Under the deal, which will go into effect in the second quarter, FairMarket clients can list items for auction on eBay's site. Previously, Woburn, Mass.-based FairMarket had set up a network of auction sites to compete with eBay.
It's a "major capitulation" by FairMarket and its partners, said Keenan Vision analyst Vern Keenan.
"It's a smart move on FairMarket's part to go where the action is," Keenan said. "They were beating their head against the wall in terms of finding buyers."
** end of quote **
Fair Market's clients include:
Dell, JC Penny, Value Vision and other large, national and international retailers.
eBay has gained tremendous popularity because of the individuals, the striving entrepreneurs and small business owners who bring variety and flavor to the site.
Now the big boys are moving in.
While this doesn't necessarily mean that FairMarket clients WILL use eBay, there's no doubt that they will jump at the chance to combine eBay's vast audience with FairMarket's business-friendly tools and services.
It has been discussed on this board ebfore that before eBay began to court large enterprises, it have plenty of changes to make to it's site, services and business practices.
I, for one, did not anticipate that they would just join forces with a company that already has the clientele and the services that large businesses need.
This has huge implications for many categories, both positive and negative.
Even if you don't sell new retail goods, this still has meaningful implications. Think about it, what if Goodwill becomes a FairMarket client? Not only would they gain market share, but the availability of saleable items in the stores could decrease.
I'm assuming that FairMarket will eliminate the need for their clients to deal with much of the eBay hassle we currently deal with: NPB, FVF refunds, etc.. and would compensate (in some form) for outages. So the large companies will get all the benefits of eBay without the drawbacks.
posted on February 20, 2001 06:52:28 PM
** more info from the fair market site **
MarketSelect on eBay
FairMarket has formed a strategic relationship with eBay that enables businesses using the FairMarket platform to sell on the world's largest online marketplace as easily as on their own sites.
By extending the FairMarket platform to reach eBay buyers, FairMarket offers businesses the potential to sell greater volume and generate more revenue. This capability will be available in early Q2 2001.
Sell on eBay without changing your business processes.
FairMarket's integration capabilities will automate volume selling on eBay. Retailers, distributors and manufacturers will be able to upload product listings from their existing online commerce infrastructure to their FairMarket-powered e-commerce site and the FairMarket Network, or directly to eBay - then receive orders directly into their fulfillment systems. This functionality will automate:
* Product Upload to eBay
* Order Management
* Fulfillment Data Processing
* Reporting
FairMarket will offer two solutions enabling businesses to sell on eBay:
1. MarketSelect
For businesses with little traffic to their web sites, or who do not wish to sell excess or clearance product their web site.
MarketSelect is a listing upload tool that will enable businesses to post listings directly onto eBay. Businesses will also have the option to link to their listings on eBay.
2. Your own branded commerce site with MarketSelect functionality For businesses that want to sell to customers on their own site — then reach a brand new customer base on eBay.
Incorporate a FairMarket-powered, branded clearance area into your e-commerce site. Then, by adding the MarketSelect functionality, businesses will also be able to place listings onto eBay.
Read the press release here.
Support services help you sell more.
FairMarket offers a full range of professional services geared specifically to businesses, including:
posted on February 20, 2001 06:55:00 PM
From eBay's perspective it is a *very* smart move. eBay can bring in the big boys without a huge drain on eBay's resources.
"While this doesn't necessarily mean that FairMarket clients WILL use eBay, there's no doubt that they will jump at the chance to combine eBay's vast audience with FairMarket's business-friendly tools and services."
As for the other stuff, I think it remains to be seen.
posted on February 20, 2001 07:18:54 PM
Bringing the "big boys" to eBay will have a net negative impact to the small and medium sellers.
First, since they are bringing no buyers, disposable income among buyers will be further parsed among more sellers.
Second, as Amazon has shown, rules will be developed that will favor the big guys. When Amazon allowed direct competition on its pages, Amazon set price limits and higher fee structures.
A question also remains how big retailers will preceive brick-a-brack and used items listed right beside theirs. They will claim their brand is bringing in buyers and do not want anyone elses "stuff" listed with theirs.
eBay doesn't have a choice but to bring in the big outfits, or eBay will have egg all over its face with the huge growth projections they put out. eBay's P/E was around 279 the last I looked, and without this projected growth, it should be no larger than 40 P/E. Without the growth, the stock price should be 1/7 th of what it currently is, and that is being quite liberal with a 40 P/E being considered acceptable.
However, as eBay does change to cater to large retailers, it should open a niche for the small and medium sellers to start a new venue.
In any event, you will find the small unique sellers less and less important to the venue, with rules and policies reflecting the a bias to the big outfits.
[ edited by reamond on Feb 20, 2001 07:19 PM ]
posted on February 20, 2001 08:10:23 PMThink about it, what if Goodwill becomes a FairMarket client? Not only would they gain market share, but the availability of saleable items in the stores could decrease.
Just wanted to remark on the above comment.
I have not been able to pull anyting out of Goodwill for over a year. There is nothing to be found but junk. I remember three years ago filling my cart full - but no more.
Either the good stuff is not being donated, bought-up by the staff, or its being auctioned at the Goodwill on-line auction site.
posted on February 20, 2001 09:12:43 PM
I agree with morgantown, the last think I bought in Goodwill was two years ago. I never considered Goodwill as a source for merchandise,even many years before ebay, in our area on the East Coast they have nothing but yukky junk! Besides they already have their own auction site, what do they need ebay for? I sell vintage textiles and unusual hard to find Victorian items, I am not too worried about being in competition with any big company. On the other hand if you sell mass produced new merchandise then you might have a problem
posted on February 20, 2001 09:56:01 PM
On the other side of the coin, what if the pairing of Fair Market and eBay is not a successful match?
First, many big corporations have poor fulfillment records, out of stock, shipping delays etc.
Then, they always overcharge for shipping.
And if their offerings are sold thru other retail stores, what will happen to their sales there - will they drop - will retailers drop them because of the online competition?
Who is writing the auction ads and how long will they take to load.
And most important, if I have a question, will anyone be there to answer it in a timely manner?
And if they are paying standard ebay fees, which was reported, then what will they do about deadbeats, scammers and the like?
Methinks they knoweth not what they're getting into.
And if Fair Markets was such a great thing, why hitch up with eBay?
posted on February 20, 2001 10:08:56 PM
One more reason to expand your horizons .. never know what's next with ebay these days!
I agree with those who think it does not bode well for the average seller.
Geez, I wonder if ebay's gonna handle all their email for them so they don't get spammed! HA!
I have a memory like a steel trap .. unfortunately it's rusted shut!
posted on February 20, 2001 10:14:05 PM
If the corporate retailers come to ebay, the next progression would then be for their distributors to follow and narrow the field a bit more.
posted on February 21, 2001 09:10:31 AM
***First, many big corporations have poor fulfillment records, out of stock, shipping delays etc. Then, they always overcharge for shipping. ****
So do many of the super power sellers. Even though people complain (via feedback), they still get tons of bids.
***And if their offerings are sold thru other retail stores, what will happen to their sales there - will they drop - will retailers drop them because of the online competition? ***
That's not really an issue because most of these companies already have large online presences. In the case of Dell, they are direct-to-consumer anyway.
***Who is writing the auction ads and how long will they take to load.***
That's just it, they don't have to "write " ads. FairMarket can integrate with their existing systems and pull the same date they use for their websites or catalogs (or whatever) and have it automatically create the ads and monitor the process, then come back in and integrate the post-auction process.
***Methinks they knoweth not what they're getting into.***
I don't really think that FairMarket would have gone for the deal if they had not already had a few clients on board.
They are not going to have the same eBay that we do. We always complain that eBay needs to change some of it's policies, deal with the deadbeats, scammers, etc.. I just never truly anticipated that eBay would NOT change these things but that another company could.
For instance, FairMarket works through eBay's API architecture. I don't know the specifics of how eBay's architecture works, but theoretically, it should be possible for them to create the ability to blacklist bidders or only open bidding to bidders with a certain number of feedback, or even restrict users with excessive negative feedback, thus greatly reducing the deadbeat problem
It should, theoretically, be possibe to automate relists and FVF credit refunds so that the client is not overloaded with manual requests.
FairMarket can add te functionality that eBay needs to serve the large enterprise, they have the clients and the know how. eBay probably would not do a good job if it had to do it on its own.
**And if Fair Markets was such a great thing, why hitch up with eBay? ***
Before these retailers may have avoided eBay because it is really not well suited for a large company that needs to operate with efficiency. But now, by combining the two, they can get the best of both worlds. Companies like Dell, JC Penny, CompUSA, already do well with their own auctions becuase they have the brand to attract bidders. Now open that up to eBay's established audience and you have enormous potential.
posted on February 21, 2001 09:58:26 AM
This deal will enable Fairmarkets merchants, manufacturers, and distributors to sell ther goods on E-bay. This should be of great concern to small and medium size businesses that sell on E-bay and especially those who sell new items. What if the sources of your products decided to team with Fair Market and E-bay? If I was a distributor, manufacturer etc, I sure would to reach 22 million people. As time passes I do think more and more retailers, distributors, manufacturers will team with Fairmarket to sell there excess inventory. I think it will be great for the customers of E-bay bigger selection of goods and probably at a better price. The national home shopping network that signed on already I am sure have a pretty good selection of goods at a good price. More choices for the customer to spend there money and maybe less for the small -medium size business on E-bay. How ever I do think it will atrract new visitors to E-bays site. According to PC data, 4 million visitors spent an average of 22.3 minutes on J.C. Pennys website{Client of Fairmarket} in January 2001.What does the future hold?I think A person needs to make sure you have good and trustworthy sources for your products.
posted on February 21, 2001 10:02:32 AM
It all sounds good until the stores in your neighborhood start to close and guess who get's to pay those higher than ever school and property taxes! The sucker sitting on their fluffy while it happen's. Say goodbye to stores in your hometown folk's. Can you remember what happened when Wal Mart's opened years ago? Stores dropped like flies. Welcome to the new millenium. You'll see towns close too. Where's Radh when I need him..
posted on February 21, 2001 10:11:09 AM
I don't like this a bit, either. Looks like more outage time to me. Don't care for having my stuff get further lost than what it is, nor having the pie crumbs get even smaller. Ebay is NOT what it was a couple years ago. On top of everything, this will really bring the tax people in to watch everything hard and heavy! Economy bad and getting worse, lot of us are going to have to find something else to do.
posted on February 21, 2001 10:45:37 AM
escandyo- Precisely. Ebay doesn't have to concern themselves with smaller sales. The self created corporate welfare they encourage will be enough to offset their losses. "Corporate Welfare" exists in America today and is the downfall of our economy. IRS will soon follow the big boys, rape the tax rewards, and when the bottom falls out on ebay, once the small sellers have left, both Ebay, and Corporations will have the IRS to blame... whoopeee.... The general, existing economy online though will have gone to a subculture auction site again, kind of like ebay used to be.
posted on February 21, 2001 11:18:09 AM
This seems like a logical and financially sound decision on eBay's part. However, I am dubious whether the idea will succeed. eBay bidders are looking for bargains. eBay is built on a platform that resembles an online flea market. I sincerely doubt whether eBay can successfully "transplant" bidders to a new retail format. Bidders don't want to spend hours searching through listings of items they can easily buy at Walmart, and without the big shipping fees.
For example, this week I listed several pairs of jeans that I have collected over the past year. All were brand-name (mostly Levis) in pristine condition. About half sold at the minimum bid price of $9.99. These were jeans that would have sold at a retail store for $30-$40. Most jeans in the same category were selling at around $4.99. So unless Levis (or any other major retailer) is thinking of selling their items at half of list price (or less), I just don't think they will succeed.
eBay is banking on sheer numbers of customers to convince retailers to come on board. But eBay customers don't want to pay even discount prices for retail items. The only downside I can see is that eBay categories will be full of even more junk which discourages customers. Good luck, eBay.
(BTW, this is precisely where a small online sellers co-op could capture the "collectibles" niche market: antiques, pottery, glass, and other "fun-to-shop" items. eBay has abandoned that market in favor of bulk, mass-produced items.)
posted on February 21, 2001 12:25:41 PM
***So unless Levis (or any other major retailer) is thinking of selling their items at half of list price (or less), I just don't think they will succeed. ***
As an example, I know a place where you can go and buy JC Penny returned and out of stock merchandise for pennies on the dollar. I'm sure many people know of these places. I'm sure many people who sell on eBay buy from these places.
Anyway, "these middlemen" sell their clothing (specifically) for $1 a piece, no matter the brand or the original price. I don't know what they are buying it for. So, if Penney's are selling to them at less than $1 an item, they could very well sell on eBay for $4.99-$9.99.
But they will most likely sell for more than than because the brand will improve bidder confidence.
It's obvious that big retailers are selling that (liquidation) merchandise for pennies on the dollar. If they can improve their margins by a few points by selling at a higher price, they may try it.
There are companies now using that same model. Taking closeout, returns, slightly damaged goods and selling them via auctions (and other methods) so that the retailers can get higher margins. Even though it's only a smal portion of their total liquidation business, the money goes straight to the bottom line.
With respect to the new, retail items, eBay is more of a closeout/ liquidation market. Many items are open box, discontinued, out of season, slight damage to the box, slightly used. Not many people are selling brand new, perfect condition, retail items because the final selling prices are so low.
So a retailer would not really come to sell their NEW stuff, but rather the merchandise they would liquidate or write off anyway.
posted on February 21, 2001 12:39:45 PMmiracle118 No logic to your theory unless the corporations intend on using different names as brand and customer loyalty will be the expense of this venture. What user names if any do you think they'll use? "Buy It For Less On Line". Also, I wonder if those Mall leases will be in court with this new idea?
[ edited by Empires on Feb 21, 2001 12:40 PM ]
posted on February 21, 2001 02:33:42 PM
I think that this will definitely impact small and medium sellers. Fortunately eBay has alot of faith in your ability to adjust to this new competition.
When asked how eBay's agreement with FairMarket may affect traditional sellers, eBay spokesperson Kevin Pursglove said that additional merchants and products will make eBay a more robust marketplace. FairMarket merchants must sign the same user agreement and will pay the same fees as all other eBay sellers. Mr. Pursglove felt that entrepreneurial sellers will always find a way to compete, citing quality of service as an example.
Mr. Pursglove did acknowledge, however, that eBay is changing to a certain extent. He said there is some maturing and some evolving that is bringing a different mix of buyers and sellers to the eBay site.
posted on February 21, 2001 02:43:57 PM
I would guess alot of the deeply discounted merchandise on Ebay is the seconds and irregulars. Those who are selling these items could be financially ruined if they have already purchased a large inventory.
Maybe its time to forget selling and just become a buyer. I gave terrific Christmas presents this year, from all the slash and burn sales as the dot coms died. Looks to me like Ebay is offering the littlest goats up for sacrifice.
**miracle118 No logic to your theory unless the corporations intend on using different names as brand and customer loyalty will be the expense of this venture.**
I think your flaw is in assuming that the user ID is the brand when it is not. I'm quite sure a company would use some variation of their corporate name or URL if it were an available user name, but that is not where the brand comes into play.
The brand is powerful when you come across an auction for (as an example) a dell computer and see that it is being sold by Dell. That's much more powerful than a dell computer being sold by pookie 9834, even if Pookie9834 has a shooting star.
For example, a while ago, I was looking at one of the FairMarket auction sites. Maybe Excite auctions or MSN auctions. I was looking throuh the computer, clothing and jewelry categories. Practically the only sellers getting bids were JC Penny, jewelry retailers, COMP USA and other large, known companies.
I didn't pay much attention to what their user IDs were, because their logos were all over the auctions.
posted on February 21, 2001 08:11:40 PM
***Mr. Pursglove did acknowledge, however, that E-bay is changing to a certain extent. He said there is some maturing and some evolving that is bringing a different mix of buyers and sellers to the E-bay site.***
As a potential seller on E-bay, how then is E-bay changing? What kind of buyers and sellers then does E-bay have now and will have 2 years from now? With the addition of Fair Market how then can a person change to be sucessful selling on E-bay?
posted on February 21, 2001 09:27:50 PM
DANGER, WILL ROBINSON - DANGER! Goodwill has one of the largest used book sales in the Eastern U.S. near here each year. They hold out the 'good stuff' from their stores, price it, then sell to dealers from as far away as Texas, who line up before dawn at the doors to get a crack at it. This could be a major hit below the waterline if they decided to get into the book auction business.
posted on February 22, 2001 01:13:50 AM
I checked out Fairmarket's sites and for discount stuff it's not that cheap. Comprable to an outlet prices plus shipping and you don't get to handle/ try on the items.
Will Fairmarket be running auctions or a shop like half.com?
Most big Boys that run auctions trip all over themselves.
