eBay bids for the channel

eBay bids for the channel

eBay is looking to become the clearing house of choice for IT vendors, distributors and resellers.

The online auction site is in the process of positioning itself as a business-to-consumer e-commerce site, rather than purely a consumer-to-consumer auction site. As part of this strategy, eBay has set up a specific category for businesses wanting to sell computer and IT goods, and hired category manager Sally Newson to introduce the process to vendors, distributors and resellers.

Newson said eBay is particularly useful for shifting excess inventory, end-of-line products, product returns or cancelled orders, or products of undetermined value such as new lines or demonstration stock. At present, there are around 60,000 computer-related items available for auction on eBay Australia's site at any given time. Newson said components, peripherals, computer games and networking gear are popular choices on the auction site.

Within Australia, eBay has relationships with Acer for the sale of computers and peripherals, IBM Global Financing for the sale of ex-lease computers, and Sun Microsystems for the sale of educational services. Newson is now looking to the IT channel for more opportunities.

"Twelve months ago, we would talk

with the likes of Dell and IBM about using eBay to clear stock and they didn't

show much interest," she said. "But now the vendors are coming to us."

Newson said resellers need not fear if their vendor or distributor partners begin using eBay as generally it is only used for stock that would otherwise sit in the warehouse and lose value. She said Ingram Micro uses eBay extensively in the US. "We are challenging the idea of channel conflict," she said. "These online auctions allow distributors to sell end-of-life stock anonymously through a complementary channel."

The dotcom survivor has made available a version of its software product Merchant Kit, which allows large merchants with their own e-commerce sites the ability to offer auctions on their site simultaneously with the eBay site. At present, select customers are deploying the solution free as eBay tests out the model, but Newson said that in the future eBay will charge merchants for use of the technology.

Harris Technology is one reseller that has already integrated Merchant Kit into its Web site to sell off slow-moving stock. "Rather than put that stock in the bargain bin at a set price, eBay allows you to sell it quickly to a huge range of consumers and you can let the market decide on its price," Newson said.

"eBay is all about being a cost-effective and efficient distribution channel.

Computers and Games at

- There are over 60,000 computer-related items available to eBay Australia buyers at any given time. Around 20,000 are computer hardware items and 29,000 are computer games. On average, new items replace these items every seven days.

- On eBay Australia, a computer is sold every three minutes, with 10 hardware products sold every hour. A computer game is sold every eight minutes.

- Sales of computers and games at eBay Australia are growing by over 15 per cent every month. From July 2000 to July 2001, the Computer and Games category experienced growth of 565 per cent.

How an eBay auction works

A seller puts an item up for auction by submitting a photograph and a brief description and by setting a starting price, reserve price and time frame for the auction of the item. The seller also indicates whether the buyer or seller will be covering the cost of distributing the item from seller to buyer.

Merchant sellers can now also set a fixed-price incentive -- a price at which buyers can purchase immediately and bypass the auction process.

Buyers find items through a search engine or via category listings, and make a bid on the item. The buyer can see the sales history and location of the seller.

When the auction finishes, the seller and the winning buyer are both sent an e-mail by eBay with contact details for completing the transaction. eBay takes a small commission from the seller: 5.25 per cent for the first $50 of sale value, 2.5 per cent for $50-$1,000 worth of goods, and 1.25 per cent for $1,000 and over.

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