Profile: After the Gold Rush

The Sellery outlasts the boom and bust of eBay drop-offs.

by staff writer
- Mar 23, 2010
The Sellery team: Brett, Thomas and Armando

Austin, Texas, has long been considered a cultural and economic center, rich in history, art, business and technology. "It's an entrepreneur's heaven," says Armando Filoteo, manager of eBay drop-off store The Sellery.

The city more recently has been a magnet for consignment merchants looking to cash in on the eBay bonanza. Having predated the boom, Filoteo and business partner Thomas Hallock witnessed many of these stores' rapid growth—and their ultimate collapse.

"We saw all these eBay drop-off stores come in—there were seven in Austin, alone—and they all tanked," Filoteo recalls. "They didn't know eBay; they weren't passionate about it; they simply saw it as a gold rush. But when people see you listing junk, they bring you more junk. And it wasn't long before those guys were drowning in junk."

The Sellery, he notes, has outlasted by keeping its overhead low, and by being selective with consignments, accepting only items worth upward of $50. The company's average selling price in 2009 was $150.

"We noticed that when we started being more picky, our consignments started getting better and better," Filoteo says.

Being in an area abundant with high-tech and live music, the store deals primarily in computer and networking gear as well as musical instruments. There's a testing lab in the shop where they validate that electronic equipment is working correctly before it's accepted for consignment.

But they also see their share of collectibles. Filoteo recalls a man who came in with a collection of 80 Godzilla figures. The lot sold for $1,100.

"A week later, he came back with 300 Ultraman action figures," he laughs.

"About 75 percent of our customers have five or more items to sell. And when you have more than one item that you have to research, photograph, list, pack and ship, that's work," he explains. "The other 25 percent of our customers probably could do it themselves, but they don't have high enough feedback or the visibility."

Auctiva helps us keep our costs down

Staking a claim

Filoteo and Hallock were no strangers to selling on eBay when they teamed up in 2008. Both had been eBay Trading Assistants for a number of years—The Sellery was started by Hallock in 2005. When Hallock moved his shop literally a few doors down from Filoteo's the two became friendly competitors. Realizing that Filoteo's marketing expertise could nicely compliment his technical background, Hallock successfully courted Filoteo into joining The Sellery, effectively merging their two shops, and creating The Sellery as it is today.

The combination proved successful. Filoteo, who is also a DJ, manages the shop and handles the marketing and advertising aspects, while Hallock, a Web developer, sees to the technical side. With the addition of chief eBay lister Brett Reeves, and two employees, who help with listing and packaging, The Sellery has grown into a full-scale eBay consignment operation with a 1,000-square-foot suite in an office building.

The Sellery owes much of its success to a Selling Manager Application they developed in-house for eBay Trading Assistants called The Sellery Tools. Their software automatically calculates payouts for shop workers and referrers based on the amount of commission taken from sales. The Sellery's software also automatically e-mails consignors reports on their active listings and recent payouts. The Sellery is planning on a public release of the software by the second quarter of 2010. Keep an eye out for The Sellery Tools in eBay's Selling Manager Applications Directory.

"The Sellery Tools keeps our consignment shop profitable by aligning the amount we pay our workers with the amount that we make in commission from sales," Hallock notes.

Tooling up

For the listing process, they use a combination of Garage Sale (when listing on a Mac) and Auctiva. Filoteo has been a fan of Auctiva's eBay listing tools since he learned of them five years ago at eBay Live.

"I like that Auctiva is Web-based so you can manage your listings from anywhere," Filoteo says. "It also helps us keep our costs down. We use the free scheduling quite a bit. On eBay, it's 10 cents to schedule a listing. If you do 100 listings, that's 10 bucks out of your profits.

"And the ability to save and upload a lot of pictures to your listings is super valuable because it's 15 cents a picture on eBay," he adds.

The Sellery uses Eye-Fi wireless camera cards to accelerate the listing process with Auctiva, notes Hallock.

It's exciting because you never know what's going to come through the door next

"With Eye-Fi cards, it's trivial for us to take 30 to 50 photos or videos of an item," he says. "By the time we're finished taking photos and videos, the Eye-Fi card has already uploaded them and they're ready to be inserted into our Auctiva listings."

The shop is also experimenting with video marketing via YouTube. They've had positive results after creating several Home Shopping Network-style videos for selected consignments.

"We see traffic increase when we do this, and we can only assume this affects the final bid," Filoteo says.

Though 80 percent of The Sellery's leads are a direct result of Google advertising, he sees social media, like Twitter, Facebook and blogging, as a "content monster" to help feed keywords to the search engine spiders.

"I've gotten a couple of leads from Twitter," he says. "I also use Twitter to follow Auctiva and all the eBay gurus. It's cool because I'm getting useful information and insights right from the leaders of my industry."

Forging ahead

The consignment business is unpredictable, but The Sellery is on a pace to turn over $200,000 in sales this year. The company is also hoping to partner with a large furniture consignment chain, which would significantly increase their inventory intake. On the sales side, though, eBay remains their exclusive channel. While they've considered selling on Amazon, "eBay's auction-style listings work best for the expectations of most of the consignors that come through our shop's door," Filoteo says.

"What Thomas and I are trying to do is something that works and helps people—not just to make a buck," Filoteo says. "It's also exciting because you never know what's going to come through the door next."

About the Author

Auctiva staff writers constantly monitor trends and best practices of those selling on eBay and elsewhere online. They attend relevant training seminars and trade shows and regularly discuss the market with PowerSellers and other market experts.

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