Model Expo began forty years ago in a land far, far away: Italy. Founder Marc Mosko spent his early career as an upper-level executive in corporate toys. While living in Milan and Rome, he started a mail order business specializing in wood and metal ship models for adults. He advertised in American magazines, and the business grew to the point that he moved home with it three years later. Ten years after his first magazine sale, he bought Model Shipways. Since then, the company has turned a tidy profit manufacturing wood and metal kits, paints, and tools for adult modelers. These aren’t the plastic F-16s you bought for your nephew on the birthdays before he discovered girls. They’re high-quality, high-end, detailed recreations of classic vehicles.
In 2010, Marc chose to retire and leave the day-to-day operations of Model Shipways to his wife and 18 employees. Retirement seemed nice in theory, but like many entrepreneurs he quickly found himself bored. Then he discovered eBay.
He moved his life’s collection of 200 vintage model cars, starting each with a low opening bid and no reserve as per eBay’s recommendations. His first sale was a made-in-Italy BBurago model in 1/24th scale of die cast Datsun 240Z in excellent condition but without a box. There were no other such models on eBay, but he stuck it up with some photos to see what would happen. The bid went up to $212.
After a few months, he had a surprisingly large pile of money, nothing left to sell, and a new addiction. He wanted to do more. There wasn’t much action in Florida where he lived, so he started buying on European auctions and selling his finds worldwide. Of that experience, he says “It worked out well enough to satisfy, but wasn’t making any profits.”
Marc’s eBay business got its first big break when a local accounting firm called him for help. A recently deceased client’s widow wanted to sell his train collection, but neither she nor anybody at the firm knew how. He agreed to sell the items on individual 7-day auctions at a 50/50 split. The deal grossed over $20,000. Marc’s share came to $9,000 after eBay and PayPal fees.
If Marc thought he was addicted before, that was nothing compared to how hooked he was after that success. He started an eBay store called Model Collectibles. He partners with collectors, or buys their collections outright, then sells the lots individually for the profit that produces. As of this year, Model Collectibles has three part-time employees and averages $10,000 gross income monthly.
Last year, he convinced his wife’s ad employees over at Model Shipways that an eBay store would work for Model Expo. Today, that store alone has 2 full-time employees and averages $25,000 in monthly sales.
While growing his businesses, Marc encountered trouble getting financing from his local banks. Because banks get most of their profit from huge corporate “cash cows” they’re not interested in providing capital at a rate or in the form that a beginning business can use. When he started working with Kabbage, he found the kind of financing he needed.
“We like to have an inventory ready for sale, and cash to take advantage of unique opportunities. This requires cash beyond that generated for our manufacturing operations. With Kabbage, we are always in the market for collections valued as high as $10,000. I can be more selective about the quality of train and model kit collections I buy,” Marc says. In the model vehicle industry, the higher the value of an item, the bigger the margins. Being able to compete at the top levels keeps Marc’s eBay sales competitive and profitable.
What’s next for Model Expo? Marc and his team are about to add 1,000 new items to their eBay store, adding a selection of modelers’ tools and paints to their inventory. They’re able to make this expanding move thanks to funding via Kabbage.com.
When asked what he wished people asked him about more often, he said “How to start a small business.” In addition to his influence on Model Shipways and his work with Model Collectibles, Marc teaches part-time at the University of Phoenix. “I’m appalled at how many students don’t realize that you can start a business on the Internet without quitting your day job. With no money at all you can sell your junk, and that of your neighbors, and build capital and sales.”