Thursday, June 17, 2004

eBay's search for sellers

Is eBay having a hard time attracting enough new sellers to support its growth?
    Finding new sellers and keeping existing ones happy has gotten tougher lately. For one thing, new rivals are coming on strong, especially as eBay's own merchants have steadily been offering more and more new merchandise. For more than four years, (AMZN ) has been welcoming brand-name merchants to sell on its site. It has also teamed with used-book, music, and DVD sellers. And search engine Google can send customers directly to a merchant's Web site via cost-effective targeted ads.

    The rivals are taking a toll: The online print store, for one, once listed 8,000 posters a week on eBay -- but not anymore. Now, founder and Chief Strategy Officer Michael Marston says paying Google several million dollars a year for leads, in addition to selling on Amazon, results in better sales than on eBay.

    Even more worrisome, some top merchants among eBay's 430,000 mom-and-pop sellers -- which still account for more than 95% of that $24 billion in gross sales -- are hitting the wall. Scot Wingo, CEO of ChannelAdvisor, which sells e-commerce-management services to large eBay sellers, sees up to 20 of them implode every month as they fail to adapt to changing technology or new competition or simply can't keep up with growth. Laments Wingo: "You see these nice couples from Florida at eBay Live, and you know they're going to be out of business by next year."

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