Second Rotation is a new online exchange that purchases "pre-owned lifestyle goods" from consumers over the Internet and then sells the items on eBay. The company is initially focused on consumer electronics, including digital cameras, camcorders, cell phones, GPS systems and MP3 players.

Consumers search the Second Rotation site to determine if their product is available for trade-in, then they answer a few questions about the features and condition of the item. Second Rotation then lets the visitor know how much it is willing to pay them for the item. It pays for shipping provided through DHL, and once it receives the item, Second Rotation inspects the item and validates its condition. The service is geared to consumers who want to sell their item quickly, not to professional online sellers.

Second Rotation plans to take a multi-channel selling approach in the disposition process, but for now will focus on selling the goods on eBay. It has outsourced the actual handling of goods to a company called Barrett Distribution, which is Best Buy's fulfillment partner on the East Coast. Second Rotation takes and maintains title, and pays Barrett $5 per item for fulfilling eBay orders.

When asked how much margin the company expects to generate from acquiring goods on the Second Rotation site and reselling them on eBay, Second Rotation President and COO Israel Ganot said that the company plans to be at least as competitive as eBay drop-off stores that sell items on behalf of clients - in the range of 35 percent. (Ganot emphasized that the service is not consignment based - Second Rotation buys products outright from its customers.)

Right now, the service has 2500 product SKUs with trade-in values ranging from $20 - $1,000. Eventually it will expand the list to 5000 SKUs, and for items with zero trade-in value, it will offer consumers the opportunity to send the item in anyway with no shipping costs. In those cases, it will work with recyclers and companies who want to purchase the items for parts.

The company uses a patent-pending calculator that determines the trade-in values for lifestyle goods, all based on near real-time market pricing data. It gets data from Data Unison, an eBay "Market Data Reseller," to get data from eBay. It also works with a company called Etilize that offers a catalog of product information with photos and product descriptions.

Ganot said the company believes in recycling and said the green aspect of the company may help it spread the word about its service. In addition, Second Rotation will also offer its turnkey solution for leading retailers, and is readying announcements that will be released within the next 2 weeks. Through these relationships, Second Rotation will let consumers trade-in their items in person at stores in their local area. The concept is to have the service branded with the retailer's name with a "powered by Second Rotation" designation.

Ganot spent 6 years at eBay and was involved with mergers and acquisitions, including PayPal and Eachnet in China, and worked in London helping to build up the eBay UK marketplace.

Second Rotation has received $2 million in angel funding and is currently in talks with venture capitalists.

http://www.secondrotation.com