Networking Gear Hot Ticket on eBay

Its a long way from collectible pez dispensers and beanie babies, but networking equipment worth thousands of dollars per router and switch has become a hot item on the online auctions of eBay Inc.

The category is so hot, in fact, that an eBay executive, Maynard Webb, president of the technology division, for the first time is a keynote speaker at the NetWorld+Interop show in Las Vegas this week. Such exposure comes a little more than a year after eBay formally set up the dedicated networking and telecommunications category on its auction site in February 2001. Webb is expected to address the resale market for networking gear as part of his talk, eBay officials in San Jose, Calif., said.

EBay officials say the site recorded a 141 percent increase in sales in its networking and telecom category in 2001. On average, the rate of sales in the 25,000-item category is 1 every minute, said Sergio Monsalve, general manager of the category for eBay. Equipment on the site is mostly used and includes gear from Cisco Systems Inc., Nortel Networks Corp., 3Com Corp. and Juniper Networks Inc.

So why the sudden rush to buying mission-critical networking hardware from the likes of eBay? Its simple, IT buyers say: lower prices and a surge in available used equipment.

"You can find incredible deals because theres a seeming glut of equipment," said Kurt Anderson, president of regional ISP Honeycomb Internet Services LLC, in Minneapolis.

Anderson has saved thousands of dollars on router and switch purchases. In one case, when Anderson needed to purchase what can usually be a $15,000 pre-owned Cisco 7513 router, he used listings on eBay as leverage to get a lower price from a local used-equipment reseller and bought components for the router online, all for about $6,000.

So far, networking vendors say, while sales of used gear on sites such as eBay are up, the impact on their total sales remains small. But theres no denying sales of their products on eBay have caught their attention.

"We dont feel that its significant in terms of our overall business," said Eugene Lee, vice president of worldwide enterprise marketing at Cisco, in San Jose. "Does it cause issues? Sure. On a deal-by-deal basis, there is an issue. But we would be doing something about it if it was significant."