EcommerceBytes-NewsFlash, Number 1568 - June 25, 2007     2 of 4

Sellers Say Manufacturers Are Banning Sales on eBay

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Sellers are reporting that manufacturers and suppliers are barring them from selling on eBay over fears that sales on eBay damage their brand image. The issue came up during a "Town Hall" meeting held during the eBay Live conference in Boston last week. A seller with 28,000 positive feedback, who said he did not do black market or gray market sales, reported that in the last 6 months, suppliers have modified their policies making it impossible for him to sell those products on eBay. He said it has cost him $300,000/month in sales.

eBay's head of Trust & Safety Rob Chesnut said eBay is working with industry groups. eBay's head of auctions Phillip Justus said manufacturers understand their customers are coming to eBay, and the problem won't be solved overnight. President of eBay Marketplaces North America Bill Cobb said eBay has had some success directing manufacturers to experienced PowerSellers.

An informal poll of Town Hall attendees asking how many of them have had a manufacturer ban the eBay sales channel revealed the problem affected between 30 - 50 percent of them.

Jim, who sells on eBay under the User ID Jimwarden, was one of those who raised his hand. In a podcast interview with AuctionBytes after the Town Hall session, he explained that he sells GPS and car navigation systems.

Jim said the manufacturers of the brands he sells have had general polices against selling on the Internet, but lately "they have had all their distributors obtain signed statements from buyers like me that we understand these policies. It seems they are tightening down more and more. They seem to resent eBay more than most of the other market channels, and that is really unfortunate."

Jim thinks the reason for the crackdown is that they see the very low prices on eBay, and cited an example of a listing that sold on eBay recently for $40 less that his cost. Manufacturers fear that the low prices are setting unrealistic expectations for their customers who may believe there is a lot more profit in their products and ask why their distributors can't sell it for the same price as on eBay.

The full podcast can be heard on AuctionBytes at http://tinyurl.com/27ntwd

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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