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Consignment Selling Software for Online-Auction Sellers
By Andy Geldman
September 26, 2004

I frequently get asked for advice on eBay software. It's a big area, and the questions I'm asked cover every category - auction management, analysis, sniping, and more. Recently, however, one question gets asked more than any other: what is the best software for consignment selling on eBay?

At first, I couldn't see what the big deal was. Why does a consignment seller need more from software than a regular eBay seller? Many auction management services include image hosting, auction listing, email automation, and much else besides. What more could they want? So I looked into it, and found that consignment selling actually presents many new challenges. The most fundamental is that the seller, or consignee, does not make money directly from the buyer of an item, but from the consignor - the person who owns the item being sold and pays the commission.

Like all sellers, consignees have to keep the buyer happy, but also need to manage the consignment process and provide an excellent service to consignors - without them they don't have a business. This requires linking inventory and auction listings with consignors, maintaining a database of consignor information, and administering accounts and payments.

The challenges don't end there. Consignment sellers make their money from the sheer volume of merchandise passing through their hands, so their software has to cope with that volume, and be very reliable. Specialist equipment such as barcode scanners may become necessary, and they need to work with the software.

A further challenge, and one that is new to many eBay traders, is the management of a retail store, known as a "drop-off" store. It may be acceptable to reply to an email within hours or days, but when your customer is standing in front of you, an immediate reply is required. Software for a consignment store has to be intuitive, fast, and scalable, so that contracts, inventory details, and account balances are a few keyboard taps away. Darren Henderson, Operations Director of SellStuffEasy, a drop-off store based in London, England, said, "To run an eBay drop-off store you need software to cover the inventory of what you receive from sellers, send updates to buyers as the auction progresses, auction management software and accounting software."

So where do you go for consignment selling software? There are two approaches to this: you either look for auction management software with consignment features, or consignment store software with online auction features. Despite the hype around consignment selling, neither industry has been quick to develop crossover products. Two notable exceptions are Meridian, an auction management service from eBay PowerSeller NobleSpirit; and Resaleworld, the leading provider of software to consignment stores.

Meridian is a Web-based auction-management service offering listing, end-of-auction, payment processing, shipping, and reporting functions. A consignment-selling module was launched at eBay Live in June this year that supports multiple commission plans, permission-based commercial accounts, and online item tracking for consignors. Pricing starts at $9.95 to list up to 500 items per month, plus $30 per month for the consignment module. A successful consignment store may find the Zenith membership level at $59.95 per month for up to 4,000 items more suitable.

Joe Cortese, CEO of NobleSpirit, said, "We were prompted to develop a consignment offering due to the growing needs of eBay consignment sellers and the lack of services currently available to meet them. We see it as an opportunity to further distinguish our service from the sea of other services out there."

Resaleworld has been supplying software to conventional consignment stores since 1991 and reports a 90% market share in the U.S. In 2004, Liberty 4 Trading Assistants was launched, a version of their flagship Liberty product for eBay consignment sellers. Resaleworld's background means the feature set for consignment selling is very rich, while auction-management features are being continually developed.

Liberty 4 Trading Assistants is a desktop application that interfaces directly with eBay over the Internet. Alternatively, users can choose to list auctions via partner Marketworks (the online auction-management service formerly known as Auctionworks). Pricing starts at $795 for a single-user license.

Ed DiRuzza, President and CEO of Resaleworld, said, "We began developing support for eBay four years ago. Shortly after, our customers started asking for more features and we have been improving the product ever since. I expect our sales to drop-off stores to surpass those to traditional consignment stores by the end of the year - we aim to be the dominant player in this market."

So, what is the best software for eBay consignment selling? The key question to answer is this: do you consider yourself an eBay seller who happens to take items on consignment, or a consignment seller who happens to sell on eBay? If it's the former, you may be happy to use an auction management service and put up with fewer consignment features. If it's the latter, look at consignment store software for its deeper retail management features.

SellStuffEasy's Henderson advises sellers to spend time defining their process and invest in putting together their own software packages. "There is no perfect solution currently available on the market," he said.

The jury is still out on the potential of drop-off stores, but if they live up to the hype, we can expect the software market to become much more active in the future. And that can only be good for the consignment seller.

Resaleworld: http://www.resaleworld.com

Meridian: http://www.noblespirit.com

SellStuffEasy: http://www.sellstuffeasy.com

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