BusinessTN

Russ Grove is banking on America’s cluttered attics, overstuffed garages and basements crammed with cast-offs.

The CEO of Etowah-based NuMarkets spent the past two years perfecting the software that is the backbone of his eBay consignment service. Now, with the help of an infusion of capital from the Southern Appalachian Fund, Grove and his partners are patenting the software, marketing the brand and opening a string of franchises across the South.

Already, the company has sold more than 60,000 items and shipped to every state and 49 countries. NuMarkets has stores in Etowah, Chattanooga, Knoxville, Cleveland, Tenn. and Raleigh-Durham, N.C. And stores in Sevierville, Maryville, Oak Ridge, and several in Northwest Georgia, are also in the works.

“We’re trying to get geographical domination,” Grove says. “This thing is definitely going national.”

But it’s got a lot of company. The number of eBay consignment services has exploded in the last year or two, says Grady Vanderhoofven, executive vice president of Southern Appalachian Management Company, and a member of NuMarkets’ board of directors.

“When we started looking at NuMarkets, we knew of about five companies,” Vanderhoofven says. “Now we’re aware of more than 40 companies by name, and I’ve heard in the last couple weeks there are 130—a fair number of them in the Southeast.”

Just in the Chattanooga area, two similar companies have opened since the NuMarkets franchise launched in the city, Grove says.

“The race is on,” he says.

Across the Georgia border from Chattanooga, the Ringgold Telephone Co. recently started a service called ListIT. The service sells items for its customers on eBay and takes a 25% commission, explains Julie Wells, who works in marketing for the phone company.

“It’s actually going really well—we’ve have had dozens of items brought in,” she says.

The company, which accepts and stores items at its Ringgold headquarters, has considered opening other ListIT locations, but doesn’t have any solid plans to do so, Wells says.

That, Grove says, is the difference.

“Anybody can run one or two stores,” he says. “We’ve built this thing to have a technological advantage—we’re the only one that has written the software.”

The franchise locations of NuMarkets take in items, photograph them, post them for auction and ship them to the buyer for a 30% commission. NuMarkets’ headquarters in Etowah is linked to all the stores and handles listing and tracking, confirming sales, producing orders and collections.

“We’ve taken the difficult side out of selling on eBay for the franchise owner,” Grove says. “We’re centrally doing all the difficult stuff, and that’s how we’re able to scale.”

In Cleveland, by the time Marti Powell’s NuMarkets franchise had been open for three days, the store’s intake area was packed, she says.

“Over three days, I would say we have probably had 200 items,” she says.

Powell, who opened her franchise in June, still is learning the details of the computer system and has had regular visits with trainers from NuMarkets. But the software, known as Simple, is living up to its name, Powell says.

“I’m not very tech-savvy, but it’s going well,” Powell says. “It’s not real complicated and is real easy to use.”

The Simple software is one of the reasons the Southern Appalachian Fund chose to back NuMarkets, Vanderhoofven says. He declines to say how much the fund invested—“We’re guarding that information very closely because this is such a competitive space,” he says— but the potential of NuMarkets is tied to technology.

“Many companies out there are doing something, but NuMarkets has intellectual property,” Vanderhoofven says.