A year ago, when Gary and Shelley Wain turned extra space in their Pleasant Hills craft mall into an eBay drop-off store to help people sell merchandise on the online garage sale, Gary was worried that a nearby Circuit City was doing the same thing.

Tony Tye, Post-Gazette Shelley and Gary Wain own Crafters Showcase at Southland Shopping Center in Pleasant Hills. At the back of their store, they have a drop-off where customers can leave items to be sold on eBay. Click photo for larger image.

But the big box retailer, which had been using the West Mifflin electronics store to test the e-Bay drop-off concept for a possible national rollout, gave up on the idea. The Wains, however, are still at it, handling about 50 eBay auctions a week through their SellYourStuffAuctions.com site.

The online marketplace that has defied expectations for years is at it again. Despite the rapid growth of companies eager to create supersized national networks of retail stores to help Americans sell online, mom-and-pops are still in the game, using local connections to bring in merchandise and using eBay to reach the same international marketplace as everyone else.

"It's such a young industry, I don't think anyone has truly figured out how to make this work," said Andy Benson, who in May opened his own independent ezbay store in Murrysville after considering several online drop-off franchise models in the marketplace. "There's no McDonald's of eBay stores so to speak."

Indeed, since the beginning of the eBay phenomenon, the concept of inserting a middleman into the process has been perilous, said David Steiner, president of the online Web publication AuctionBytes.com. He recalled writing five years ago about a company trying out the idea. It went out of business pretty quickly.

Then, a couple of years later, California company AuctionDrop raised several million dollars in venture capital and the gold rush was on with dozens of new online middlemen stores opening up. It has developed a relationship with The UPS Stores, which accept items for shipping from 3,800 locations, where they go to the eBay retailer's California facilities to be examined and put on the market.

Among the larger franchise operators that have emerged are iSold It, which opened its 100th store last month, has another new one on Mt. Lebanon Boulevard and has yet another headed to Indiana County.

QuikDrop International has more than 50 locations, with a new franchise expected in the North Hills in the next few months.

For his part, the independent Benson claims to have made a small profit his first month out, in part because of customer traffic generated by the neighboring Shop 'N Save grocery store.

He also had some luck with merchandise. One man stopped by on the way to a church sale where he was going to donate some old tubes and amplifiers that had been sitting in the basement. Instead, he sold them for several hundred dollars on eBay.

Another customer had Benson run an auction for a Steelers seat license that brought in thousands of dollars. The store is running an average of 100 auctions a week and has handled the disposal of excess goods for some small bricks-and-mortar retailers.

Getting a steady supply of good products is one of the most difficult parts of the business, said AuctionBytes' Steiner, noting that if a drop-off store charges a 30 or 40 percent commission, it can be much more lucrative for higher-end products than for an item that only sells for $25.

In fact, since it takes just as much time to sell something for $5 as it does for $5,000, most store operators won't handle anything they think will sell below $25 or $50. They research similar items on eBay, take pictures to post online, write up descriptions and then take questions during the several days that the auction continues.

Americans have lots of other options as they clean out the attic and basement, where it's estimated the average U.S. household has $2,000 worth of unused goods waiting to be sold.

Old-fashioned tools such as consignment stores, garage sales, antique shops, the classified ads in the newspaper have long moved everything from chairs to baby cribs to used clothes. And on eBay, Steiner estimates there are thousands of registered trading assistants working from their living rooms and basements to help people put items online.

Gary Wain, the Pleasant Hills entrepreneur, expects competition will eventually trim what eBay operators can charge for their services as well as the prices that customers pay for eBay merchandise. "I think as more and more people do this sort of thing, I think the profit margin keeps going down and down."

The Wains saw the service as an add-on to their basic business and have been able to keep costs down. They already had the building, just added the labor to the owners' regular duties and recruited customers from those already visiting the craft mall.

Meanwhile, Circuit City invested in store signage, computer terminals and advertising for the Trading Circuit test it ran in Pittsburgh. That followed an earlier experiment in Atlanta.

In the end, the big retailer decided it was not getting a good enough return on its investment, said spokesman Jim Babb. The company has continued to use eBay to sell its own returned merchandise.

QuikDrop franchisee Brian Collins does believe that, in the end, bigger will be better in the eBay drop-off business.

He noted that the software package that his Nevada franchisor offers saves time and money by efficiently tracking an item all the way through the auction process, a benefit that customers like. And as the chain grows, he also expects to benefit from growing name recognition and from the company's ability to be accredited nationally to handle donations for large charitable organizations.

Collins and his partners have the franchise rights to some of the most populous parts of Pennsylvania. They have one store open in the eastern half of the state and expect a franchisee to be up and running off McKnight Road in Ross in the next few months.

Collins estimates future franchisees will need between $55,000 and $60,000 to get new QuikDrop stores open.

AuctionDrop argues that it can out-perform any franchise system by offering consistency.

The company sends goods to be auctioned to a corporate facility where they can be examined, with target prices set by an experienced staff. While not releasing financial numbers, AuctionDrop claims to be growing revenue at more than 100 percent annually.

Just how much merchandise is going through eBay drop-off stores is hard to gauge, said Steiner, who hears about new stores on a regular basis. At this point, the biggest concentration appears to be in Western states such as California.

That may have helped put the stores on the radar screen of legislators there who considered starting to require eBay drop-off locations to follow the same rules as pawn shops, with stipulations on holding merchandise for a set period and keeping a register for law enforcement purposes.

For the time being, that does not seem likely to happen -- though the issue may come up again. In other states, including Ohio, there has been talk of tightening regulation of the drop-off stores after complaints from some competitors that there are different rules for antique dealers and auctioneers although they handle some of the same items.

Drop-off store operators of all sizes tend to oppose such rules, saying they would trim the efficiencies that make the eBay model profitable. "To me, I think that would kill the business," said Wain.

Circuit City has already moved on to other ideas for turning its excess space into a moneymaker.

Not longer after closing its eBay drop-off stores, the company converted the Pittsburgh sites into places offering computer repair services, rather along the lines of the Geek Squad operation of rival electronics retailer Best Buy.

The resulting numbers seem to be more along the lines of what Circuit City was looking for. A version of the service has been added to more cities and is scheduled to continue rolling out to additional sites this summer.