A Bridge to eBay

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Auction is powerful, but there are those who haven't accepted the Way of eBay (Nasdaq: EBAY). According to The Wall Street Journal, UPS (NYSE: UPS) is teaming up with a company called AuctionDrop to enable those slackers who don't use the online auction bellwether to easily pitch their old stuff to its 95 million users.

Through the physical environment of 3,400 UPS Stores, those of us who are still too nervous, lazy, or technologically skittish to use eBay will be able to drop off goods like old computers, cameras, DVD players, and so forth. AuctionDrop will take care of the rest.

According to the Journal article, AuctionDrop isn't the only company that is currently aiming at this lucrative niche. For example, Circuit City (NYSE: CC) and Best Buy (NYSE: BBY) both accept used electronic merchandise for auction, though Best Buy has not officially admitted that it auctions the wares on eBay, even though that's the rumor.

Several trends sweeten the prospects. Given an improving market for PCs, many people might want to auction off their old clunkers to help finance the new. Snazzy, high-end plasma and digital televisions are tempting consumers, hinting that older models could end up in the halls of eBay.

Meanwhile, fears of the growing incidences of auction-related fraud could push some toward a middleman-like AuctionDrop; though its site doesn't make any extra assurances to guarantee against fraud, one might hope it has expertise in avoiding the latest scams.

Given the strong (and, to my way of thinking, slightly baffling) power of eBay, all the players mentioned seem destined to benefit in one way or another.

eBay will welcome the added exposure to the uninitiated, as well as the additional influx of goods for sale (and it certainly stands to reason that some of the AuctionDrop customers may one day knock out the middleman). UPS heightens its profile with consumers by getting in on the eBay allure and makes some money in the process by providing the shipping and packaging for AuctionDrop. Last but not least, AuctionDrop gets a cash cut of the sales.

One might wonder what UPS rival FedEx (NYSE: FDX), which recently acquired Kinko's, might have up its sleeve when it comes to similar traffic- and cash-generating initiatives hooking into a popular pastime that perfectly flows into package delivery. For now, though, UPS is building a bridge to eBay, and moves like this ensure that online auctions will likely become a much more entrenched part of our lives.

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Alyce Lomax does not own shares of any of the companies mentioned. She has never used eBay and has to admit that pre-IPO, her thought was, "That'll never work!" She always much preferred the concept of another Motley Fool Stock Advisor pick, Amazon.com (Nasdaq: AMZN).