EBay economy makes bidmachine a mover of 'Castaway' movie props.

For Twentieth Century Fox, auctioning off leftover movie props on eBay is practically free money. The list of items includes costumes from "Planet of the Apes," the giant windmill from "Moulin Rouge" and even one of three Wilson volleyballs from the movie "Castaway," which went for a cool $18,000.

"The whole point is to try to recoup the money that went into the cost of the film," said Gianna Babando, archivist for Fox, who noted that items of clothing have gone for as much as $5,000. "If you spend (millions) on a film, you want to get whatever value you can from the Online: Bidmachine works with Universal. stuff that went into that picture."

Behind Fox's revenue stream is Bidmachine, a subsidiary of Torrance-based Intelligent Computer Concepts, which provides auction and inventory management for Fox, along with Universal Music Group and other entertainment clients. "It seems like chump change for these companies, but the marketing value is in the millions because there are so many users on eBay," said Daniel Logue, senior developer for Bidmachine.

It's another example of what some call the eBay economy. As the online auction market grew to more than $12 billion last year, it has created a sub-industry of companies that offer support services for customers of all kinds, from individuals not wanting to bother with packaging and shipping to larger businesses looking to unload merchandise.

Among the big-name companies with a storefront presence on eBay: Sears Roebuck & Co., International Business Machines Corp., Best Buy Co. and Sharper Image Corp. "We've seen large traditional retailers use it as a complementary channel," said eBay spokesman Hani Durzy. "It can certainly be a good complement if it fits well in the eBay universe."

Auction management companies like Bidmachine are a crucial part of the eBay industry. "They're focusing on helping larger sellers acclimate to the way things are sold on eBay," Durzy said.

For a manufacturer of DVD players, it's a way of quickly moving excess inventory or out-of-season products in order to create shelf space for the newest model.

Marketing benefits

For a company like Fox, it serves as much as a marketing tool as a revenue generator. "The publicity is great," Babando said. "Fox would try to release stuff on eBay fight around the time a movie was released or a DVD was released."

Bidmachine's commissions range from 1.85 percent to nearly 30 percent of the final value of the auctioned product. That formula has generated revenues totaling $600,000 in 2003 and will likely come in at more than $1 million in 2004, said Eddie Correa, business development manager.

Client Universal Music currently puts on the auction block a limited number of CDs, along with signed guitars, jackets and prizes like a night at the Playboy mansion. Bidmachine would like to add the music company's entire catalog.

"Entertainment companies are looking at eBay with a keen eye," Logue said. "Before they were fighting the Internet, but now it's like if you can't beat them, join them."

Intelligent Computer Concepts had been handling various distributing and technological needs for Fox in the mid-1990s and was approached by the movie studio about developing a system to auction items online.

In the process, the Torrance company created a ,software system to perform auction and inventory management and began performing similar .services on a smaller scale for other clients, taking a fixed percentage of the sale price for themselves. Later, the software was refined so that it was easier for smaller customers to use. Fulfillment services include 140,000 square feet of storage space, as well as pickup, packing and shipping.

ICC saw so much potential in the auction management field that it decided to create Bidmachine as a wholly owned subsidiary and put Correa and Logue in charge.

Consumer access

Correa comes from a sales and entrepreneurial background, living owned and recently sold off a sandwich-and-salad restaurant in Wilmington. He came to ICC as director of business development about a year ago. Logue, the programming and technology development brains, joined ICC right out of college three years ago and wrote Bidmachine's software application.

Besides Hollywood, the subsidiary focuses on individual customers who have created side businesses by buying or making products and then, turning a profit by selling the goods on eBay. Some are mere dabblers while others rake in thousands of dollars a month through the auctions.

"After six years of doing this, we thought, 'Hey, we know how to do this eBay stuff. We need to make a consumer product,'" said Correa.

He said one client started using Bidmachine's software and fulfillment services after his eBay business, taking in $100,000 a month in revenues, was taking over his life--and his three-bedroom house.

"People will find that they can't ramp up their numbers because it's very time-consuming," Correa said. "They can't keep track of when the auctions are ending or which orders are filled, so they don't pursue it on a bigger scale."

Still, Hollywood has its obvious allure and the Bidmachine employees are looking to get more big entertainment-oriented names on board. "Since we have a Web-based application and can ship anywhere, we can market around the world," he said. "But we're going to at least market domestically to begin with."

PROFILE

Bidmachine

Year Founded: 2003

Core Business: Auction management and fulfillment services

Revenues in 2002: $200,000 (as unit of Intelligent Computer Concepts)

Revenues in 2003: $600,000

Employees in 2002: 6

Employees in 2003: 50

Goal: Reach $1 million in revenue in 2004

Driving Force: Large companies' increased interest in selling products on eBay