TMTM

Revealing the Online CE Buyer

CEA Winter Summit 2005

Karl WileyDirector, Consumer Electronics & Photo

eBay, Inc.

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Online CE buyers come in all shapes & sizes

Resellers? Installers? Enthusiasts?

kandb_audio (237 ) User1591 (388 )• Positive Feedback: 99%

• User since: February 2004

• Items purchased last 2 months: 161

• GMV purchased last 2 months: $8,600

• Specialty: Used / damaged car audio

• Positive Feedback: 99%

• User since: September 2001

• Items purchased last 2 months: 218

• GMV purchased last 2 months: $14,100

• Specialty: Used / damaged car audio

Punch Amp - Broken Eclipse Amp – Needs Repair

250 ft. Power Gnd Wire 10 packs Solder remover

Alpine CD Receiver - Damaged

Panasonic CD Changer – Used, untested

1991 Silverado Factory CD Player

Alpine Alarm System - Used

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Online CE buyers come in all shapes & sizes

Collector? Audiophile? Exchange Rate player?

bakko_it (69 )• Positive Feedback: 100%

• User since: April 2000

• Registered in: Italy

• Items purchased last 2 months: 12

• GMV purchased last 2 months: $27,000

• Specialty: Vintage Audio equipment

McIntosh 50th Anniversary Gold

Edition Tube Amp - $6,000

Pair RCA Radio Tubes – New in box

McIntosh PreAmp - used

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Online CE buyers come in all shapes & sizes

A dream customer?

spudsblue (50 )• Positive Feedback: 100%

• User since: September 2003

• Items purchased last 2 months: 16

• GMV purchased last 2 months: $4,600

• Specialty: Cross-category electronics

Sony VAIO Laptop

Industrial Editing VCRDozens of Classical,

Jazz and Blues cassettes & CDs

Bose Wave Radio Remote Nakamichi Dragon Cassette DeckPioneer Elite THX Receiver

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Internet commerce growth accelerating

Estimated Quarterly U.S. Retail E-commerce Sales:4th Quarter 1999 – 3rd Quarter 2004

(Billions of dollars)

Source: US Department of Co`mmerce

Q1 2004 up 22% year-over-year – 11 straight quarters of 20+% growth

Online sales estimated to represent 10-15% of total CE Retail Sales

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Monthly Top 20 Shopping Destinations

Source: Neilsen NetRatings

= Marketplaces / Shopping Engines YOU can participate in

= Other online electronics sellers

Brand Rank

Unique Audience

(000)Active

Reach (%)

Time per Person

(hh:mm:ss)

UniverseReach

(%)

Web Page View

(000)Sessions

Per PersonWeb PagesPer Person

eBay 1 48,599 32.86 1:46:41 23.89 11,059,016 8.08 228Amazon 2 32,732 22.13 0:19:08 16.09 1,231,602 2.74 38Yahoo! Shopping 3 17,481 11.82 0:05:13 8.59 159,484 1.79 9Expedia 4 15,530 10.50 0:11:33 7.64 296,585 1.92 19Shopping.com Network 5 14,807 10.01 0:03:55 7.28 118,780 1.70 8Dell 6 13,158 8.90 0:17:45 6.47 319,435 2.63 24Wal-Mart Stores 7 12,934 8.75 0:10:13 6.36 257,905 1.88 20Orbitz.com 8 12,173 8.23 0:10:09 5.98 211,915 1.88 17Target 9 10,816 7.31 0:09:09 5.32 200,037 1.73 18Overstock.com 10 10,196 6.89 0:11:32 5.01 203,853 1.80 20Travelocity 11 9,972 6.74 0:13:29 4.90 206,899 2.04 21BizRate Shopping 12 9,882 6.68 0:03:17 4.86 88,208 1.48 9BestBuy.com 13 9,391 6.35 0:10:13 4.62 181,380 1.87 19NexTag 14 8,543 5.78 0:02:27 4.20 52,444 1.45 6Ticketmaster 15 7,795 5.27 0:13:05 3.83 173,649 1.75 22Sears 16 7,569 5.12 0:12:58 3.72 164,525 1.73 22Southwest Airlines 17 6,820 4.61 0:17:29 3.35 142,490 2.14 21The Home Depot 18 6,434 4.35 0:07:12 3.16 86,048 1.47 13PriceGrabber.com 19 6,160 4.17 0:03:56 3.03 52,819 1.73 9JC Penney 20 5,982 4.05 0:14:00 2.94 233,769 1.73 39

70% of top 20 online shopping sites offer CE products

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Electronics & Computers are eBay’s largest categories

* Figures are Global

Annualized Gross Merchandise Volume ($B) as of 9/30/04

Motors (eBay’s automobile marketplace) $11.1

Consumer Electronics $3.5

Computers & Networking $3.0

Clothing & Accessories $2.9

Books, Movies, Music $2.4

Sports $1.8

Collectibles $2.2

Toys $1.8

Cameras and Photo

$1.7Jewelry & Watches

$1.3

Home & Garden $2.0

Business & Industrial $1.2

$7.7 billion global

electronics business

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Karl – we get it – there are a lot of online buyers. But . . .

. . . are they

Angels? Devils?

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eBay’s “Angels”

Compared to the US population, visitors to eBay’s Consumer Electronics category are:

– Affluent: 31% more likely to have household income >$100,000

– Well-educated: 21% more likely to hold a college or graduate degree

– Passionate about electronics, and early technology adopters*:– 98% more likely to own 3 or more home computers– 43% more likely to own a digital camera– 158% more likely to own an MP3 player– 65% more likely to own a digital television– 95% more likely to own a Home Theater System

– Active offline electronics shoppers:

– 111% more likely to have purchased at Circuit City within the last month– 81% more likely to have purchased at Best Buy within the last month– 172% more likely to have purchased at Sharper Image within the last

month

*Compared to Online population only

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eBay is the #1 Online Shopping Destination

Site

eBay

Amazon

Wal-Mart Stores

Yahoo! Shopping

Shopping.com

Target

Bizrate.com

Overstock.com

Sears

NexTag

Rank

1

2

3

4

5

6

7

8

9

10

Unique Audience (M)

51

37

21

18

17

16

13

13

9

8

Web Page Views (M)

1,142

160

56

18

15

3

1

0.3

0.2

0.04

Sessions Per Person

8.11

3.03

2.08

1.89

1.72

1.82

1.48

2.01

1.83

1.39

Note: eBay traffic excludes PayPal traffic; traffic also excludes traffic to corporate websites Source: Monthly traffic data from NetRatings; November 2004 data

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eBay can help you reach online buyers

1. Ensure appropriate flow of product to eBay

2. Select & promote sellers who will represent your brand appropriately

3. Create a ‘Factory Outlet’ store for any product not channeled through your authorized dealers

4. Drive consumer upgrade cycles by offering Trade-In programs

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1. Ensure flow of Product

eBay is effective across the full Product Lifecycle

end-of-life used/vintagenew/scarce in-season retail

Product launches and

Limited runs

Closeouts, and

Refurbished

Used, and

Collectible

Slow moving new - in-season, and returns

• Acquire new customers

• Turn over inventory faster

• Test demand for new products

• Move items that aren’t selling through other sales channels

• Get more for product returns

• Liquidate out-of-season stock

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1. Ensure flow of Product

Flow B-Stock through managed, authorized internet channels

• Key benefits:– Relieves supply chain tension– Buyers choose to participate – product goes to those who want it– Increased cost recovery – product sold for fair market value– Reduce costs currently associated with moving B-Stock (returns processing, multi-

channel liquidation)– Remove MAP earlier and let product flow into the private marketplace – avoid

expensive incentive programs on slow-moving A-Stock– Keep non-participating retailers focused on A-Stock sales

OEM Distributors

Authorized offline dealers

eBay Private

Marketplace Authorized online dealers

(eBay)

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1. Ensure flow of product

eBay Private Marketplace Platform

What it is

– Your own private label, off-eBay, business-to-business auction marketplace

How it works

– Marketplace created with your branding and overall look

– Can stand along or be integrated with your existing website

– Invite your preferred buyers to register or simply pre-register them and automatically issue usernames and passwords

– Use multiple selling formats and inventory management and reporting functionality to increase your sales

Benefits

– Sell in large wholesale lots

– Lower sales cost

– Increased recovery rate on liquidation merchandise

– Protect your brand and pricing by approving your buyer network

Talk to eBay today or email privatemarketplaces@ebay.com

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2. Select and promote sellers

eBay Authorized Dealer Programs

Key Benefits to Manufacturers:– Mandate qualifications for participants

– Minimum positive feedback rating

– Return policy, shipping policies, etc.

– Elevate authorized dealers within eBay seller community

– Provide trademarked “eBay Authorized” logo

– Provides transparency to dealer behaviors – easier to monitor than offline retail

– Can provide performance incentives to reward success, other desired behaviors

Key Benefits to Resellers:

– Preferred access to product

– Use of manufacturer logos, images drives efficiency

– Authorized seal drives buyer confidence

– Can offer full manufacturer warranties

– Authorized outlet for in-store overstocks and returns

Concept: Authorize selected resellers to sell your products on eBay

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2. Select and promote sellers

Olympus Showcase

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2. Select and promote sellers

HP Marketplace

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3. Create a Factory Outlet Direct eBay Sales

• You can also choose to open a direct sales channel for B-Stock and Excess on eBay

Harman Audio

Pioneer

Dell

Olympus

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Retail coupon / rebate offer

4. Trade-In

Trade-In programs can drive brand loyalty

• eBay provides a highly liquid market for used electronics

• Manufacturers can take advantage of this demand to drive upgrade cycles, brand loyalty, and customer acquisition

OEM Offer:Trade in old equipment of ANY brand

Existing OEM brand owners

Competitor brand owners

Used equipment

Accelerate upgrade / replacement decision

Strong incentive to stick with OEM brand

Strong incentive to switch to OEM brand

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4. Trade-In

Turnkey Model: trade-in back-end handled through partnerships

Manufacturer• Markets program (web site, retail partners)

• Administers coupon / rebate

Third-party partner• Powers calculator• Purchases product from OEM

• Sells product on eBay• Handles inbound & outbound logistics

eBay• Provides marketplace• Supplies data for value calculator(s)

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Questions? Talk to us here at the Summit!

Karl Wiley, Director, Consumer Electronics & Photo

Cathy Siciliano, Director, Cell Phones & Portable Electronics

Jamie Stark, Category Manager, Home Audio & Video