Why Large Retailers Are Selling on EBay

CHANNELADVISOR WHITE PAPER

In its younger years, eBay made a strong impression on the world as an auction site for mom-and-pop sellers. Since then, it’s grown into bigger e-commerce shoes, extending its reach to more categories and businesses of all sizes. Despite these advancements, eBay is still often labeled as “the auction site” by consumers and businesses that haven’t noted the shift in the e-commerce leader’s model. Today, most eBay items are fixed-price listings.

Historically, large retailers have shied away from marketplaces like eBay. Many fear a loss of brand control and a lack of clarity about whether the benefits outweigh the perceived risks.

In this guide, we highlight the opportunity on eBay and address the common misconceptions and concerns large retailers have about selling on the marketplace. We’ll also show you why the site you may have been casting aside as a risky and impractical project for your business could actually be a manageable venture that leads to a deep well of profits and customer acquisition.

EBAY FEE STRUCTURE As an incentive to bring well-known brands to eBay, the company’s fee structure focuses heavily on a fixed-price format. Consequently, retailers have a low-risk opportunity to list their full catalog and pay a commission to eBay only when a sale is complete.

This structure is vital in attracting large retailers to sell on eBay, since previously the cost of listing products was too high and risky for retailers new to the channel. These fees are also in line with other online marketplaces such as Amazon, where many larger retailers are seeing success with the fixed-price model.

THE CHANNELADVISOR ADVANTAGE An important aspect to every successful e-commerce strategy is determining when, how often and how many items are posted to the marketplace. EBay’s fee structure further emphasizes why it’s important for retailers to get their full catalog posted — and then maintain it — on eBay in an efficient way.

To maximize the visibility of your products on eBay for buyers, you want to establish a strong conversion rate for listings so that your sales history will be high, which in turn will push your products higher in Best Match search results. As your quantity sells out, make sure it’s replaced on eBay and that your sales history carries over, so your search ranking stays high.

At the same time, you need to be on guard against duplicate listings, which are prohibited on eBay. ChannelAdvisor Marketplaces is designed to allow you to take advantage of your sales history on eBay and keep products posted automatically, without violating eBay policies, like those against duplicate listings. Also, with ChannelAdvisor’s eBay Out of Stock control, you can customize how long your product listings stay up without quantity.

The Ebay Opportunity• EBay has 145 million active users globally• More than 650 million items are listed on eBay• Fixed-price listings account for more than 76%

of global gross merchandise volume (GMV)• It consistently grows at a pace faster than the rate of all e-commerce• Most of eBay’s product categories have achieved double-digit, year-over-year growth rates

*All info from eBay public company data

Why Large Retailers Are Selling on EBay 2

Why Large Retailers Are Selling on EBay 3

INVENTORY CONTROL It’s especially important for high-volume, large-catalog retailers to be able to quickly and accurately list and maintain their vast quantities of items on eBay. Plus, many successful retailers operate on multiple online sales channels and effectively distribute products to a very large number of buyers. Therefore, managing inventory across multiple marketplaces requires an integrated inventory and sales management solution to prevent both overselling and underselling.

THE CHANNELADVISOR ADVANTAGE Retailers never want to be in a situation where one item mistakenly gets sold to two buyers. At the same time, retailers want to make sure they’re not leaving products on the shelf that could be sold to a willing buyer. ChannelAdvisor’s Inventory Management feature is an efficient, effective system for keeping track of inventory so retailers can spend less time bogged down in the details and more time growing their businesses.

Retailers can also leverage ChannelAdvisor’s Application Programming Interface (API) to create, manage and distribute their products in bulk to eBay as well as across other e-commerce sales channels, such as Amazon and Rakuten.com Shopping. Through a direct integration with ChannelAdvisor’s API, retailers can use their existing Centralized Inventory Management solution to maintain real-time inventory quantities on marketplaces.

The eBay Designer CollectiveTo help large brands expand their reach to new audiences, eBay launched the Designer Collective in June 2014. The site features on-trend clothing and accessories from major US fashion labels such as Elie Tahari, Calvin Klein and Alex and Ani. Each brand runs its own customized “shop” on the Designer Collective, listing current-season clothing lines at full price (but with free shipping and guaranteed returns). EBay launched the Designer Collective with 16 brands but plans to expand.

eBay Brand Direct Category ViewsIn certain product categories, such as Electronics, eBay offers a subcategory called Brand Direct, accessed via the left-hand navigation bar. Shoppers have the ability to browse eBay pages, or storefronts, that are branded to reflect specific retailers.

Why Large Retailers Are Selling on EBay 4

LISTING MANAGEMENT EBay is encouraging large retailers to push their full catalog to eBay. Again, with the upfront fees at a lower cost, it’s in a retailer’s best interest to list all available products. However, managing thousands of products across eBay and other channels can be challenging.

THE CHANNELADVISOR ADVANTAGEChannelAdvisor’s API not only assists with inventory management, but it can also help you manage listings in bulk through templates and schedules. Through a direct integration with ChannelAdvisor, retailers can react quickly to changes using bulk revisions, such as real-time edits to pricing and quantities. In addition, ChannelAdvisor maintains the development and release updates for eBay and the various marketplaces. This means less time for retailers to keep up with eBay’s releases, and more time to focus on sourcing products and selling more.

ChannelAdvisor’s dynamic inventory management can find the sweet spot with quantity management and ensure that your products are getting the exposure you want them to across multiple marketplaces, so buyers have a better chance of finding them. With customizations like buffers and maximum quantities, your unique quantity strategy can be executed with sophisticated automation.

Why Large Retailers Are Selling on EBay 5

ORDER FULFILLMENT If you’re expanding to a new channel, you’ll probably need to incorporate eBay orders into your existing order-fulfillment process. Managing orders and shipping products to buyers in an efficient and timely manner is important to the success of any e-commerce strategy.

THE CHANNELADVISOR ADVANTAGEChannelAdvisor’s software receives and manages orders from every marketplace you sell on, including eBay. Once an order is placed, checkout is completed and payment has cleared, an order can be downloaded or sent via the API directly to the seller’s order management system. The order will flow through the established process and be shipped to the buyer. Tracking details will then be sent back to ChannelAdvisor so that the system can automatically notify eBay and the buyer.

BRAND RECOGNITION EBay offers a number of incentives for large retailers. Even so, retailers still need to assess whether eBay is a good fit for their brand. Historically, some retailers of luxury brands have viewed eBay as a place for brand fraud, where unauthorized items are listed. As more well-recognized brands seek eBay as another sales channel, it presents an opportunity for retailers to post their own branded, authorized listings on eBay. This gives retailers more control over their brand and its presence on the marketplace.

THE CHANNELADVISOR ADVANTAGEChannelAdvisor Marketplaces offers design templates that retailers can customize to fit their brands. Retailers can assign templates to products via the ChannelAdvisor API to streamline the listing and branding process. Along with using automated settings, retailers can tailor their messaging to buyers via email notifications and feedback.

DAILY DEAL PROGRAM If you have the luxury of having deep inventory in certain products and a good price for those products, you could be eligible for eBay’s Daily Deal program. The Daily Deal is highlighted on eBay’s homepage and can move large amounts of products, resulting in significant revenue spikes.

THE CHANNELADVISOR ADVANTAGEChannelAdvisor allows you to use the same sophisticated eBay automation to power these hyper-deals, which can boost the bottom line as a high quantity of products are promoted and convert to sales with lightning-fast velocity. Our customers use eBay Daily Deals repeatedly as a significant revenue generator in their eBay portfolio.

CONCLUSIONIf you’re a large retailer that has yet to launch on eBay, think again. EBay is working in the favor of established, well-known brands, and if you’re not selling through the channel, you’re likely leaving additional revenue on the table. ChannelAdvisor has more than a decade of experience as a third-party provider to eBay. If you’re interested in learning how ChannelAdvisor Marketplaces can help you list, sell and optimize on eBay, contact info@channeladvisor.com.

ABOUT CHANNELADVISORChannelAdvisor is a leading provider of cloud-based e-commerce solutions that enable retailers and manufacturers to integrate, manage and optimize their merchandise sales across hundreds of online channels including Amazon, Google, eBay, Facebook and more. Through automation, analytics and optimization, ChannelAdvisor customers can leverage a single inventory feed to more efficiently list and advertise products online, and connect with shoppers to increase sales. Billions of dollars in merchandise value are driven through ChannelAdvisor’s platform every year, and thousands of customers use ChannelAdvisor’s solutions to help grow their businesses. For more information, visit www.channeladvisor.com.

Why Large Retailers Are Selling on EBay 6

866.264.8594 | www.channeladvisor.com | info@channeladvisor.com

ABOUT CHANNELADVISORChannelAdvisor is a leading provider of cloud-based e-commerce solutions that enable retailers and manufacturers to increase the scale and profi tability of their global sales through dozens of online channels including Amazon, Google, eBay, Facebook and more. Through automation, analytics and optimization, ChannelAdvisor leverages a single inventory feed to more effi ciently list and advertise products online, connecting suppliers with shoppers to increase sales. Billions of dollars in sales are driven through ChannelAdvisor every year, and thousands of customers depend on ChannelAdvisor to substantially grow their businesses.

Copyright 2014 ChannelAdvisor Corporation. All rights reserved.