by Andy

AuctionWagon Interview

We talk to Joshua MacAdam, President of AuctionWagon about the company's consignment selling management solution.

Tags: Interviews

WR: You opened one of the world's first eBay drop-off stores in Los Angeles. How did you get into that business?
JM: I was looking for a new business to get into after the dot-com craze had ended, and I really wanted to find something new and challenging. Nobody had even heard of this concept before, and it was very appealing. I thought it would be nice to get away from the computer business, and interact with real people more. I found a friend from my home town in Los Angeles, figured out how to install laminate flooring and hang drywall, and we scraped together just enough money to open. National press coverage announced our opening ahead of everyone else. Well, as it turns out I'm back in the computer business now, but I get to visit stores all the time.
WR: How does running a drop-off store compare to being a software company?
JM: Less shipping. Other than that, it's really not a lot different! The drop-off business is a very dynamic one, so whether you are working on code or deciding whether or not to accept that particular Swarovski Crystal, you're dealing with very interesting and quickly changing problems. Our AuctionWagon Network product keeps us actively selling on consignment as well, so we still feel very involved in the day-to-day operations of a regular drop-off store.
WR: What kind of people do you have in the AuctionWagon team?
JM: Brilliant ones! We have ex-Microsoft product managers, former dot-com entrepreneurs, and of course, former store operators. For support and product management, we like to hire eBay drop-off store managers. When we can't do that, we subject new hires to the biggest headaches our beta sites can dish out while they work there for a couple of weeks. Then they get to come to the office and create solutions for everything that was making life difficult. This is really a fun industry to be in, and we get to invent new ways of doing business every day. Our people are the kind that like that sort of thing.
WR: Store Manager Pro is built on the "G2 Platform". What is that?

I'm surprised that I don't get asked that more often! G2 is something we are all very proud of here because of its depth and sophistication. Many companies will put a piece of software out there and call it a "platform" or "environment" when it is really just an application.

G2 is something that we will be developing as a product of its own in the future. Basically, all of the software we write falls into a simplified framework which can support sales very generically. In other words, we write our applications for G2, not for eBay. If an item is labeled as eBay it will post to eBay and follow appropriate process. If it is labeled as Craigslist it will go there. G2 not only abstracts the marketplaces from the programming, but it allows for just about the most advanced "smart-client" operation that has ever been made.

Every bit of data created in Store Manager Pro is stored locally at a store. The G2 platform then automatically replicates and synchronizes that data with our servers at secure facilities, so we can handle the complex interaction with different online marketplaces, payment gateways, and email systems. Also, our servers provide web management for consignors or businesses, so the location is detached from that responsibility. All the while, locations can operate all day long with no internet connection, and G2 makes up for any issues. It is really a pretty amazing platform, and I hope that soon we will be able to open it up for general development. We are currently investing heavily in some very powerful API and open-source projects. More on this soon.

WR: You have been very forward thinking in supporting marketplaces, such as Craigslist and Do you see that as something that differentiates you from other consignment software providers?

Absolutely. We are not focused on making software that can do some neat tricks on eBay - we make software to run businesses. We aren't going to go out and support every site that says they handle online sales, but we spend a lot of time visiting and talking with our customers figuring out what else out there could work better. And we listen - a lot.

All of our employees spend at least two days a month actually working in one of our beta sites. When things change as fast as they do here, you can't look at what's around you, you have to look at what is next. Our customers really benefit from us being right in the thick of it with them.

Craigslist has so far been overlooked by many drop-off stores who stand to significantly improve their operating efficiency and avoid some very hefty fees. I encourage every drop-off to at least try doing re-lists through Craigslist.

UK was more reactive for us. Certainly we wanted to support this from the beginning, but we underestimated its very fast growth. I got tired of answering calls and explaining that we didn't support it. So now we do. And now I'm getting calls from Germany.

WR: How do you see the drop-off store industry evolving over the next twelve months? What part will AuctionWagon play in it?

A lot of the "land-grab" mentality is fading, and the industry growth in terms of number of stores will slow dramatically. Although we will certainly see some store closings from locations which opened without proper preparation or expectations, the many solid stores our there will adapt their models and do very well. The expansion of locations will continue very quickly though, but probably not through dedicated eBay drop-off stores.

The most progressive locations are quickly adding "profit centers" such as retail pack-and-ship or computer consulting to their services. These types of offerings leverage their existing investment in retail presence, shipping supplies and equipment, and highly technical staff. Though not a regular business in the UK, full service pack-and-ship shops exist in almost every shopping center in USA. Most drop-off stores already qualify for FedEx and UPS certification and don't even know it. This can be a very significant profit stream. Certainly, the eBay drop-off store concept has evolved to where it is now a profit-center of its own, and can be included within new and existing retail focused sites.

AuctionWagon is leading this evolution. We have the AuctionWagon Network, which is explicitly targeted at profit-center scenarios. Within a half-hour, we can have a location which knows little or nothing about eBay set up to accept items for eBay and Craigslist consignment. With the AuctionWagon Network, stores simply log items in, and we take care of the rest. We do the eBay or Craigslist part, then order processing, paying consignors, and writing monthly commission checks to the store. Not only is this a great model for many types of general retail businesses, but by alleviating the tremendous complexity of eBay consignment, we can make eBay drop-off stores very profitable ventures.

WR: Thank you for your time and best wishes for AuctionWagon.

Discuss this interview here

Article Added: 18 August 2005
Last Updated: 18 August 2005

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