Electronics retailer tests eBay consignment business in Atlanta

<p>Circuit City Stores Inc. is testing a new business that takes items on consignment from consumers and sells them on eBay.</p><p>The first of 10 initial Trading Circuit locations opened nine days ago in Atlanta. The shops, adjacent to Circuit City stores, will accept just about anything that can be sold on the Internet auction site _ not just consumer electronics.</p><p>"There is a real market out there," said Franz Gilbert, general manager of Richmond-based Circuit City's new retail formats, which includes Trading Circuit.</p><p>Plans call for five more Trading Circuit locations to open in the Atlanta area and four in an undisclosed market next month. The company will test those 10 sites for eight weeks before deciding whether to expand nationally.</p><p>Trading Circuit will take items that consumers want to sell on e-Bay and handle the entire transaction _ take the photos, write a description, handle the online posting, answer questions from potential bidders, ship the item to the buyer and send the payment to the seller.</p><p>The company will take a 35 percent cut from the first $500 of an item's selling price and 25 percent from the rest. Consumers also must pay the eBay posting fee and a payment-service fee.</p><p>A shopper whose item sold through Trading Circuit for $500 would get $298.58. (The eBay and PayPal payment-service fees would be $26.42, and Trading Circuit's cut would be $175.)</p><p>"Many consumers don't have the time or energy or wherewithal or basic computer skills to sell items on eBay," Gilbert said. "We're here to take the frustration and intimidation out of the process."</p><p>Helping consumers sell on e-Bay is a growing industry. About 130 consignment services now exist, said e-Bay Inc. spokeswoman Jennifer Caukin, but Circuit City is the first large retailer to enter the business.</p><p>"It is wonderful that a big entity like Circuit City is coming into the equation, because the public is not aware of this service and once they know about it, they will use it," said Russ Grove, president and CEO of NuMarkets, an Etowah, Tenn.-based company that pioneered the idea of eBay consignment centers.</p><p>Circuit City enters the eBay consignment industry with some mixed results in previously creating new businesses, analysts said. The company's CarMax automobile stores have blossomed, but other Circuit City ventures have failed.</p><p>Alan Rifkin, a retail analyst with Lehman Bros., said Trading Circuit sounds like a good option for consumers but cautioned that Circuit City "still needs to address the precipitous fall in traffic that their stores have seen for four years."</p><p>Best Buy, the nation's largest electronics retailer and Circuit City's biggest competitor, apparently is preparing to test a similar eBay consignment and shipping center concept, according to Caukin. Best Buy declined comment.</p><p>"The race is on as to who will become the McDonald's of this industry," Grove said.</p><p>The new business might bring in more shoppers to the adjacent Circuit City store, analysts said.</p><p>"This could be a great way to help customers who want to trade in their old merchandise so they could buy the latest and greatest electronic items at Circuit City," Caukin said.</p><p>___</p><p>On the Net:</p><p>HASH(0x2865710)</p><p>___</p><p>Information from: Richmond Times-Dispatch</p>

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