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Mon Sept 14 2009 23:15:14

Marketplaces Continue to Heat up Secondary Market

By: Ina Steiner

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Most marketplaces these days offer some form of "daily deals" as part of their strategy in going after the discount space. As I reported last week, companies may differ on what they see as the actual market opportunity, but it's becoming clear the "secondary market" space is heating up.

As eBay goes after the secondary market, and Alibaba tests its new AliExpress that offers consumers and businesses wholesale/factory pricing, Overstock.com is fighting back against the invaders of its turf by launching O.BIZ, it announced on Monday, a new site where consumers and business can buy bulk merchandise at deep discounts. 

Are marketplaces seeing a demand for refurbished and overstock goods because of the recession, or are they so hungry for growth that they are looking for new strategies to try on for size?




All this competition to offer low-cost goods will put downward pressure on retail pricing, at least in the ecommerce space, and it certainly puts margin pressure on sellers. One hopes they know what they are doing, because these marketplaces may not be able to put the genie back in the bottle.




Comments (24) | Permalink

Readers Comments

Marketplaces Continue to Heat up Secondary Market   Marketplaces Continue to Heat up Secondary Market

by: Nuttin New

Tue Sep 15 02:59:42 2009

Let's see if I got this straight? Ebay pushes Bargainland (a secondary market seller) off of it's site, and now they want to become Bargainland II??

Ebay isn't going to win at anything other than raising it's prices to use the site, that's the only thing they've gotten right in the last 2 years!!

Oh....I forgot they like to hide listings also. Want to buy my house? Ebay controls the fog, as soon as the fog lifts you can see my home. Maybe? That will cost you extra - 8% + .57 cents, add 4 pence for sunshine, then multiply by five. LOOK - you saved a whole .003 cents by using power pack!! Your so lucky, please write us tomorrow and we'll ignore you for a week!

We love you, but we don't want anything to do with work so we're cutting out all labor involved in our business.

Thankyou for using ebay!

Griff

Marketplaces Continue to Heat up Secondary Market   Marketplaces Continue to Heat up Secondary Market

by: I hate eBay too, but...

Tue Sep 15 07:42:30 2009

This is SO not the eBay I used to sell on.

Marketplaces Continue to Heat up Secondary Market   Marketplaces Continue to Heat up Secondary Market

by: needle point

Tue Sep 15 08:13:30 2009

Say what you want about Ebay. If you don't like them then go somewhere else and quit crying.

Ebay is pushing 24.00 a share and was upgraded this morning. The stockholders and investors don't listen to minor complaints.

Marketplaces Continue to Heat up Secondary Market   Marketplaces Continue to Heat up Secondary Market

This user has validated their user name. by: Ed Gadfly

Tue Sep 15 08:24:32 2009

eBay has an obligation to make money for it's shareholders.

Johnie Donny-Ho, Usher LIEbermann, Meg, Pierre and Griff are all huge shareholders (Griff & Meg especially) and eBay is obligated to put their interests first.

That's why the little seller diner parties are being organized. After dinner Big Tall Johnie and Griff each grab a diner's ankle, lift them into the air and shake the remaining change from the inverted seller's pocket.

This ''Lost Supper'' app is still in development. Once they figure out a good way to drop the diner on their head after change retrieval it will be mandatory for all Non Trusted Sellers.

Marketplaces Continue to Heat up Secondary Market   Marketplaces Continue to Heat up Secondary Market

by: Phil A. Telist

Tue Sep 15 10:57:06 2009

This is exactly the right strategy for eBay, Overstock, et al, as evidenced by the rise in stock price lately. Analysts are more bullish on eBay than they have been in years, and I suspect that Q3 and Q4 will bear this out.

For collectibles dealers - you'll be all right. You'll be able to eke out your usual living on eBay. But I wouldn't want to be a small or medium commodity seller on eBay in the coming years. You're going to have your lunch handed to you.

You think people are whining on these boards? You should read the PowerSeller boards and the PESA boards. Most of these sellers see the writing on the wall that they're going to be expendable. In reality, as a buyer, why WOULDN'T I want to buy from a large company rather than Uncle Fred selling out of his garage? For the kitsch experience? Nah, that's played out.

eBay knows there's no going back to their flea-market image. They've been uncomfortable with that label even before JD came aboard. There's no space for the bead seller, the shoe seller or the Jody Coyote junk jewelry seller. Someone can offer it cheaper than you can and still offer free shipping. You think 2009 was fun for small sellers? 2010 is going to be a bloodbath.

Phil

Marketplaces Continue to Heat up Secondary Market   Marketplaces Continue to Heat up Secondary Market

by: J

Tue Sep 15 11:47:57 2009

"Someone can offer it cheaper than you can and still offer free shipping."

What if they don't have "it"? What if I and a few other small sellers are the only ones who have "it"? Is eBay truly going to turn away our business?

It appears they don't care one iota about the pain and suffering they are creating by becoming a clearance house for cheap junk.

Marketplaces Continue to Heat up Secondary Market   Marketplaces Continue to Heat up Secondary Market

by: summer in the city

Tue Sep 15 11:54:23 2009

Phil, you sound stressed. Take it easy. Why not make a token effort to conceal your contempt for small sellers?

So Ebay's latest business model is to switch from stuff nobody could find anywhere else to stuff everybody can find everywhere else.

Great thinking.

Marketplaces Continue to Heat up Secondary Market   Marketplaces Continue to Heat up Secondary Market

by: Patricia

Tue Sep 15 12:03:59 2009

Yeah - the stock is UP....that is until the next quarterly report comes out next month!  This is turning into normal operating procedure for the bigwigs of wall street!  Tout ebay until the next quarterly report...then recede for a bit and come out and tout them again.  The stock at this point is artificially high with no proven basis to support the price!

Marketplaces Continue to Heat up Secondary Market   Marketplaces Continue to Heat up Secondary Market

by: Patricia

Tue Sep 15 12:11:30 2009

Phil - I have to reluctantly agree with most of what you said.  I, too, expect 2010 to be a bloodbath for the small seller and I feel sorry for those who are still sitting, waiting and hoping Ebay will turn around.  However, I see failure for Ebay, they have neither the management or the brainpower to pull off what they are trying to do! At this point in time, they should have had most of their big sellers in place AND they should have had a secured base of small sellers of collectibles and unique and rare items too.  They are losing the latter due to their own ridiculous policies - throwing the baby out with the bathwater and pinning every weedy little thing that goes wrong on these very sellers.  They have lost their monopoly in that important niche thru their own stupidity!  To that end, Etsy, Bonanzle, Overstock, eCrater, etc. thank them!!!

Marketplaces Continue to Heat up Secondary Market   Marketplaces Continue to Heat up Secondary Market

by: Just me

Tue Sep 15 12:47:52 2009

@Phil

I agree with you whole heartly. By getting the bigger sellers with the free shipping they will be getting rid of the small noise with the outrageous shipping.

As for Bonanzle, Esty, Ecrater if they don't start doing some advertising and bringing more buyers to the sites they will soon be Ebays lunch.

Marketplaces Continue to Heat up Secondary Market   Marketplaces Continue to Heat up Secondary Market

by: J

Tue Sep 15 13:48:47 2009

Seems eBay is sending in the troops on this one.

The hate and derision for any seller who disagrees with the current path eBay is taking is palpable.

Marketplaces Continue to Heat up Secondary Market   Marketplaces Continue to Heat up Secondary Market

by: Esteban

Tue Sep 15 14:49:57 2009

Phase 1: Collect Underpants
Phase 2: ?
Phase 3: Profit

Marketplaces Continue to Heat up Secondary Market   Marketplaces Continue to Heat up Secondary Market

by: Cliff D

Tue Sep 15 15:52:50 2009

Phil said: In reality, as a buyer, why WOULDN'T I want to buy from a large company rather than Uncle Fred selling out of his garage?

My question -- as a buyer, if I wanted to buy from a large company, why on earth would I want to have eBay in the middle of the transaction?  Most large companies have the resources to set up their own websites to sell product.  eBay brings nothing to the table to enhance the ''buy from a corporate seller'' experience.

Marketplaces Continue to Heat up Secondary Market   Marketplaces Continue to Heat up Secondary Market

This user has validated their user name. by: Ming the Merciless

Tue Sep 15 16:37:31 2009

The very fact that ebay stock rose above 15 is the PERFECT example of the metastisizing cancer that has infected Wall Street for decades and which greatly contributed to the ongoing financial crisis the people of this country are facing.

The perceived 'value' is entirely artificial and unequivocally not based on performance. In point of fact, quite the opposite is true. The worse ebay performs the louder Wall Street cheers while the parrot press prints stories cut and pasted verbatim from ebay's highly, highly misleading press releases.

It's the same kind of bubble that housed the mortgage derivative and equity problems at the heart of last year's financial collapse on Wall Street, and it's still business as usual because the corporate leeches are still making big bucks pushing bad investments.

The suspiciously cozy relationship among corporations, analysts, and the business media screams out for investigation, prosecution, and radical reform.

This relationship, like ebafia itself, is rotten to the core and the odor is overpowering.

DEATH to ebay corp. in 2009.

Marketplaces Continue to Heat up Secondary Market   Marketplaces Continue to Heat up Secondary Market

by: Phil A. Telist

Tue Sep 15 16:38:28 2009

@summer in the city
No contempt for small sellers. I am a small seller. I just happen to be a realist. I'm lucky that I sell merchandise that is not a commodity, and relies on a certain amount of expertise and experience to sell successfully. If I were selling shoes or iPods, then I'd be SOL.

@Cliff D
Yes, large companies have the resources to set up their own sites, and most do, but eBay is cutting huge deals with companies to get them on the site. This is what the Daily Deals are about. But Ina has this pegged in her blog post - these Daily Deals are exerting downward pressure on prices, and most small sellers 1) can't  buy in the same volume as that of large companies and 2) can't lower their margins and rely on volume of sales like a large company. To use the tired analogy of Wal-Mart putting small mom and pop stores out of business...this is essentially what's happening on eBay.

And buyer behavior will change on eBay as a result. Suppose I'm shopping on eBay for something - a flat screen TV, or computer cable. Why should I buy from a seller's listing, when I might be able to get a tremendous deal by waiting for a Daily Deal to show up. Remember, there's virtually no way a small seller can compete consistently with the prices in those Daily Deals and still stay in business. And now, you're putting a bit of doubt into the customer who may be hesitant to purchase when a great Daily Deal might be right around the corner.

Most sellers on eBay are middlemen - very few produce their own merchandise. What eBay is doing is replacing the smaller middlemen with manufacturers and larger liquidators who can kick the snot out of your prices.

Marketplaces Continue to Heat up Secondary Market   Marketplaces Continue to Heat up Secondary Market

by: Cliff D

Tue Sep 15 17:47:40 2009

@Phil
I understand the steps eBay is taking to try to lure corporate sellers to the site.  I can understand how some corporate sellers would like the eBay exposure to take advantage of eBay's buyer base.

I'm still not understanding why, as a buyer, - I - would want eBay as a middleman in a transaction with a corporate seller.  From my perspective as a buyer, many of eBay's changes in the past couples of years are driving me away from the site.  Reduced transparency, forced Paypal, restricting communication between buyer and seller -- these are drawbacks, not benefits.  The off chance that a ''Daily Deal'' might yield something I'm interested in buying is pretty minimal.  Certainly not enough to keep me coming back to the site on a daily basis as has been my habit for the past 10 years.  The corporate sellers who are hoping to have exposure to me as a buyer are going to be disappointed, because eBay's changes are driving me elsewhere to shop.

Somehow eBay seems to have decided that the path to success is -- instead of providing the valuable service of a functional, dependable, well-designed platform to facilitate transactions between buyer and seller -- to try to (ham-handedly) manipulate its users' behavior.  I can see how sellers may feel trapped at eBay for lack of other viable venues.  Buyers are not similarly trapped. Particularly for corporate products, we have lots of choices of where to shop.  I personally don't see an advantage of having eBay in the middle of a transaction between me and a corporate seller.

I'm afraid eBay is becoming like that terrific flea market that you loved to go to every year because you were always assured of finding some treasure, but no longer bother to go to because the treasures are no more, all you can find is table after table of Amway products and factory-second tube socks.  Might as well just go to Wal-mart.

Marketplaces Continue to Heat up Secondary Market   Marketplaces Continue to Heat up Secondary Market

by: J

Tue Sep 15 20:45:06 2009

eBay is about the last place I would look for any electronics.

Amazon I would and do trust ... eBay ... never.

Only the most misinformed would shop eBay for new electronics. Used and vintage used to be pretty good on eBay but they have succeeded in killing that market.

Marketplaces Continue to Heat up Secondary Market   Marketplaces Continue to Heat up Secondary Market

by: Ebay's Slow Death

Tue Sep 15 21:45:38 2009


@J-

You are right.  I bought my recently purchased Canon Printer off Amazon. I did some internet shopping, and it is about price as well as trust. I trust Amazon, but not the Sellers on Ebay.

(By the way, I love my Canon MP610!  Hated my old HP.)

Marketplaces Continue to Heat up Secondary Market   Marketplaces Continue to Heat up Secondary Market

by: RH

Wed Sep 16 04:55:58 2009

I used to sell a lot Egyptian handcrafts and collectibles on eBay since 2002.
Alhough there is not direct big competition by big sellers or coperate sellers but still I have yearly steady decline in sales.
When ebay reduced their fees I thought I will be able to list more and sell more but nothing happened same decline.
1) Is it becuase buyers went to other web sites?
2) or becuase of  more sellers on eBay
3) or customers decreased their budgets.

I tried a seperate web site idea but I got nothing form it. So I still have to come back to eBay.

Marketplaces Continue to Heat up Secondary Market   Marketplaces Continue to Heat up Secondary Market

by: anonymous

Wed Sep 16 08:01:33 2009

When exactly did eBay reduce their fees?

I must not have gotten that memo?????

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