Is Snappy Auctions a Great Franchise Opportunity?
April 20, 2007 by Sean Kelly
Filed under Business
While the largest, most celebrated eBay drop-off store franchise concept , iSold It, has closed 60 stores, suspended domestic franchise sales and warned it may be on the verge of collapse, its next-largest competitor remains upbeat and continues to promote its franchise program.
In a company press release, Snappy Auctions celebrates inclusion on the list that made iSold It famous:
Snappy Auctions has been listed in Entrepreneur Magazine’s Franchise 500 list for the first time… With over 63 units open, Snappy Auctions ranked 309th in the survey, in only its 2nd full year of operation. The Nashville, Tenn. based franchise enables customers to make money off of items that are sold on eBay…
Snappy Auctions CEO Debby Gordon claims that Snappy Auctions is not suffering the same fate as competitor iSold It. In fact, snappy Auctions is doing phenomenally:
“We are poised for a phenomenal 2007, after an incredible 2006,” Gordon continued, “and this accolade is just the beginning.” In 2006, Snappy Auctions launched Snappy Sales Solutions, S3, which has contributed to its recent success. “S3 is yet another step toward our goal of changing the way businesses get value from retired equipment and inventory.”
Snappy Auction also boasts having been named one of Franchise Business Review’s Franchise 50, which honors franchise systems based on outstanding franchisee satisfaction through owner surveys and comments.
According to a Ina Steiner’s column on AuctionBytes.com, “Despite the challenges, Snappy Auctions CEO Debbie Gordon believes in the concept and says it’s all about execution.”
Can Snappy Auctions really be succeeding while iSold It, with much the same business model, is fighting for survival? Have they successfully overcome the challenges that eBay drop-off store critics contend make the concept unworkable? What do you think?
YOU’RE INVITED TO LEAVE A COMMENT ON WHETHER YOU THINK SNAPPY AUCTIONS IS A GREAT FRANCHISE OPPORTUNITY.
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This is an interesting article, considering Snappy has had stores closing at the same rapid rate, and has even purchased some stores back. Their top store, is really 3 stores on one ebay id., so the nubers look great. And wind has it, from an reliable source, that Debbie will be soon be stepping down. It is also interesting that NONE of the top three franchisors is on the ebay live exhibitors list! Hmmmm…
These stores will not work-processing time and costs, back-end work, inane customer questions, and lowered e-bay prices which cause seller anger, all combine to make this concept unworkable. B2B will not help much either. Franchised or not, the failure rate is incredibly high. DO NOT GET INTO ONE OF THESE STORES FROM ANY ASPECT.
They closed down my snappy auctions store in Staten Island , NY. They actually told me in writing that I had no right to talk to other franchisees and was therefore terminating me for talking to other franchisees and insisting that they only talk to my lawyer. They did so without any notice and over a weekend to make it difficult for my lawyer to do anything.
None of their other stores are doing well.
Aside from the stores that closed down, many are trying to delay the inevitable while they are actively looking for buyers. Came across at least 4-5 including the CT store.
Will be glad to talk to anyone who is considerig purchasing a Snappy Franchise.
Interesting to note that their main store does not make any real money ddespite being open the longest. Why is Debbie so upbeat if the store that she personally owns is doing so poorly?
Also, why does Debbie have so many negatives under her personal ebay id?
Like nearly all of their stores, I never made it to the platinum level of powerseller (25,000 gross monthly ebay sales).
I am now at the titanium level (over 150,000 Gross monthly). Took less than 6 months once I went out on my own.
When I had the store about 40% of my sales were items I acquires on my own from thrift stores, business overstock etc. Snappy discouraged it.
Since you only get about 30%, their 4% is a huge drain on profits and you get very little for your money.
Good god Jacob – If you thought that doing $25k a month was going to make you any money, why the hell did you even bother opening? That’s the problem, opening a store where the average income per house is $45-50k.
People will only bring you junk, because that’s all they have!
People who own these stores need to get a clue, open them where there are people who need the service – not because it’s a cheap franchise to buy. These stores are closing because the idiots who buy them don’t have any idea how to run them. Doing $15k/month is only going to cause you to have a heart condition.
G. said: These stores are closing because the idiots who buy them don’t have any idea how to run them.
G.: Isn’t that why they bought franchises, paid franchise fees & royalties? Most of the franchise sales literature says “no experience necessary.” Not being a seasoned business owner, and trusting supposedly credible national media, doesn’t make someone an idiot… just a candidate for a painful and expensive lesson.
G. I think you will find that most franchisees are far from “idiots”. In fact, many have and still do own other successful businesses, or they would not have been able to afford buying into a franchise.
The major problem here is that THE CONCEPT DOES NOT WORK, and that the “proven turnkey system” was misrepresented. Also, ask yourself why these franchisors aren’t buying back these stores if the promise of wealth is so great. I suspect you will find that these franchisors are quite aware that they DO NOT work.
I understand that an average store using the top 5 franchises, during the 4 prime weeks of the year, still only grossed aproximately $24,000. The net on that, will NOT pay the rent. And remember that for every store that did better, one did worse. Actually, if you do the math, a $50,000 month will NOT pay the bills either. Check out the information at http://www.amitheonlyone.org, I am sure if you contact them they will run your numbers for you.
G. if you have a magic wand that works in your business, why not share some of the winning concepts with all of us.
A note on reselling these stores -the seller is now liable, and one more family is now brought into the realm of deceit, bankruptcy, and frustration. Can you sleep at night knowing you sold someone such a losing proposition. If you can, than perhaps you should go to work for the franchisor.
PS: Jacob-Kudos to you on your new success, and I hope to meet you at ebay live!
Whereas I agree that you buy a franchise to be supported – you also buy one because you have a slight clue as to how to run a business.
Reread my post G!
Chance,
I think G. was responding to FranBest.
Let us know how Vegas goes!
So, what do people think about Debby’s article on AuctionBytes?
http://www.auctionbytes.com/cab/abn/y07/m05/i04/s05
Hello,
When you are dealing with business in an area that does not make money, then you cannot expect to make money at your store. The best thing I can say is use your mind. Open up a franchise at a place where the money is. Opening up a store in an area with high crime rate, no jobs, ect. Then you cannot expect anything there. Targeting places that are upclass rural areas, in big shopping centers, places that are very well advertised; Snappy will make it! You people that lost your franchise, it was your own fault, maybe not, but these aren’t just an average mickeydee’s down the road, this is an upclass business and you have to know how to keep it upclass. No offense to middle and lower class people, I am there myself, but targeting the higher class helps!! And you really need to have business skills before trying to open one, duh!~
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.
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.
Also keep in mind that their general counsel can and will close stores for arbitrary and capricious reasons including speaking with other franchisees about your concerns (he claims you are supposed to discuss it with him) as well as not returning his phone calls.
99.9 % seems really good. looks like they do know what they are doing actually.
Debbie has lost a lot of respect in the Nashville area. Her articles paint a rosy picture while the reality is bleak for store owners. The spin coming out of Snappy HQ would make a Washington PR firm proud. They qoute sucess rates, but these are based on 2-3 stores while ther remainder are barely breaking even. Also, Snappy has had 2, possibly 3 stores close in their home town of Nashville. The spin is only surpassed by Debbie’s ego….just talk to some of her ex-employees and ex-store owners. I smell a major lawsuit in the works.
Related posts:
RE: Snappy Auctions
http://www.franchisepick.com/former-franchisee-claims-snappy-auction-franchises-losing-money/
RE: The Online Outpost:
http://www.franchisepick.com/is-the-online-outpost-an-incredible-franchise-opportunity/
Chris, I know for a fact that a Snappy Auctions franchise was opened in the 12th most affluent county in the USA and didn’t make it. Why not? Because the model is bogus. IF that market was such a hot market, why didn’t Snappy Auctions buy it back? Because they realize the model doesn’t work. They are willing to continue to sell the franchises and have also realized that their S3 model is bogus as well.
Debbie Gordon is selling snake oil. BEWARE!!!
The issues Ms. Gordon spoke of hold no merit. First because we have heard that she is stepping down. Second-she is not buying back these fabulous money makers(Cough-cough!) and Third the sales number on ALL of her stores do not reflect that any are breaking even- even the id that has 3 stores reporting as one id.
The part that really urks me is that she is FULLY aware that this concept is not working, and that her franchisees are struggling, and filing for bankruptcy, and yet she continues to promote and sell these franchises. In some circles that is known as a snake oil salesman, I was taught it was a blatant lie!
It is NOT the location, NOT the per capita income, NOT the business background of the franchisee that failed. It is the FRANCHISOR who misrepresented their “turnkey system”, and a bad untested CONCEPT, that failed!
Check in at http://www.amitheonlyone.org for more information.
From a VERY RELIABLE source: Debbie is NOT stepping down. Go Debbie!
Anon. Do you have Snappy Auctions Booth # @ Ebay Live? I would love to talk to the flagbearer of drop off stores in person.
True, Debbie is not leaving. Mainly because the
“new” CEO backed out. Debbie is still there, but a good portion of the previous staff is not.
Basically Snappy has the same problems as everyone else!
It is interestring how many, many, many franchisees have been gagged or threatened by the different franchisors. It is not surprising that people don’t hear the truth.
Good point Chance. Snappy Auctions is still actively seeking new franchisors, but the existing franchisees are trying to sell theirs.
According to trade publications, the guy (a well known tech investor/entrepaneur) who was supposed to take over and fund Snappy Auctions, backed out AFTER Debbie Gordon had announced he was coming in to take over. But, if you read her release after he left, everything is peachy.
My guess is, when the whole house of cards comes crashing down, the franchisees will be the ones paying for it.
Get real, you are SOOOOOO right. Unfortunetly, the franchisees are already paying for it thru bankruptcy, divorce, and hospital visits. And the franchisor just keeps on selling those franchises. Not one has a system that works, so WHY??? do people still buy into their bull? There is enough info out here on the net to show that THE CONCEPT DOES NOT WORK (even in wealthy areas)! I challege any store to show their financials for three months of consecutive profitablity (including paying back a loan or startup fees, and the owner that works for free). Better yet-just show me breakeven!
Maybe you’re right. It will not work. Maybe Debbie should just admit it and give all those people their money back……..NAAAAAAAH!
This ponzi scheme sounds exactly like The UPS Store franchise. 60% of The UPS Store Franchisee owners don’t make a dime! For more information, please visit http://www.thebrownboard.com or http://www.talkbrown.com
I disagree with you. Debbie does rock! It’s not her fault the concept doesn’t work. Those darned customers just won’t do what she says they will do.
Bad customers, bad bad!!
What’s more important: building the franchise or building successful stores?!?!?!
Debbie, I know a bunch of people who are just waiting on pins and needles for your call to buy back their stores…..a bunch!
Dudda dum dum dum…another one bites the dust….dudda dum dum dum…another one bites the dust…and another Snappy gone and another Snappy gone….another one bites the dust…..hey they’ll rip you off too…another one bites the dust…. or several more should I say
Snappy just closed in my town. I want to open up a store. Do I need to have a franchise or can I open a store without a franchise such as Snappy.
Oh boy…
Susan:
Contact the folks at http://www.amitheonlyone.org, and they will give you information on ebay drop off stores, franchised or independant. Take the time to read the info on their site and ask questions BEFORE you make the plunge.
PS you might want to read Franchise picks article http://franchisepick.com/isold-it-american-dream-or-franchise-nightmare/
Susan here is another great link with plenty of comments by store owners…
http://www.franchisepick.com/is-isoldit-a-great-franchise-opportunity/
Yes Sean, what is it that people don’t get?!
No comment.
Thanks for answering, Chance.
Susan, where are you located?
Woooo hoooooo….Susan…….where are you??????
Well, after a year in the Snappy family we have gone belly-up. – oh, well – $100k down the drain….unless of course, someone wants to buy me out?? any takers????
Oh, and a gem of wisdom from the Franchise Conference Call held every other week –
“Marketing is the key to success in this business…” – Debbie
2 weeks later the Marketing person they hired, is un-ceremoniously fired and never replaced – maybe marketing isn’t important anymore….
Unsnapped: Sorry to hear it.
Sounds like The UPS Store franchise. It’s never disclosed that your LARGEST competitor is actually UPS! beware, The UPS Store franchise is a complete scam!!! For more information, visit http://www.talkbrown.com
NO, UPS is not a factor – why do you think that??
It’s the commission, the lease, and the “good stuff” that you get in. People just walk out when you tell them they get only 57% max back (in their minds this means 50%), + $4000. per month lease + when they bring in granda ma’s dishes to sell for $30. – that’s what kills you.
If everything you got in would sell for $500. (maximizing profit) – this would be a FANTASTIC business. Unfortunately, it isn’t….
Another Debbie Gordon quote – ” Welcome our NEW CEO…”
Next week no mention of him – he RAN FAST AND FAR!!!!
Un_Snapped: I think BEENHAD meant the franchisors (Snappy Auctions & The UPS Store) were similar in how they treat their franchisees… not that UPS figured into your store economics.
Click the UPS category in the sidebar to read of their difficulties.
Hi Un-Snapped! The UPS stores were Mailboxes etc, and a major part of their problems are from growing too fast and over saturation (by franchisors who only cared about making money from the sale of the franchise, not in helping the stores survive). Interestlingly one of the fellows who helped bring about the problems with UPS, is the same idiot who brought about the demise of at least one ebay drop off chain – your competitor! All of the franchisors have avoided dealing with the truth about the concept not working, and show a lack of responsibility on their part in helping the closing franchisees. First they wouild have to admit there IS a problem, as their stores go belly up one by one, and that is unlikely. Marketing isn’t the answer either! Check out the site http://www.amitheonlyone.org , and make sure you are closing legally and CYA.
I suspect that had more drop-off store owners worked as an independent TAs, they would have quickly seen this model could not work at a retail level.
I’ve been an independent TA since 1999 and was very bearish on the idea of DO stores making it. What client in their right mind would hand over 30 to 50% of their items value to someone else just for selling it? IMO, a DO will attract clients with a pawn-shop mentality who only have junk to sell. People with desirable merchandise won’t accept such a steep commission. They’d sooner keep the item or give it way for a tax write-off (at the marginal rate, I might add) rather than pay upwards 50% for a DO to sell it.
When I sell for others in my TA business, I charge a flat hourly labor rate plus actual ebay/paypal fees regardless of the selling price. That way, the effective percent is quite low for higher dollar items. Clients don’t mind that as much. But then I work from my home where virtually all my fixed costs already existed.
[ED. NOTE: TA = eBay Trading Assistant]
Un-snapped, I think we’re members of a large group of Snappy victims show should consider a class action lawsuit.
Many stores do not listen to the store calls since the spin coming out of Debbie can give you vertigo.
Now that I have alot of time on my hands, I noticed that the much vaunted, corporate owned, high-volume (performed better than the rest of us, profitable – doubt it…) Manhatten (NY, NY) store (ebay id=snappyauctions5) just vanished overnite.
Until one of you out there opens up another metro ebay drop-off store to replace the deep void caused by Snappy Auctions closing in the dark, I just have one question – where will Hillary get her Jimmy Choo’s ?
Un-snapped….sorry to hear of your situation. I’m in the exact same boat. I have lost a heck of a lot more….maybe we can compare stories sometime!
Seriously, are there any stores that make money. Or was this one big scam?
I too have been a major victim of Snappy Auctions and have lost virtually everything I had. My attorneys know that Debbie and her team have committed serious crimes across the country and would love to file a class action suit against them if they only knew that there were enough assets to make it worthwhile. If anyone has any inside information about Debbie’s net worth, it sure would be nice to turn this nightmare into something positive for all the Snappy Victims.
“Me Too” I strongly suggest you and others contact Karen and Gene at http://www.amitheonlyone.org who are familiar with the legal issues surrounding these stores, and have a network of franchisees across the board to put you together with.
Powerseller #1- Good guess NONE of these stores are making a profit on any consistant basis, if at all!
Me Too: See related post at With a Flawed Concept, Franchise Failure Takes a Heavy Toll.
There’s a link to a video interview with Karen & Gene about what others are going through.
Thank you both for the advice. I have seen Karen and Gene’s video and I will definitely get in touch with them. In case you haven’t heard, as of Friday, June 22nd, Debbie has now closed another Nashville store (Bellevue) — one of the corporate owned stores that she stole from a franchisee last year using threats, intimidation and the same illegal acts they she and her posse have been allowed to get away with for more than 3 years. Basically, no matter how she misrepresents herself and her company as a profitable business model, as Anon. hinted at, she has never had any intention to support the franchisees or the success of their stores. The events that I have personally experienced and the ones that I am now finding out about prove that her only purpose has been to feed her huge ego by surrounding herself with “yes” people with the same lack of integrity and character that she exhibits in order to pillage innocent franchisees in order to line her own pockets. Having a forum such as this and people like Karen and Gene is extremely helpful in getting all of our stories out in the open. I certainly hope that other disenchanted and injured franchisees will come forward to explore the possibility of retribution for Debbie and perhaps some measure of justice for the egregious injustices committed against all the franchisees.