If you think Ebay is just a place to buy and sell sports memorabilia, Beanie Babies and antiques, think again.
The San Jose, Calif.-based online giant recently added 110 new subcategories to its MRO/Industrial Supply category at www.ebaybusiness.com, including categories for electrical distribution equipment, industrial automation and control, electrical tools and supplies, motors and lighting products.
Ebay has come a long way since its inception in 1995. Then, it focused on building an online market that could connect together individuals passionate about collectibles like Beanie Babies, toys or even Pez dispensers, the collectible of choice for the wife of Ebay founder Pierre Omidyar.
Today, Ebay has 69 million users and offers millions of items for sale across more than 18,000 categories. Ebay gets its revenues from listing and selling fees and from advertising on its Web site. In 2002, annual sales were $1.2 billion.
Ebay is positioning its Ebay Business expansion as an opportunity for buyers of MRO/industrial supplies to take cost and time out of purchasing supplies for their facilities.
“Reducing costs is a top priority for many businesses, especially in today's economic climate,” said Jordan Glazier, general manager of Ebay Business, in a press release announcing the category expansion. “Much of the growth in Ebay's business and industrial categories has been organic, increasing by 90 percent in gross merchandise sales in each of the last two years.”
Glazier believes Ebay will be “as relevant to business buyers as it is for consumers.”
The company is aware of the failures of the online business-to-business exchanges during the late-1990's Internet craze that tried to force new and unwanted business models on the electrical industry.
Ebay has gone a different route with its business model. The company did not target MRO supplies or other industrial products as new business opportunities, says Laurence Toney, senior manager, MRO/Industrial Supplies for Ebay Business. Instead, he said Ebay reacted to the demands of its user community for a platform for online sales of business equipment.
“We are really good at providing the platform and letting our community of users decide how they want to use it,” he says. “We began to notice a lot of different things that were starting to pop up not only in vertical industries like metalworking, construction and restaurants, but in horizontal businesses as well — like MRO items in electrical equipment. We just started grouping them together and categorizing them in our category structure. It made it easy for users to list items to sell. It also helped people who wanted to buy those items know where to go.”
While this business model works across most Ebay product categories, users in the MRO and industrial markets asked for some help in dealing with shipping larger, difficult-to-handle products. Ebay developed tools that show potential buyers the cost to ship items, hammered out a partnership with UPS, and inked another deal with a company that offers competitive shipping of large items that need to be crated and freighted.
A recent search under Ebay's “electrical equipment” category pulled up over 2,400 individual items. Products manufactured by Square D and Allen-Bradley were particularly common, as were industrial automation products such as programmable logic controllers, sensors and drives. Many of the items in the electrical product listings were for surplus electrical equipment. Some of the sellers were surplus dealers; electricians and other installers were also marketing their excess equipment.
Sellers can create online Ebay stores and have items listed under specific product headings for as little as $9.95 per month. For $499.95 per month, sellers can have an “anchor store,” with premium placement opportunities. The company estimates that last year business buyers shopping at www.ebaybusiness.com purchased over $1 billion in products in its MRO/Industrial Supply categories.
Sellers sometimes use Ebay as their only online sales effort because they don't have the expertise in-house to handle online payment, Web site development and upkeep and other necessities that come with being an independent online merchant. But Toney says other companies use Ebay as another online channel in addition to their own Web sites, or promote the items they area selling on Ebay on their own Web sites.
Toney says Ebay's senior management team sees the industrial and MRO markets as big opportunities and believes the company can play a significant role in providing these industries with other methods in getting products to customers.
“When you look at Ebay Business and Industrial overall, we are growing at 100 percent. It's a very significant focus at the executive level within Ebay. We see the opportunity that's been presented to us.”