June 26, 2005

eBay Pushes to Be Everything for Its Sellers

By Evan Schuman, Ziff Davis Internet

Trying to make eBay as attractive and comprehensive as possible for small businesses that represent a huge portion of eBay's revenue, the auction company is offering to help customers create their own Web sites to complement their eBay presence.

The move comes at a crucial time for eBay. The company this month is celebrating its 10th anniversary, amid growing customer complaints about everything from lack of attention and reduced sales volume to recent price hikes and potentially better deals from rivals.

Those online auction rivals include Overstock.com, Amazon, uBid and Yahoo, and some have viewed recent eBay price hikes as their opportunity to woo a disenchanted eBay installed base.

Recent moves—including eBay's purchase of Shopping.com—have now been met with a new program to help eBay sellers have their own Web sites as a complement to their eBay space.

Many of eBay's sellers are small companies that often do not have any Web presence other than eBay. The more those sellers are locked into an eBay environment, the less likely they will be to work with rivals.

The service is dubbed ProStores, and eBay describes it as helping sellers launch their own sites integrated with eBay "customized with its own branding, categories and unique Internet address," according to the eBay statement announcing the service.

"And for the thousands of eBay sellers who already use an eBay store, ProStores integrates with their existing store, allowing them to manage listings and inventory for both stores and accept PayPal for payments," the statement said.

The initial rollout of ProStores includes four levels, with the lowest pricing at $6.95 a month in addition to "fees ranging from 0.5 percent to 1.5 percent per successful transaction," the company said.

Those packages include e-commerce features such as shopping carts, secure checkout, shipping arrangements, integrated supply chain inventory management and various merchandising options.

eBay also introduced a private online marketplace—called the Reseller Marketplace—where its largest sellers could purchase "liquidated and refurbished inventory and excess inventory in lot sizes directly from manufacturers and distributors," the company said.

eBay is defining its largest sellers as those who sell "a consistent high volume of monthly sales and a high level of total feedback, with a 98 percent or better positive rating by other eBay users."

eBay's PayPal payment service also introduced some new features, aimed at making the payment service more cost-effective for smaller e-commerce sites.