December 31, 2002, 12:00 AM

eBay Redraws Retailing’s Map

(Page 4 of 4)

And now, b2b

EBay also often takes the initiative in testing new selling methods. Studies show that women tend to prefer fixed-price sales, while men are more likely to opt for auctions, Borenstein says. So when eBay starting working with its men’s apparel sellers to promote sales of new-with-tags items, including overstock and returned apparel with original product tags attached, it encouraged sellers to try combining new-with-tag with fixed-price sales. Women account for 75% of men’s apparel sales. “We’re trying to make sure there’s the right combination of options on the site,” she says.

Ebay is nothing if not experimental and always open to new opportunities. And it is demonstrating that willingness again with a new business-to-business operation. An experiment in the works with Motorola Corp. promises to open up a whole new market for eBay in b2b sales, says Glazier, the general manager of eBay’s business and industrial segment. Motorola is placing bulk amounts of overstock goods like cellular phones up for auction, testing the waters of eBay as a base for b2b sales. Several other manufacturers are also running pilots for b2b sales, Glazier says. “The wholesale trade on eBay is about 20,000 to 25,000 listings available at any given time, but it’s growing quickly,” Glazier says.

As an example of how quickly eBay can build a new market, he points to a new category for metalworking products. Though fairly new on eBay, metalworking tools already number more than 10,000 listings, ranging as high as $200,000 for a single listing.

As in other areas where eBay has opened doors, he expects b2b to continue to spawn new market opportunities. In fact, his take on b2b could be the slogan for all of eBay: “EBay breaks down boundaries,” he says.

uBid concedes the c2c auction market to eBay

UBid Inc.’s has decided not to play second fiddle to eBay, says CEO Christian Feuer. Instead, is refocusing itself as a retailer that sells guaranteed, brand-name consumer electronics.

Feuer, a former marketing executive of who took over as head of uBid in the middle of 2002, says uBid realized that it will be virtually impossible for any web site to replicate eBay’s critical mass of consumer-to-consumer activity. “We intend to continue to be the 2nd-largest auction site on the Internet, but we realized there is a fundamental difference between us and eBay,” he says. “The initial plan of uBid was to find a way of competing with eBay. But we don’t believe that a combined business-to-consumer and consumer-to-consumer setting works well for us.” UBid ceased all c2c transactions in November.

In a survey of uBid’s customers last year, the company found that many were confused by its mixture of products and sales alternatives, Feuer says. “We realized we had to make some dramatic changes,” he says. “So we narrowed our focus from a product perspective, and broadened our product offers within the categories of computers and consumer electronics.”

UBid launched its online Electronics SuperStore in November around the time that eBay launched its own online electronics store. But while eBay’s store offers a mixture of fixed-price and auctions sales, in both c2c and b2c versions, uBid’s electronics store offers only fixed-price b2c sales. “We’re very happy and encouraged with the results so far,” Feuer says.

Shoppers on uBid still have the option of linking to auction sales outside of the SuperStore section. All products on uBid, whether they’re offered at fixed-price or in auctions, are sold directly by uBid, which also handles fulfillment. UBid buys both new and refurbished products directly from manufacturers and passes on the original product warranties to its customers.

Feuer says uBid expects to differentiate itself from other sites that sell consumer electronics by standing behind everything it sells while offering the options of auctions and fixed-price sales. It has also considered changing its name, to reflect its broadening of purchasing options, but decided to maintain its existing brand while as it refocuses its operations.

UBid will continue to offer apparel, jewelry and other products, though these categories are considered secondary markets that will not be merchandised as heavily as computers and consumer electronics, Feuer says. UBid is a majority-owned company of CMGI Inc., a venture capital firm that invests in Internet businesses.

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