Former Franchisee Claims Snappy Auctions Franchises Losing Money

Despite the rosy picture painted by Snappy Auctions, a former franchise owner contends Snappy Auctions franchise stores are unprofitable and may soon be going, going… gone.

After the leader of Ebay Auction Drop-Off Store franchise section iSold It suspended domestic franchise sales, acknowledged that is has serious problems making the concept work at the unit level, that 60 stores have closed and that the resulting franchisee litigation is threatening the survival of the company, eyes turned to the #2 concept in the segment: Snappy Auctions. Though operating much the same cancept as the troubled iSold It, Snappy Auctions continues to optimistically promote its franchise opportunity, and tout the great potential their eBay drop-off store franchise concept holds for those with $42,000 – $75,000 to invest.

According to the Snappy Auctions website, this is a great investment opportunity:

Snappy Auctions is a pioneer in an exciting new industry, and we are looking for franchisees who share our enthusiasm and commitment. As the leading franchisor of eBay consignment services, Snappy Auctions is poised for fast growth and dedicated to the highest standards of customer and franchisee satisfaction. We are thrilled about the proven market for our services, and look forward to sharing our success with you.

Snappy Auctions Founder and CEO Debbie Gordon contends that there’s nothing wrong with the eBay drop-off store franchise model. In a recent article on AuctionBytes (The Truth Behind Successful eBay Drop-off Stores) she contends that the key to success is creating awareness through grassroots marketing, maintaining an upscale clientele and a high average selling price (ASP).
A former Snappy Auction franchise owner and Franchise Pick reader Jacob Maslow disputes both the rosy portrayal of the Snappy Auctions franchise opportunity and Debbie Gordon’s contention that the model works.

In comments on a recent, related post, Maslow says:

Snappy Auctions maintains that stores with high Average Selling Prices are doing well.

Nothing is further from the truth. None of the stores are making any money. The ones that appear to be making money require a close exam. One store has two partners working full time for free. Despite the free labor, they are barely making it.

The store in Connecticut had a high ASP. That reflects the fact that the owner bought off the inventory of a jewelry store that was closing. He would have been better off not owning a franchise as he would have been able to make a profit on the jewelry instead of sinking it in to the store.

Now that the jewelry has been sold off, he is actively looking to sell his snappy auctions franchise.

Many other snappy auctions are on life support and are only remaining open because owners are trying to sell the store rather than close it outright. They are unlikely to find buyers and these stores will end up closing as well.

Debbie Gordon’s article is completely misleading. if you have any doubt and think she knows what she is doing check out the user id for the store she still owns and that started the franchise. The ebay user id for the company owned store is snappyauctions….

According to Maslow, he was unable to be successful following the model required by Snappy Auctions, but was successful, later, on his own:

I am doing quite well now that I no longer have anything to do with Snappy. I am now a titanium powerseller. To achieve titanium status, sales must be over 150,000 per month on ebay. My costs are a fraction of what it was and I am selling a lot more.

Snappy made it difficult for me to operate. They actively discouraged me from purchasing my own items. At the time of my store’s closing, 40% of the items that I was selling was my own.

I know a lot about ebay and have a good idea of what I am doing. Debbie Gordon and her team at snappy auctions does not have a clue.

I had an expensive store (4300 per month rent) at a high traffic, affluent location. My average selling price was high but that included cars. Snappy takes 4% of the gross on the sale of a car, that leaves you with very little and it makes it hard to be competitive.

Maslow is not alone in his criticism of the Snappy Auctions franchise, Debbie Gordon’s contentions and the viability of the eBay drop-off store franchise model. Gene & Karen, outspoken critics and publishers of amitheonlyone.org contend “Snappy owners call us with the same complaint – the concept doesn’t work.” They have published their response to Gordon’s article: Debbie Gordon still doesn’t get it (or won’t admit it).

Is Snappy Auctions the energetic pioneer of an exciting new industry, eager to help you reap its financial and personal rewards? Or is it a company, as Maslow maintains, promoting an image of a vital, growing chain while, behind the scenes, its franchise owners are losing money and desperately trying to recoup a portion of their lost investments?

These are the questions prospective franchisees need to research before investing their time, money and futures into a given franchise opportunity. Ask enough questions, follow the facts, and you’ll get to the truth.

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