eBay Business Means Business

By Patricia Fusco | Posted January 30, 2003

eBay, probably one of the world's best-known consumer e-commerce sites, this week introduced its new business-to-business site, aptly dubbed eBay Business. The business-oriented site brings together all of eBay's business and industry listings under one easy to browse Web destination.

Rather than hunting through more than 500,000 business items listed for sale each week on its consumer site, would-be business buyers can quickly browse through a collection of business-only marketplaces at eBay Business. The site consists of three core indexes that include:

  • Vertical Industries: Capital equipment and supplies related to metalworking, restaurant and foodservice, construction, agriculture, industrial supplies, and commercial printing.

  • Office Technology: Computers, laptops, networking and telecommunications equipment, wireless phones, software, printers, handheld devices, and even office furniture.

  • Wholesale Lots: A broad range of products consisting of computers, electronics, media, apparel, toys, sporting goods, and more.

With small business representing more than $1 billion in annual gross merchandise sales last year, eBay Business General Manager Jordan Glazier said the time was right to make it easier for businesses to connect with other businesses.

"Our Business and Industrial categories increased gross merchandise sales by 90 percent each year for the past two years," Glazier said. "eBay Business categories that have grown significantly last year include restaurant and food services, which increased by 88 percent to generate $21 million in gross merchandise sales, and metalworking equipment, which grew 53 percent to produce another $34 million."

Glazier said the evolution of eBay Business was not just driven by sales; experienced members discovered new ways to use eBay for business purposes.

"We've observed our item listings migrate from odd, one-of-a-kind collectibles to everyday practical items," Glazier said. "As we were able to solve more problems for buyers and sellers, experienced users expanded their knowledge of eBay and migrated from personal use to professional use."

Glazier said eBay resolves two major issues for businesses — it provides a way for businesses to expedite sale transactions and a way for sellers to improve sales.

"Sellers can list items for sale for any a number of days," Glazer explained. "But a business buyer wants to close the deal now, they've got a new work station to set up and they need a cubicle, desk, PC and phone now. They don't want to have to wait for auctions to expire in order to see if they made they winning bid or not. Our 'Buy It Now' option provides business buyers with immediate gratification."

Sellers, on the other hand, need to be able to peddle their wares locally. Glazier said 70 percent of commerce takes place in local markets. Consequently, eBay established a core group of Trading Assistants to empower sellers to sell in local markets. By setting up a select group of sellers who specialize in helping businesses deal in industrial items, sellers have become more successful selling high-ticket items in their own backyard.

"There are 16,000 Trading Assistants working for sellers throughout eBay," Glazier said. "We honed this down to just four categories for eBay Business and set up directories of Trading Assistants specializing in Metalworking, Restaurant, Test and Measurement, and Industrial Supplies industries."

These specialized business and industrial Trading Assistants are experienced eBay sellers who have indicated their willingness to sell items for others for a fee. Glazier said the system works because sellers must be trusted and maintain a good reputation in order to do business through eBay.

"Sellers have to wear their reputation on their sleeve," Glazier said. "While newspaper classifieds tell you about what's for sale, they don't tell you much about the seller. On eBay Business, buyers can clearly see if the seller is a reputable dealer."

eBay Business is more than an collection of business-related goods and services. The site offers versatile payment options for businesses to buy and sell items, such as escrow services, shipping arrangements, transaction insurance, and volume selling tools, as well as the standard format for payer services provided by PayPal. But Glazier maintains that the primary reason why business use eBay Business is to drive the cost of doing business down.

"Reducing costs is a priority for most small businesses, especially in the current economic climate," Glazier said. "Buying business products on eBay makes sense for cost-conscious small businesses. It's a simple and effective way to preserve capital and cut costs."

With eBay's expansive collection of merchandise, a business owner could set up an entire shop through eBay, like DDTI did, a machine shop based in Gainesville, Ga. DDTI equipped its entire facility by purchasing equipment on eBay.

Greg Smith, DDTI president, said the company used eBay to purchase computer systems, laboratory equipment, welders, drill presses, sensors, electrical enclosure, valves and fittings, and a 10-ton roof-mounted air conditioner.

"The bottom line is that without eBay, we could not have afforded to put together our shop," Smith said. "The total cost of what we spent on eBay was $100,000. That's approximately $750,000 off of the manufacturers' list prices."


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