Smoke and Mirrors

eBay’s Express Checkout [Fool.com: Motley Fool Take] January 19, 2006

Here’s a negative piece on eBay Express by Fool.com. Given that it was just announced, I’m not sure how they can be so certain about things.

While eBay is trying to emulate leading online retailers such as Amazon.com (Nasdaq: AMZN) and Overstock.com (Nasdaq: OSTK), those merchants typically fulfill an order with items from the same warehouse. In contrast, what’s the point in lumping together an Alf alarm clock from Des Moines with a Dukes of Hazzard lunchbox from Phoenix in the same transaction?

Actually, you could make those same comments about Overstock.com or Amazon as well. About a third of Amazon’s sales are from third parties, so you may not realize when you are using a third party and when you aren’t.

Sales of products by third-party sellers on [Amazon] websites continue to increase, representing 30% and 28% of unit sales in Q3 2005 and Q3 2004, and 29% and 25% in the three quarters ended September 30, 2005 and 2004.

And for Overstock, the percentage is even greater.

During the third quarter of 2005, [Overstock] had fulfillment partner relationships with approximately 419 third parties whose products we offer for sale on our Websites. At September 30, 2005, these products accounted for approximately 75% of the non-BMV products available on our Websites.

One would think that if Amazon broke out BMV from their other categories (a huge part of their business), their percentage would rise as well.

This entry was posted on Saturday, January 21st, 2006 at 10:38 am and is filed under Commerce. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.