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Growing revenue, brands via eBay

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Dave McMahon, Editor in Chief
December 11, 2013
Filed under Features, Top Stories

Brands, dealers benefit from e-commerce storefronts

Brand perception takes a front-and-center spot at the list of concerns of successful companies. When a brand lands in less-than-positive light, or becomes associated with an unbecoming environment, the public relations issues that ensue can become detrimental.

On the other hand, placing the brand in front of an eager marketplace, or alongside admirable other brands, can bring a boost to product sales.

When it comes to e-commerce, brands face the same challenges. Do I want my brand here? Is this what my brand stands for? Shopatron vice president of client success, Greg Squires, encounters executives from the powersports industry who have to make the decision on where their brands are best suited from an e-commerce perspective.

And when the idea of managing their brand on eBay arises, he still encounters headwinds.

“There are still folks out there who have a dated view of the eBay brand, as kind of a garage sale, if you will, just used goods. Honestly, people who have that opinion haven’t been on eBay in the last five years,” Squires said. “I’ll ask them if they’ve shopped on eBay in the last few years, and their response is no. So then I ask them to take a look at eBay’s new branding, and the data that shows that 70, now closer to 80 percent of products sold on eBay is New/Buy It Now.”

Most recently, Ducati North America launched an eBay store powered by Shopatron. In total, 38 powersports brands partner with more than 1,800 fulfillment partners on the Shopatron network. From January 2011 through December 2012, powersports brands with Shopatron increased same-store sales revenue by 68 percent. Among the other brands using Shopatron’s distributed order management system are Suzuki, Kawasaki, AGV, BRP and Arctic Cat. Several of the brands also use Shopatron’s online marketing services, as well as its marketplace service that sets up and integrates the Shopatron order management solution in eBay stores.

Success with eBay

The idea that eBay is home to more than only used and auction-oriented products can be hard for some to overcome. But with insight about eBay and where it’s headed, most executives in charge of their brand’s e-commerce channels come to understand that it’s a strong home for their brands.

Dealerships that serve as fulfillment partners for OEM eBay stores, such as Ducati’s, can expect to experience a rise in parts and accessory sales thanks to a growing lineup of P&A inventory.

Dealerships that serve as fulfillment partners for OEM eBay stores, such as Ducati’s, can expect to experience a rise in parts and accessory sales thanks to a growing lineup of P&A inventory.

“The thing that really gets brands over the hump is understanding incremental sales,” Squires said. “eBay has done a number of studies with Forrester Research that have found that a significant number of transactions that are placed on eBay, when compared to a retailer’s own website, they find it’s 70-90 percent incremental customers. So if I’m comparing email addresses of those buying on eBay with those buying on my website, there’s very little crossover. It’s a different pool of 120 million buyers shopping there and in large part primarily there.”

Squires has encountered plenty of “standoff-ish” executives who raise both eyebrows when the idea of an eBay store arises. Yet they eventually understand it’s another way for them to control their brand in a positive setting.

“eBay’s a very interesting and strong partner of ours,” Squires said. “It’s a marketplace that’s very different from Amazon, in that they don’t sell to their sellers, and they don’t buy from their sellers. Amazon is a retailer, eBay is not. eBay is a pure marketplace.”

From pricing to how products are displayed, OEMs that opt for eBay stores to sell parts and accessories continue to appreciate the control they have of their brand in front of the aforementioned 120 million potential customers.

“What the first see on eBay is something they don’t like, but then they understand they can own the channel, in the same way that a lot of brands own Amazon, and really leverage it as one of their top customers as an avenue to drive sales,” Squires said. “It allows brands to expand their online footprint and No. 1, grow sales through that expanded footprint; No. 2, portray your brand in a way that you can define and control, much like you do on your own site; and No. 3, have more more control over pricing. It’s a way to combat some of the things on eBay that you don’t like to see. Instead of sitting on the sidelines and wishing in weren’t happening, you can step in and take control.”

Dealer involvement

Shopatron’s success with eBay stores and online fulfillment in the powersports market has largely been due to the high level of dealer integration.

“The secret sauce of what Shopatron has brought to eBay is something that hasn’t really existed before — working together with the brands’ channel partners to fulfill online orders,” Squires said. “In the same way you can sell on an Arctic Cat-branded site or Ducati-branded site as direct-to-consumer while involving your local stocking retailers as fulfillment partners, why not do that on eBay as well. You’re driving demand for a lot of the same products to a different base of customers. It’s been a nice way for our manufacturer partners to expand the pie of orders that their dealers can participate in.”

Local dealers need to have the product in stock in order to fulfill the order, either via an in-store pickup or shipment.

“That idea itself increases stocking levels of fulfillment dealers, and it gives those dealers more incentive to put more on their shelves so they can participate,” Squires said.

If a customer purchases a jacket from the manufacturer’s eBay store but the local dealership doesn’t have it in stock, it could be shipped from a dealer that has it in stock.

New customer base

Squires notes that the manufacturer websites typically see a different buyer demographic than that of eBay storefronts. eBay buyers trend toward price-sensitive, younger, male and using mobile devices. “Deal hunters,” as Squires says. Buyers shopping on the manufacturer’s site are seeking convenience, figuring the easiest thing to do is buy from the manufacturer’s site.

And did we mention mobile?

“Mobile transactions on eBay are getting to 20-25 percent, so a significant amount of mobile traffic and purchase,” Squires said.

Those customers who are purchasing from the manufacturer’s eBay store are also likely to buy more when they come into the dealership for pickup. Hence, fulfillment dealers typically buy deeper into the P&A catalog since none of Shopatron’s powersports manufacturers ship to customers; all shipments come from dealers.

“Our surveys ask dealers that question specifically,” Squires said. “Our data shows that 50-60 percent of retailers that participate with  a brand and fulfill their online orders increase their buy by 10 percent or more for brands that share online sales, online demand with them.

“So the fulfillment dealers are putting more product on shelves, helping the brand sell more in all channels. If you’re putting more product on the shelves, you’re certainly going to have more sell-through at retail. That’s the biggest challenge for a manufacturer — to not just have your dealers stock your top 10 items, but to get a full product line and have a stronger representation of the brand’s products. The local dealer wants customer loyalty as well.”

The key to generating success after opening an eBay storefront, Squire says, is threefold: pricing, inventory and managing the channels. And with that, the idea of eBay as an online garage sale falls by the wayside.

 

Comments

4 Responses to “Growing revenue, brands via eBay”

  1. Rich Vernadeau on December 11th, 2013 12:36 am

    Ebay propaganda at its best. Thousands of small sellers are being restricted from selling yet being charged store fees by ebay while unable to list or sell anything in their stores! Ebay’s tactics towards small sellers: In 2008 John Donahoe (CEO) made it clear he wanted to move away from a flea market operation to brand name big box retailers. With numerous policies that were enacted to eliminate small sellers (chief among these the flawed DSR system) he has been succeeding with a vengeance. 1) The DSR system adversely impacts small sellers more swiftly and egregiously then it does the favored big box and high volume retailers. 2) 15,000 small sellers were axed by ebay on August 6, 2013. 3) The automatic five-star DSR glitch/malfunction that ebay has admitted not fixing was responsible for at least some those purged getting purged because many were only out of compliance by one DSR star 3) The elimination of the policy compliance feature on the seller dashboard. If anybody thinks that was not purposefully done to hurt small sellers, I have some acreage on the moon I will sell you 4) ebay’s latest user agreement update that went into effect October 26 granting itself permission to hide sellers’ listings. The majority of sellers on the ebay discussion boards think ebay had already been hiding sellers’ listings 5) Ebay’s numerous moves in past user agreement opt ins or opt outs to try to insulate or protect itself from class action lawsuits 6) this new managed returns issue (see new user agreement) 7) the fee hikes 8) the misuse/abuse of the DSR system and Guardrail or Quick Decline and trending to rob good decent sellers of TRS status and discounts they would get as well as suspend or restirct them from selling.

    [Reply]

    Ryan Thomas Reply:

    Rich,

    You make some valid points. We all know eBay is not a perfect market place, but the solution that Shopatron is incorporating is directly supporting the small retailers, not big box. The brand is using it’s power to create consumer confidence purchasing through this channel. The brands are able to market the products in the best way possible and capture the sales for the mom & pop retailers who are stocking their products through a traditional retail business model.

    Shopatron is one of the few companies out there that is keeping small businesses alive…

    [Reply]

    Mike (Shopatron & eBay seller) Reply:

    Shopatron “appears” to be supporting dealers; but so few dealers are actually participating that the OEM ships many of the orders direct to the consumer (bypassing the local dealer AND the online dealer) – and in reality; if an OEM wants it can choose to ship the order direct from its warehouse, before the order even hits the board for bidding by dealers.

    eBay works pretty good, but the fees are killer; much like Amazon fees, Shopatron fees, and any PPC at google. figure 8-10% of Sales in fees, so much less take home for the owner when selling anywhere other than his own site.

    Seems that the OEMs could just as easily put a ‘get quote from local dealer’ like Yamaha is doing. No fees to Yamaha, No fees to Dealer; customer is contacted by local shop.

    just my 2 cents

    [Reply]

  2. Mike (Shopatron & eBay seller) on December 12th, 2013 11:30 pm

    Shopatron’s dirty little secret is that the Manufacturer can choose to fulfil the order themselves if they want, bypassing the local dealer. So while Shopatron ‘SHOULD’ be supporting local dealer if he has the item in stock; in practice the participation is so low for Shopatron that many of the orders are fulfilled by the Manufacturer.

    [Reply]

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