An aging generation

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Question for you team, I have a good freind who’s father passed away in 13 and his mother isnt doing to well now either. His parent’s were the American Dream story and were together for 50+ years. Of course, during this timeframe they accumulated 50 years of middle/high class stuff. Some on the high end of collectorables and some regular stuff. He contacted me this morning asking if I would be willing to list his parent’s stuff on the store and share the % with me. To include, a late model Mercedes. I have heard on the podcast about eBay drop stores and all … My question is, What do you guys think of this? Pros/Cons – Is it worth it after you pay taxes, eBay fees and shipping? My store is super small right (61) now and I have been listing one/two a day and selling one or two a week.

Thanks for your help, as always ~

[PickingPair]

My first thought is they should auction off the estate locally and be done with it. Yes, it would bring less money per item, but it would all be gone. Actually it might be a wash financially, because if you sold things for them on bay at a higher price, and then took your cut, it might be about equal.

My second thought is that a legal consignment agreement should be drawn up, with terms covering many aspects. I’m sure there are agreements “out there” that have proven themselves through time to be equitable and complete.

[Dirk]

Consignment can be worth it and a good way to build inventory without putting up capital. Just make sure you set the expectation properly when you start and as PickingPair said make sure to have a written agreement.
Also doing business with friends/family is always tricky, I have a couple I have done stuff with for years, but the majority of them I will not do business with too much emotion involved and not worth losing friends over.

[Sharyn]

As far as being worth it, it depends on the value / price for the item. If you list something for $10, how much would you get after it sells? Probably not worth it even if your commission was 50%. Were you to sell the Mercedes (and I’ve never sold a car on eBay), yes, that would be worth the commission. (I don’t know if eBay is the best place to sell a car or not.)

You would need to decide the minimum value you would want to sell (maybe $30?), and either refuse less expensive items or group them up in lots that at least meet your minimum.

Then you need to decide your commission rate. I do consignment for a family friend. I will do less expensive items because I am doing it partially as a favor. I decided on a commission fee of 50% up to $100 and 35% above that. For something higher than a few hundred, like a car, probably the commission should be lower. I originally set the 35% at a value less than $100, but decided that it wasn’t worth it.

I do not take the eBay & PayPal fees out prior to determining my cut, so I am really taking less than 50%. I do this mostly out of laziness. You should decide whether to take out the fees (about 13%) and/or cost of shipping supplies prior to determining your commission.

After that, as mentioned above, you would need a written agreement (to include all your decisions above). I do not have one, just agreements in emails back and forth. Another friend asked me about consignment for her, and, if I do it, I will make sure to get something written.

[T-Satt]

I agree with all above. We have done some consignment, with our percentage ranging from 25% to 50% AFTER all shipping and fees.

Pros are as stated, building inventory and cash without any cash investment (so the ROI on cash is infinite). The Cons are what is the ROI of your TIME, and can you keep a solid relationship while this goes on. The written agreement is huge on this.

If you can go through the items, separate out for garage sale/donation items that sell for less than what you want to make per hour. For example, if you expect $40/hr and you can photo and list 4 items per hour, you could set $10 net profit (your cut based on the % you will keep after shipping and fees) as your line for what to keep, so that you are working for $40/hour. Factor in shipping time for items that take longer to pack into your listing time. The car should be a separate item completely.

Also, make sure that they understand that what they paid for each item, or what they think it is worth, does not matter. The eBay market sets the price, and they have to know that up front. Communicate that clearly.

[JunkPicker]

I have done a few estates thru ebay over the years. A very big important factor is time frame. How long will it take you to list an dispose of all the items? This could take months up to years!! Also many items will not sell for whatever reason. It sounds great but as others mention much to consider before you jump in.

[annabel52]

Just remember that just because you are friends this is business. 50% after fees is a fair price. I listed some items for my daughter and I deducted the fees, postage from the sale price and split the profit 50-50. She and I soon learned that something that sells for $20 is not worth the trouble for either one of us. She only sold a few items, thank goodness.
One thing no one has mentioned is the speed that things sell. Does your friend realize that some things may take a long time to sell? It isn’t list it today, sell it tomorrow for almost everything. Of course if you get to pick and choose the items and you can choose items that have a quicker turn around time. How often does he expect payment? Consider also that a buyer can return an item as much as 30 days after the sale. Who is responsible for the refund if you can’t cover the amount in your paypal account?
I have sold several motorcycles on ebay and had good luck with the first one and sold the second one twice because of non payment the first time around. The Mercedes should be top quality or a sought after model or it won’t be worth your time to reply to all of the inevitable questions. I never realized that someone could ask such specific questions about a motorcycle until I listed the first one. Glad my hubby knew all the answers.

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