South-Western - Management  
For Teaneck, N.J., Shop Owners, eBay Opens Up a Universe of Profits
Topic Technology, Innovation and Change AND Entrepreneurism
Key Words eBay, technology, business strategy
InfoTrac Reference CJ112526806
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News Story

Ronnie Mintz and Pat Soloman are experts on antiques and collectables, with a store in Teaneck, NJ called Finishing Touches. They are also eBay entrepreneurs. The mother-daughter partners began using eBay to sell their products in 1998. They initially had no clue about how to sell things online, but enough people are willing to pay them to avoid the hassle and time of selling online that eBay sales now account for 75% of the store's revenues.

They still operate their store on Cedar Lane, but no longer need to rely solely on customers walking by the store. Now the store caters to walk-bys as well as serves as a place for auction sellers to drop off their merchandise.

Finishing Touches charges a fee of 40 percent of the selling price. For this amount, they will post an item on eBay, pay the eBay listing charges, monitor the bidding, respond to buyer emails, collect payment, and ship the item once it is sold. Customers who have used them to sell merchandise have been thrilled with the service, mainly because they don't want to be bothered doing it themselves.

Cyber-selling wasn't part of the original business plan. Originally the women sold their own merchandise as well as consignment items. They decided to buy a digital camera and started posting a few items from a home computer. Today, Finishing Touches has sold about 1,600 items on eBay; gross sales topped $65,000 in 2003.

This year, Finishing Touches plans to add new merchandise to its collectables. They've adopted a new motto: "Old or new, we'll sell it for you."

One potential problem they face is competition from national chains with lots of venture capital. For instance, AuctionDrop, a company with four California drop-off stores, has announced plan to expand.

Questions
1.

When developing a strategy around technological innovation, one of the first things a business should think about is market potential. How do you think this influenced Finishing Touches' decision to use eBay to sell their product?

2.

A second concern is the cost of the technological innovation. How do you think this influenced Finishing Touches' decision to use eBay to sell their product?

Source "For Teaneck, N.J., Shop Owners, eBay Opens Up a Universe of Profits," Knight Ridder/Tribune Business News Jan. 25, 2004.
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