Zippi Networks – eBay Consignment – Late to the Party

Zippi- Networks Affiliate, MLM or Franchise, what's the difference?

eBay Live 2008 held many surprises... low attendance, minimal exhibitors and a subdued atmosphere...

Not what anyone who has attended any prior eBay Live would ever expect.

One of the biggest surprises (to those in the know), was the presence on the eBay Live 2008 solutions floor of yet another eBay based consignment franchise opportunity (Or Affiliate/MLM - Call it what you will). 

Past eBay Live events had been virtually packed with eBay drop stores and mobile consignment business opportunities / franchises.  Yet since the recent and severe decline of eBay drop stores like Quick Drop and Snappy, it was a little odd to see a new franchise trying to sell the same style of business opportunity.

For those who are not yet acquainted with the history of eBay consignment franchises, please read this post: eBay Franchise Drop Stores.

Zippi Networks is a publicly traded company, Zippi[TM] Networks, Inc. (Pink Sheets:ZPNW) and has a very clean flashy website. The content on the site is eerily similar to what other eBay based business opportunities have offered, without the actual overhead of a retail store. 

Clutter into Cash - Sound Familiar?

Not having the overhead of a retail store location can certainly have a positive effect on any businesses bottom line. I believe that any eBay drop store with retail space is in a difficult position from day one. Zippi has solved this problem by eliminating the entire retail store aspect. One would think Zippi's Zipsters would already have a leg up on a profitable bottom line.

To evaluate business opportunities, an indication of verifiable income must be established before the bottom line can be measured. Unfortunately, it seems Zippi has little verifiable income from eBay sales.

In the last 90 Days the eBay account for Zippi-Auctions has recorded the following sales figures.

  Total Listings Average End Price Sell-Through
105 $72.70 23.81%

Total Sales: $1,818.00

For a single seller, these numbers would be less than optimal, when the Zippi Auctions business plan is considered, the results become even more surprising.  Zippi offers a home based business plan to unsuspecting people with the promise of making cash from unwanted items. This plan is based upon consignment sellers picking up, photographing, and storing consignment items which are in turn listed under the Zippi Networks eBay ID. 

Zippi describes and lists the item on eBay for these "Zipsters" - if Zippi sells the item picked up and stored by the "Zipster" from a consignment client, a portion of the consignment commission is then deposited into the Zippi certified affiliates PayPal account. One is left to assume the certified affiliate then ships the item for Zippi to the buyer on eBay. Additionally, one might also wonder why the consignment customer would allow a "Zipster" to drive off with valuable merchandise? Because the "Zipster" has a magnetic sign on their car or truck? -

Nowhere on the Zippi Networks website are the official eBay terms "Trading Assistant' or REDOL mentioned.

The nationwide network of Zippi Affiliates is processing these eBay items through one eBay seller ID Zippi-Auctions (currently 9 items listed).  Imagine the difficulties which could develop if this one ID experiences a problem with eBay Trust and Safety - The entire network will be shut down for an indeterminate amount of time. 

Back to the numbers... In late 2007 Zippi Networks released the following information.

"Zippi(TM) Networks, Inc. Moves From R & D to Revenue Generation Virtually Overnight"

Zippi now marks a new phase in the company's growth and operations as these founders have already begun generating revenue since sales activities began less than three weeks ago. October 1, 2007 marked the official launch of Zippi from its development stage to its rapidly growing revenue stage, largely through the initial commitment and promising work of the company's Presidential Founders.

In this first two weeks, Zippi's achievements include:

-- Approaching 200 signed, Zipsters / Affiliates into the Zippi Network

-- Zippi offering spread to Zipsters / Affiliates across 31 states and two countries

-- Doubling revenues earned week over week from initial sales made in late September

Bold statements, yet Zippi's entire network of "Zipsters" have sold $1,818.00 worth of merchandise in the last 90 days.  The commissions sent to the 200 signed "Zipsters" from these sales amount to much less than the return on the $795.00 initial investment (plus $49.99 per month) Zippi charges the Zipsters for access to the entry level affiliate services would seem to warrant. 

These "Zipsters" must be impressed by the sales pitch and Multi-Level Marketing approach.  Can you imagine recruiting all your friends to go out with the $2000.00 certified pro bundle from Zippi (including a handheld smart phone from Motorola equipped to photograph and upload descriptions of eBay items to the Zippi Network).

All your friends and family can be part of your down-line or "team".  Using these state of the art devices to list items in the Network and then, what?  Bring them all back to your house?  Leave the merchandise at the sellers home? Store the merchandise in their own homes? - Imagine the fun when it comes time to ship a team members listed and sold item to an eBay seller...

Hmmm, where was that diamond ring? - did you list the Rolex last week?  Where are those pearl ear rings?

Franchise or MLM?

Franchise or MLM?

It really is no surprise Zippi-Auction's sales on eBay have not been stellar.  The concept may sound great to the inexperienced and the perpetual business opportunities buyers, but if one looks at the numbers and the concept, is there really any Zip here?

Caveat Emptor!

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0 Responses to Zippi Networks – eBay Consignment – Late to the Party

  1. Just A Thought July 23, 2008 at 10:50 pm #

    I looked into Zippi in 2007, when it was more PROmotion than IN motion – and I wasn’t impressed. Based on the payout schedule, I’d be working my butt off for peanuts, compared to running my own consignmetn business, which I had been doing for 4 years at that time. Today, little has changed and I’m still not impressed.

    No retail store? That’s fine – but even when working from home, be sure your city/neighborhood doesn’t mind having a ‘mini-warehouse’ on the block! That was the first question I was asked by my city licensing department when they were determining what business tax collection schedule to put me on. Once it was clear that I did NOT store my inventory at my home, they were happy. I pay rent on commercial storage space — and any consignment seller, home based or not, needs storage space. You may not have a retail store front, but you still gotta put that stuff somewhere!

    I saw nothing in Zippi’s business proposal that could improve on my own word-of-mouth growth in my local business community. By doing good work for one business, I was introduced to other businesses, owner-to-owner, and that has led to my growth. Today I’m a Gold PowerSeller, still part of the eBay Trading Assistant program, and continuing to grow.

    Zippi is an interesting concept, but IMHO, they take too big a bite out of my piece of the pie. Thanks, but no thanks!

  2. Henrietta July 24, 2008 at 1:53 am #

    200 affiliates, 3 auctions, putative GMV $1K, hmmm, revenue generation would appear not to be from auction income.

    Maybe there is a zip in the dress?

    Seriously, if your post stops one lamb from being fleeced it will be a good thing.

  3. Frank the Tank November 4, 2008 at 5:27 pm #

    Dear misinformed…

    “zippi-auctions” ebay account is a corporate eBay account. With Zippi Networks each seller uses their OWN SELLER ID, therefore to say this is what Zippi Networks’ network of eBay sellers is actually producing is INCORRECT.

    Sorry… just FYI.

    –Frank

  4. Scott Pooler November 4, 2008 at 5:37 pm #

    That very well may be, but Zippi still has no Zip and it is a very bad idea to buy into this franchise.

    If we were mis-informed you can look to Zippi themselves, most of our research came from Zippi’s printed or website content.

    Also, a quick peek at the Zippi website today reveals about 10 auctions listed on eBay from 4 sellers with a total value under $250.

    If they have more members posting more product, I think they should include it on the website where they are selling franchises. Might help the confidence level of prospective franchisees.

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