February 28, 2002, 12:00 AM

Retailers at auction: The 2% solution that’s growing fast

In spite of the wide publicity they’ve received, retailer-sponsored auctions at eBay represented only 2% of the merchandise sold at eBay. But all indicators point up for the future of auctions as a sales outlet.

For all the attention that retailers’ efforts to unload excess merchandise at eBay got this past year, retailers still represented only 2% of the merchandise sold on eBay in the fourth quarter. But online auctions mirror trends in the rest of online retail, and certain categories of goods are moving through auctions at a speed and volume that suggest they’ll soon drive that percentage higher.

Laptops, digital cameras, DVD players, desktop PCs, hand-held devices, MP3 players, and networking equipment are among the hottest sellers at the retail clients of auction services provider Channel Advisor. It’s much the same for the clients of Auction Works, where high tech equipment such as computers and peripherals are the top-volume sellers at auction. “We continue to have clients who show record months, month after month, in those categories,” says chief marketing officer Paul Lundy.

A fast-rising new star at retailers’ online auctions is sports equipment, particularly golf equipment. Earlier on, sports equipment requiring custom specifications was slow to move on the web; manufacturers instead used sites to drive shoppers into stores to try out demos. But now, says Lundy, those demos and other used clubs, such as those taken in trade, have become hot among his company’s retail clients as they discover online auctions as a way to move those goods cost-effectively.

Some retailers’ increasing success with online auctions is fueling the popularity of auctions among retailers overall, Lundy says. “Retailers are testing to see how auctions go for them online,” he says. “As other retailers see what’s going on, they want to make sure that they are a participant, too.”

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