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EcommerceBytes-NewsFlash, Number 1422 - November 30, 2006 - ISSN 1539-5065    1 of 2

Overstock CEO Says Auction Platform Has Not Met Expectations

By Ina Steiner
EcommerceBytes.com
November 30, 2006




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Overstock.com CEO Patrick Byrne publicly reprimanded some Overstock Auction sellers on Wednesday for being abusive and disrespectful to employees on discussion boards. He went on to say that the auction site has not worked as he had hoped, stating it had cost $6 million to develop and has been viewed as a "money-losing distraction" by Wall Street, shareholders and others in the company who have wanted to close it.


Overstock CEO, Patrick Byrne

Byrne's comments appeared on his section of the Overstock.com Auctions discussion boards called "Take 5 with Patrick." He singled out three sellers by their User IDs and stated, "I have no idea why you think that you can talk about my colleagues that way and continue as our business partners." Sellers had been reacting on the boards to recent changes on Overstock's auction platform, including the decision to exempt some large sellers from a new unpopular policy rolled out on Sunday.

Byrne said the auction platform will reach about $40 million in GMV (gross merchandise volume) this year, and for the first time is breaking even and "even showed a small profit" last week. "But," he wrote, "in the two years since it opened, it has not met our expectations, as must be clear to us all."

Despite the fact that the Overstock Auction platform favors large Enterprise Merchants by exempting them from a new "Make It Mine" minimum-price policy (http://forums.auctions.overstock.com/viewtopic.php?t=15890), Byrne said in his post that the auction site should "first consider the interests of consumers, then small sellers, then big sellers, just as our federal government should first consider the interests of all citizens then, once those needs are met, try to meet the needs of special interests."

Overstock.com Auctions is on its third manager after Holly MacDonald-Korth and J.T. Stephens left the company this year, as well as Strategic Partner Liaison Eileen Stout. Overstock.com launched the auction platform in September 2004.

http://forums.auctions.overstock.com/viewtopic.php?t=15918

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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