Groupon says its focus is on the bottom line, rather than top-line growth.
Some of the largest retailers are selling excess inventory over eBay.
Almost since its inception, eBay has been a Mecca for small entrepreneurs seeking a low-cost and efficient way to sell a few items-and harness the cachet of an auction to get a fair price. Now some of the biggest retailers are getting ready to sell their surplus goods over the same auction network.
Woburn, Mass.-based FairMarket Inc., which provides dynamic pricing auction capabilities for retailers and other e-commerce partners, such as JCPenny.com, Dell Computer, CompUSA and New Line Cinema, has signed a deal with eBay to distribute clients’ excess goods via eBay’s auction site. The arrangement with eBay will build upon FairMarket’s existing solution, which includes product upload integrated directly with a merchant’s inventory system, order capture and management, back-end fulfillment integration and the ability to schedule listings.
The first client to use the eBay option will be ValueVision International Inc., a national home shopping network, which is expected to go live early in the second quarter, says FairMarket President and CEO Eileen Rudden.
“We work directly with the merchant’s inventory system. With our software, we can integrate right into their systems and move merchandise to an auction section on their web site or onto eBay,” says Rudden. “Most customers want to auction off excess goods on their own web sites [to control their brand], which we help them operate. But at some point they’re happy to just get rid of it and distribute the goods through other sites. That is the value of having the link to eBay.” While the company did not reveal pricing, retailers who opt to use eBay will pay a fee to FairMarket.
FairMarket’s service is known for its dynamic pricing technology, in which the price of an item falls as the excess merchandise is sold. So instead of selling items to the highest bidder, the retailer actually sells at lower and lower prices until it’s gone. FairMarket, for example, provides the software for and operates the Red Alert page for JCPenney.com.
FairMarket also is working with other e-commerce partners for interactive promotions, in which consumers receive incentives to visit a company’s web site to bid on merchandise. FairMarket has run such programs with Miller Brewing Co., Playboy and New Line Cinema, which sometimes auctions off movie props and costumes as part of its multichannel film promotion, Rudden says.