eBay’s wholesale business grows 465% in Q2 over year-ago period
Wholesale trading on eBay grew 465% in the second quarter year-to-year, thanks largely to a redesigned wholesale section that better organizes its nearly 200 wholesale product categories, eBay Inc. says. The wholesale category supports sales of apparel, DVDs, jewelry, computers, electronics, sporting goods, toys and others products. “Wholesale trading on eBay is a natural fit for our marketplace, where we have a large audience of small businesses and individual sellers looking to find new sources of supply,” said Karl Wiley, eBay’s senior category manager of wholesale.
EBay seller Max Wassermann, who retails DVDs and VHS tapes on eBay as well as through his own brick-and-mortar store, said he’s found eBay to be a reliable wholesale source. “One of the challenges of owning a small business is sourcing supply,” he said. “EBay provides us with steady access to quality DVDs and VHS products at prices we can’t find elsewhere.”
In addition, United Traders, which wholesales excess merchandise for department stores, said eBay has enabled it to reach a larger marketplace in less time compared to other avenues of liquidation. “In the past four months we’ve generated more in sales for our client than was achieved in all of 2002,” said United Traders president Randy Hadeed. “By selling wholesale lots on eBay, we’ve revolutionized their business.”
Competitors say, however, that eBay overlooks some of the key needs of wholesalers and blurs the lines between wholesale and retail. “They don’t know how to operate in this space,” contends Scott Sumner, president and CEO of Sumner Communications, which operates the 8-year-old WholesaleCentral.com and publishes wholesale industry trade magazines. WholesaleCentral.com channels sales for wholesalers of 50 categories of products, including apparel, electronics, toys and gifts.
Sumner notes that because wholesalers operate on small margins, many won’t be able to afford eBay’s fees. By contrast, he notes, WholesaleCentral charges only a flat fee of $199 every six months, regardless of the number of transactions.
EBay, however, contends that it is serving an unmet market need with a fee structure designed to support small buyers and sellers, who can reach nearly 75 million registered eBay users. Its selling fees, comprised of a listing fee and a final value fee, range from 1.5% to 5.25% of the final selling price, with the percentage decreasing as the final selling price rises. “A wholesaler can list an item for sale for as little as 30 cents,” a spokesman says. “That’s a bargain compared to other distribution or advertising vehicles.”
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