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eBay In A Class All Its Own

11/24/2003 02:00:00 AM Eastern

Notably absent from this year's TWICE Top 100 CE Retailer rankings is eBay.

The online auction platform placed 13th on the prior year's listings with some $1.8 billion in CE sales transacted across its servers in 2001. But that appearance would prove to be both its debut and its swan song on the TWICE charts.

Despite topping its initial showing by generating $2.2 billion in electronics revenue last year, eBay has been excluded from the current retail rankings on a technicality: It's not a retailer.

Following much-heated debate among the editors of TWICE — and, ultimately, the ready agreement of eBay itself — the company's retail status, at least for our own internal classification purposes, was revoked and eBay was removed from Top 100 consideration.

The main issue behind our reversal is the same point of differentiation that allowed the company to survive and thrive following the tech-sector implosion that leveled most other e-commerce contenders. That is, that it owns no inventory, it records commissions and fees rather than sales, and it offers no fulfillment. That may be a wondrous business model, but by our definition, it ain't retail.

Nevertheless, in deference to this powerful new platform for new, used, returned, refurbished, end-of-life and overstocked products, let us note that eBay's CE sales were up 50 percent over 2001 and are still maintaining the same clip. Indeed, CE is the company's fastest-growing category and second largest only behind automobiles.

VP Matt Halprin, who heads up eBay's new freestanding CE section, attributes the growth to the tech-driven nature of electronics itself. "CE has a short product life cycle," he recently told TWICE. "Sellers want to move older inventory off their shelves while buyers want to upgrade to the latest models — and then sell the ones they just replaced."

Also fueling his CE business are cyber storefronts by such leading vendors and merchants as Abt, HP, Motorola, Palm, Sears and The Sharper Image. And besides its b-to-c story, eBay has developed a significant b-to-b business that includes large-lot wholesale sales. These transactions reap significantly better returns for sellers via eBay's auction and fixed-price formats than through traditional liquidators, Halprin said.

So farewell to the Top 100, eBay, and happy e-trails.

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