EBay and FedEx team up to take on Pawn Industry
Monday morning FedEx stores launched eBay Drop Off. I have included pictures of the FedEx in
store display signage and EBay Drop Off counter signage that FedEx has
allocated to this new product offering.
How does it
work?
Sounds like a Pawnshop to me.
Even FedEx wants to be a Pawn Star.
We have been blogging about the direction of online
activities since 2000 with the likes of Wal-Mart and GameStop taking slivers of
the pie from the Pawn Industry.
But this… this is a big piece of the Pawn Pie. It will be a
significant hit to pawnbrokers.
We believe
UPS will follow. We believe we’ll watch the giants compete for this important
market share and customer base.
Pawnbrokers
will see product flow and margins erode.
Why are EBay and FedEx getting into the used merchandise business?
For one, Margin. Pawnbroker margins are unheard of in the
retail world. If retailers could get
their hands on used product efficiently they
The online space is the perfect marketplace. This has been the effect of many product
categories on EBay and Amazon over the last 17 years. As volume and scale increase, processes get better;
resulting in squeezed margins driving out those re-sellers that have not
figured out how to compete.
Mom and Pops will face sharp competition.
Why has it taken so long for EBay to get into the game?
There are businesses that have been replaced with pure online
platforms. For example: Netflix. The
Pawn Business is one business that has not proven it works online. Asking customers to loan and sell their items
by sending them to a stranger isn’t easy.
That is where FedEx comes to rescue with Drop Off.
Without the brick & mortar infrastructure and network of
locations the Drop Off idea is dead. But
what makes the EBay/FedEx partnership inevitably successful and powerful this
time around is the shipping logistics.
It’s a disruptive business model to the
Pawn Industry.
The Pawn Industry is
heading into trouble and more is coming.
We have reported that over the last 36 months Silicon Valley
has invested $800m dollars into system platform investments opportunities
focused on the re-sale of merchandise.
Why is there so much interest from Silicon Valley?
You have heard this before.
It’s the data. But it’s also the
customer. The combination of a customer
that buys and sells stuff using the internet whether online or in store is a
big fat profitable customer.
We have been shouting out that the cost to acquire customers
is the most important element in today’s business environment. Pawnbrokers have been stubborn to look at
this component, but are finding out that they have the most desirable customers
out there. The outsiders, our new
competitors, have discovered the business drivers. The Pawn Industry enjoys big
fat margins and their customers keep coming back.
Why will the consumers like this product?
Easy & Fast!
What has been learned about today’s consumer is that they
want it to be easy and fast. eBay and
FedEx have figured out the easy part.
The FedEx employee told me it took less than 1 hour of training to
understand what she needed to know. My
experience was you can get in and out in less than 5 minutes. Drop it off and ride into the sunset with
your receipt. Then wait for your money to hit your account.
The wait part is an important part of the consumer
acceptance and adoption. There is
speculation that they will be advancing payment depending on your feedback
rating. This is disruptive business
model and further attacks the Pawn Industry.
We believe that getting cash into your customers’ pocket is
70% of the equation. This will be the only
competitive advantage Pawnbrokers will have going forward.
What about law enforcement reviewing merchandise like pawnbrokers?
Technically the consumer is selling the merchandise from
their account and eBay is performing a service for their 30%. It may not be fair, legally there is no duty
to report to law enforcement.
What can Pawn Brokers do?
The thousands of subscribers that read my blog, you know
where I go with this. I have been shouting this out since 1998.
You
have to do something!
We have been pawnbrokers, eBay sellers, and online sellers
ourselves.
We have been developing solutions into the Internet since
1999.
We have lots of proven suggestions and solutions to get you started
.
.
At the NPA show next week, we will be showing our new...
“Bravo 2 Ecommerce” feature FREE with No success fees!
- Craigslist
- Gun Broker
- Amazon
- eBay
Its a great time to get started.
Come talk to us at the NPA show. We would love to discuss how
Bravo can improve your business and remain successful for years to come. Booth
226. See you there!
