Are Niche Online Selling Sites Giving eBay a Run for Its Money?

When people think of an online selling site, they often think of eBay. Granted, eBay has been around since 1995 and is one of the most recognized auction sites around. However, many users of eBay have become disenchanted with this online marketplace. For starters, eBay listing fees can range anywhere from $0.10 to $4.00 USD. Listing options, such as a highlighted or bold listing, carry an additional charge. There is usually no reimbursement for these charges if the item does not sell. And then there is the final value fee, which can be a whopping 8.75% on items carrying a winning bid price of $25.00 or under.

There is also a significant time investment when selling items on eBay. The seller must provide a shipping charge estimate to the buyer and pack up the sold item(s) for shipment. Shipping materials are not provided by eBay and must be purchased or located separately. Quite often, the seller must pay additional shipping charges if there is an erroneous shipping estimate or if the buyer is international.

Finally, a seller who lists an item with eBay is not guaranteed a sale. Sellers often end up listing items several times before they are finally purchased. This results in significant frustration, as well as wasted time and money for the seller.

In response to these fees and other inconveniences, smaller niche sites have been appearing online. One such example is Gazelle.com, which is the product of Second Rotation Inc. This site pays sellers a set price for gadgets like iPods and laptops. If a price is agreed upon, the company sends the seller a shipping label and/or packaging materials. Items received back at Gazelle are photographed and put up for auction.

Meanwhile, Glyde Corp., started by an ex-eBay executive, offers a marketplace for used books, DVDs, video games, and other media. The site Glyde.com charges no listing fees, and will even send a stamped mailer to the seller after the item is sold.

Other niche sites that are popping up online include Etsy.com, which buys and sells handmade crafts, Bonanzle.com, which buys and sells collectibles, and Kashless.org, which lists and finds free local products.

eBay is taking steps to improve its seller experience, however. For example, the site recently allowed outside software developers to create unique eBay applications. One such developer is United Parcel Service Inc., which created an application that automatically calculates shipping charges for listed items and then facilitates the printing of shipping labels.

eBay does have some cause to step up its service; in the last week of November 2009, the site experienced a 4% drop in the number of unique visitors. In the first week of December 2009, eBay experienced an 8% drop in the number of unique visitors (1). Such drops were surprising, given the fact that traffic should have actually increased due to the holiday season.

Reference:
1. Site profile for eBay.com http://siteanalytics.compete.com/ebay.com/