Retailers have shown increasing interest in online auctions as way to liquidate surplus, with some experiencing considerable improvement in the recovery rate on their original cost of goods for selected items placed at auction on eBay. But those gains don’t materialize across all categories, and the online auction marketplace has its own rules, as retailers and online liquidators are learning.
One rule mirrors the offline world: in the online world as well, too much supply dries up demand. Reverse logistics provider Genco Distribution Systems liquidates for retailers and other clients, moving surplus, among other methods, at eBay b2c auctions. Matt Lhormer, director of asset recovery/e-commerce solutions, tells of liquidating 1,000 Braun cordless men’s shavers for a client. When Genco listed three of the shavers per day in eBay b2c auctions, they sold for $35 to $40, about half the original retail price. But at three per day, and with 1,000 units to sell, it would have taken Genco a year to sell them all.
“We started listing 10 a day and it depressed the price,” says Lhormer. “At 10 a day, they started going for about $24. So we sold the rest on a b2b site and took in about $29 a piece. In that case, the b2b site beat the b2c site, because we had flooded eBay.”
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