January 3, 2005, 12:00 AM

Circuit City short-circuits its eBay plans

Among the 30 or so companies with fledgling eBay drop-off services, the one established retail chain, Circuit City, has backed out.

Among the more amazing phenomena in retail over the past year has been the new kind of excitement generated by eBay. With 100 million registered users and more than $30 billion in gross merchandise sales this year, enthusiasm over the one-of-a-kind online marketplace has spilled over into the brick-and-mortar world, where a new breed of eBay drop-off stores is trying to latch onto the riches of the world’s largest e-commerce site.

Dozens of startup companies have formed over the past year to build chains of eBay drop-off stores, which process eBay listings for sellers who would rather not deal with eBay directly. One fledgling drop-off service in an established retail chain, Circuit City Stores Inc., has called it quits a few months after it launched last spring.

“We learned a lot and had a lot of happy customers on the buyer’s side and the seller’s side, but we weren’t getting enough return on investment,” a spokesman says. Circuit City operated its eBay drop-off service in eight stores in Atlanta and Pittsburgh under the eBay Trading Circuit moniker-a brand it will keep for selling its own returned and opened merchandise on eBay.

At least some of the start-ups in the eBay drop-off business, meanwhile, continue to forge ahead. QuickDrop International last month announced a deal to open 26 franchise locations over the next three years, adding to the 600 franchise contracts it has in the works in the U.S. and 95 overseas. It has 26 stores open so far.

NuMarkets LLC last month said it plans to open four stores this year in Little Rock, Ark., bringing its total to more than 10 so far. NuMarkets expects to open 35 stores by the end of this year; it recently launched a service with the U.S. Postal Service that lets consumers call a toll-free number to have a product picked up and delivered to a NuMarkets store for listing on eBay. “Our momentum is building as we close out 2004,” says president and CEO Russ Grove. m

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