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EcommerceBytes-NewsFlash, Number 1443 - January 02, 2007 - ISSN 1539-5065    1 of 3

Overstock.com Struggles with Auctions and Readies Launch of Classifieds

By Ina Steiner
January 02, 2007

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Overstock.com plans to launch a classifieds format on its Auction platform by March of this year. A series of recent changes to its policies and pricing structure could indicate the company is having a difficult time with the auction-platform business model. Meanwhile, the changes - one as recent as last Friday - are agitating third-party sellers.

Overstock.com managers began tinkering with the company's auction platform after the departure of its Assistant Vice President of Auctions J.T. Stephens in September. Stormy Simon, Senior Vice President of Branding and Customer Care for Overstock.com, and Meghan Tuohig, Auctions Marketing Manager, said in an interview in November, new eyeballs on the site means changes (http://auctionbytes.com/cab/abn/y06/m11/i28/s01).

Those changes - launched with little advance notice - made sellers so hopping mad, it led CEO Patrick Byrne to publicly chastise some of them on the discussion boards and to ban a few indefinitely.

Sellers again expressed frustration over the latest change announced on Friday: the elimination of all subscription plans, effective January 11, 2007. The plans had allowed sellers to pay a flat monthly fee for listings, with a choice of ten plans. The top plan allowed sellers to list up to 7,500 items at a time for a monthly fee of $79.95. The change is significant, and some sellers have said it will make the site unaffordable.

Overstock.com has already introduced a classifieds platform with the recent addition of a "Car" tab on its website, also available at http://cars.overstock.com. Byrne warned sellers that the site was still in beta testing, and indeed, the site does not look fully-baked (http://www.auctionbytes.com/cab/abn/y06/m12/i28/s02).

eBay has a classifieds "ad format" on its auction platform in restricted categories that allows sellers to pay $9.95 for a 30-day classified ad (http://auctionbytes.com/cab/abn/y06/m10/i13/s01). It does not break out number of listings that are posted in the ad format. Overstock.com gave no indication of what it will charge sellers for listing classifieds on its site once the format becomes available.

Overstock.com also said it would also reintroduce 1-day auctions in March. In responding on discussion boards to criticism of the timing of all the changes, Byrne said "auctions had been speeding down a cul-de-sac and we needed to do some quick fishtails to get it turned back in the right direction."

Overstock.com Auctions: Recent Changes

  • Elimination of all seller subscription plans.
  • Introduction of a requirement that Make it Mine ("Buy It Now") prices be two times the auction starting price.
  • Decision to hold off on the introduction of Stores.
  • Design change on the top navigation tabs that some sellers felt de-emphasized auction listings.
  • Removal of seller IDs from search-results pages.
  • Elimination of the Trusted Merchant program, a private-label BuySafe bonding program that gave sellers the ability to guarantee transactions up to $25,000 (sellers may still use the BuySafe bonding program).

Related Story
"Overstock.com Addresses Changes on Auction Platform," November 28, 2006


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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