eBay Launches Business Site

Extension of "World's Online Marketplace" catering to rising number of business users

San Jose, CA  January 31, 2003  With 61 million registered users, 12 million items listed in 18,000 categories and almost $15 billion in gross merchandise sales, eBay perhaps has earned the right to called itself "The World's Online Marketplace."

But while eBay has built a reputation as the world's biggest yard sale for bargain-hunting consumers, the site also has been building a steady following among companies large and small that now use eBay to purchase a variety of business equipment or to liquidate excess inventories of computers, machine-building tools and other equipment.

In fact, according to eBay, the site offers more than 500,000 listings of business items every week, and the company estimates, based on data from the fourth quarter of 2002, that business buyers represent more than $1 billion in annualized gross merchandise sales on eBay across such categories as capital equipment, office technology and wholesale lots.

Now eBay has officially gone B2B with the introduction of the eBay Business marketplace, a new site that brings together business-related listings on eBay into one destination with the goal of making it easier for businesses to find the equipment and supplies they need.

"We brought together all the business-related products and services that we have on the site into one area that's specifically focused on business buyers," said Jordan Glazier, eBay's general manager for business-to-business.

eBay started offering business categories about three years ago to accommodate sellers looking to offer such varied items as lathes and networking equipment or wholesale lots, as well as those buyers that had used eBay in their personal lives and then begun to bring the practice with them to their jobs.

The online marketplace launched eBay Business Exchange in 2000 as a separate subsection of its main site. But with business use of eBay continuing to increase  the company reported that sales volume in its business and industrial categories rose 90 percent in each of the past two years  the marketplace elected to establish eBay Business as a separate site.

The platform, features and functionality of the business site are identical to those of the regular eBay, and the items offered for sale on eBay Business are available simultaneously on the site's consumer marketplace. Moreover, the value proposition is essentially the same as on the consumer side: greater value and selection than might be available in the regular retail market.

But rather than the antiques, dolls and other consumer items available on the consumer side, the business marketplace offers vertical industry marketplaces for such categories as capital equipment and supplies related to metalworking, restaurant and foodservice, test and measurement, construction, agriculture, industrial supplies (maintenance, repair and operations, or MRO), commercial printing, medical and laboratory, among others. The office technology category covers such items as computers, laptops, networking and telecom equipment, wireless phones, software, printers, office furniture and office supplies.

The marketplace currently offers services similar to those offered on the regular site, including online payments, escrow, shipping services, transaction insurance and volume selling tools. However, Glazier says that eBay is developing additional services that will be more specifically business-focused, and that these services will be available on both sides  consumer and business  of eBay. "The approach that we've taken is to ensure that the site-wide functionality is evolving more and more toward the needs of the business buyers, rather than creating specific functionality for this [business-oriented] area," he said, citing such features as "Buy It Now" and fixed price sales as examples of services for buyers and sellers seeking instant gratification rather than having to go through the auction process.

Glazier said that, at present, business buyers are primarily coming from smaller companies, with about 90 percent of the business buyers working at companies with fewer than 100 employees. Nevertheless, for certain categories  such as networking equipment  midsize companies are also turning to the site, and Glazier cites one midrange firm that bought a large portion of its server farm on eBay.

Sellers, on the other hand, cover the range, from individual users looking to unload a spare computer to big names such as Motorola, Dell, IBM and Sun Microsystems looking to eliminate excess inventory or simply take advantage of one more sales channel.

Will eBay Business fly? Glazier admits that while the site has built enviable awareness on the consumer side (some of which likely will carry over to the business side), eBay will also need to get the word out to the business community about the new site. "Although we have $1 billion in sales and 500,000 listings, it's really an incubating part of our business," he said. "Relative to other parts of eBay, it's still relatively small, but it's fast growing."

Would you use eBay Business to purchase goods for your company? Share your stories, and your opinions, with iSource Business by e-mailing our senior features editor, Andrew K. Reese.
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