 eBay Pushes to Liquidate High Volumes of Retail Inventory
In March, eBay told analysts it was going after the secondary market, calling it $500 billion opportunity. I was curious about its definition of the secondary market and how eBay came up with that figure. I was also curious what other companies thought about eBay's numbers, and what the experts had to say, so I set out to find the answers, which are presented in Tuesday's newsletter.
While eBay counts the secondary market as excess inventory and used goods, including collectibles and thrift shop sales, its Analyst Day slides and presentations focused on excess inventory and returns. eBay's decision to provide a high-velocity channel for liquidated goods could have serious effects on shopper behavior and perceptions of the site, and its special deals with certain retailers and liquidators could make things more challenging for everyone else.
I obtained some data on eBay's Daily Deals in Germany and how it positions its "deals" portal page there. Clearly eBay is serious about becoming a discount retail destination.
Among the people I contacted in researching the article were: an expert in reverse logistics (returns); a seller of liquidated goods who had run a significant business on eBay; the man who launched and ran eBay's B2B Private Marketplaces business; and one of eBay's competitor who specializes in the secondary markets.
Sellers need to understand where eBay is headed in order to plan for their businesses. eBay's focus on assisting certain players to liquidate goods will have as important an effect on sellers as its decision to create the Diamond level PowerSeller designation and Large Merchant Services API (operation catalog).
It's debatable whether eBay's approach will pay off for its own benefit and/or the benefit of its long-time sellers. So let the debate begin.
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