Web Auction Site Meets Resistance to Storefronts

By Dennis Callaghan  |  Posted 2001-04-16

eBay Inc. is looking to leverage its 28 million registered auction customers by expanding its e-commerce offerings with hosted storefronts for small business.

The plan is facing criticism from small businesses that demand a lot of services and said theyd worry about competition from eBays auction business.

For example, before it launches the Web storefronts, which are expected this summer, eBay, of San Jose, Calif., might want to talk to business owners such as Don Shingler, who once tried a hosted storefront and was disheartened.

Shingler, president of Seattle manufacturer The Down Factory, had a hosted Web storefront in an online shopping mall called iMall. When iMall joined Excite Inc.s ExciteStores iStore unit, Shingler saw his hosting fees nearly double to $80 a month, with no corresponding increase in service.

Shingler, who dropped ExciteStores in favor of Actinic Catalog, a licensed storefront software offering from Actinic Software LLC, doesnt expect that eBays large user base will necessarily translate into customers for the online storefronts. "When a person wants to buy a product, they know what product they want going in," Shingler said. "And, usually, if they know the product they want, theyve gone to a search engine to find it. I really dont see the impact of eBay hosting stores."

Other businesses fear that an eBay storefronts offerings would compete with similar products being auctioned on eBay. "When youre on eBay, youre looking for the best deal. Why would you want to buy something at a full-priced store?" asked Todd Livdahl, a co-founder of Sneetch.com, an Anaheim, Calif., online retailer. "If we were selling Gladiator for $18, thered be 20 other people on the auction side of eBay selling it for less."

"A lot of our customers put our products up on eBay [for auction]," said Kathryn Morton, president of Avonlea Traditions Inc., a Newmarket, Ontario, maker of collectible dolls. "We could alienate them if we opened a storefront there."

Though eBay officials declined to comment on unannounced plans, the company is not limited to auctions and has been letting vendors sell fixed-price items on its site since last year. But with its storefronts it will be entering a crowded market. In addition to the dozens of portals that allow small businesses to sell online, Yahoo Inc. has been hosting storefronts for years, and Amazon.com Inc. hosts specialty vendors storefronts through its zShops.

Last week, AuctionWatch Inc., of San Bruno, Calif., added the capability for merchants to sell fixed-price items through its online storefronts.

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