They started on eBay in the spare room - now they fill a mill

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12:00 am, March 25, 2008
They started on eBay in the spare room - now they fill a mill

But entrepreneurs say low margins on the auction site are holding them back

When Jonny Wall moved his snooker and pool supplies firm Wall Leisure into the rather Spartan-looking unit at Spotland Bridge Mill in Rochdale, little did he realise that he was joining a community of like-minded businesses.

Wall, a former legal executive who quit his job four years ago, became the fifth entrepreneur within the mill who had turned a simple eBay account into a more substantial business.

He started by selling pool tables made by his stepfather whereas the others in the unit sell lingerie, car batteries and stationery

Wall said that he has received plenty of helpful advice and contacts from the other firms. For instance, Rick and Jacqui Lowe-Jackson of lingerie seller Just Bras, who moved into the unit in December 2006, have given him lots of tips on developing his own non-eBay site, Jonny8ball.com, and he has found a new supplier in another eBay trader, Terry Johnson of NW Retail Solutions, who has a unit in the floor above.

“I use a lot of packaging materials because it's a mail order business,” said Wall. “I don't pay postage on anything like that any more. When I want it, I just go upstairs and get it.”

Johnson credits the unit with being “cheap-ish”, but Chris Gabbott of car batteries retailer Alpha Batteries, who moved into the mill last September from his home in Bury, believed there was more to it than just price.

“There's a good atmosphere here and it seems to be a place where acorns turn into oak trees,” Gabbott said.

Well-managed

He credits the centre's management, Bizspace (part of the Buckinghamshire-based Highcross Group) with providing the right kind of environment. “The rents are quite reasonable and it seems to be well-run. The building is manned 24 hours and there's a night man on all night. That gives us a bit of peace of mind and it seems very well-managed,” he said.

He has just moved from the second floor into a 1,000 sq ft ground floor unit which has allowed him to offer a counter service alongside the online operation. Like Jacqui Lowe-Jackson, he found that as soon as he started putting his trading address on the eBay shop and his own website, customers started knocking on the unit.

“I sell a lot of specialist batteries for leisure equipment and I've also started selling truck batteries and people have come from as far away as Warrington or Halifax to save on the postage,” he said.

Lowe-Jackson, meanwhile, has also taken on a shop unit adjoining the mill which allows her to display in surroundings that are slightly more intimate.

“I'd say that 18 months ago 100 per cent of our sales were on eBay,” said Rick Lowe-Jackson. “We've tried to change the model and that's all been about improving margins,” he said. At its peak, his firm was paying up to £3,500 in eBay and Paypal transaction fees,

“There's a lot of businesses that can survive on eBay, but not in lingerie,” said Jacqui. “It's a powerful marketing tool but from a profits perspective it's not sustainable.”

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