program Optimization. You must participate in secret shopper, customer satisfaction surveys, and any such other efforts proposed by eBay for eBay Trading Post licensees to measure customer experience. For instance, eBay plans to institute a secret shopper program in which independent third parties will evaluate your store and the customer experience offered therein.
Agreement. You must agree to the terms of this license agreement after reading it.
Continued Membership. You must maintain compliance with all requirements (including those enumerated here) specified by eBay for eBay Trading Post licensees for the duration of the term of this agreement. You acknowledge and agree that eBay may modify or add requirements at any time with its discretion. eBay will notify you via email (at the email address you provide to eBay) of any modifications affecting your eligibility to continue to use the eBay Trading Post branding. You will have then have a reasonable period of time as specified by eBay to comply with such updated requirements."
As you can see, opening a Trading Post is not something you can do over a cup of coffee on a napkin. You will need a lawyer. You will need a commercial real estate broker. You will need someone to help lay out the store; design, construct and install outdoor signs and indoor fixtures; and someone to help with the technology if you don’t bring those skills to the party yourself.