|Fri Dec 10 2010 08:22:23|
Can Growing Marketplaces Take the Place of eBay Sales?
By: Ina Steiner
Small marketplaces are experiencing a better holiday shopping season than last year. Startup Atomic Mall, which launched 2 years ago, experienced sales growth of 194% compared to last November, and Etsy just reported that in November, for the first time in its history, 2 million items were sold in one month. Etsy's November gross merchandise sales was valued at $37.3 million, 75% higher than a year ago.
Positive growth rates for smaller online marketplaces is coming from a variety of marketing efforts, including advertising, email marketing, search engine marketing and social networking marketing. In their favor is the fact that shoppers are looking for unique items and unique venues on which to shop this year.
Founder Mike Shannon attributed Atomic Mall's growth to a combination of factors, including the addition of datafeeds to Bing.com and a new streamlined checkout option called "Buy it Fast."
He also said there was an increase in the percentage of buyers looking for alternative marketplaces. Mike receives emails from shoppers and sellers who say they are thankful to have a viable alternative to the big players like eBay and Amazon. "Some have even told me that they are essentially in permanent "boycott" mode, and will not use these venues either for selling or buying," he said.
Artfire's emphasis on artisan offerings differentiates it and position the marketplace to take advantage of the handmade and small-business movements. It is also integrating a Shop Local feature to capitalize on a growing consumer preference to buy local. Artfire's Tony Ford attributes its especially strong growth in November to its early marketing push. "In the Holiday season, the earlier you can get the shoppers to spend with you, the larger part of their budget you can get overall."
Many small, longtime eBay sellers are reporting dismal sales that they blame on eBay's search algorithm and an unstable selling environment - and data confirms flat traffic. Yesterday Wall Street analyst Mark Mahaney of Citi cited ComScore data that showed while overall U.S. traffic to online retail sites in November was up 13% Y/Y, traffic increased only 6% Y/Y on Amazon.com and a mere 2% Y/Y on eBay.com.
But as much as smaller venues are growing, many sellers don't believe alternative marketplaces can make up the difference for the sales they generated on eBay, though some are having success on Amazon and others with their own websites.
Sellers I talk to who are working hard to establish their own online presence - even those who rely on eBay for a major portion of their revenue - express a great relief upon expanding beyond one marketplace. Their biggest challenge remains the same as the online marketplaces themselves - getting the attention of buyers who are inundated with shopping alternatives.
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