eBay Outsources Enterprise Marketplaces to FreeFlow

The world's largest online auctioneer will now have an instant outsource partner to handle all of its pre- and post-auction inventory details.

FreeFlow, a provider of online inventory asset management services, revealed a new service partnership with eBay on Dec. 19 that will allow enterprise customers from both companies to maximize sales of excess, aging, returned and refurbished inventory.

Five-year-old FreeFlow, based in San Jose, Calif. and Tralee, Ireland, provides manufacturers with business services and software to solve asset-recovery problems via a subscription-based, turnkey package.

In return, eBay—the worlds largest online auction channel—now has an instant outsource partner to run its high-end, private-label enterprise marketplaces and handle all of its pre- and post-auction inventory details, which include financial clearing and shipping.

"Rather than build head count, eBay chose to use our depth of experience and our award-winning software and services," FreeFlow founder and CEO Alan Scroope told journalists and analysts on a conference call.

"We have similar client profiles, and we both believe that 2007 is the year that online auctioning is heading into the mainstream."

eBays private marketplace abilities and FreeFlows pre-auction and post-auction business services present buyers and sellers with new options for maximizing inventory asset recovery, Scroope said.

"Customers want to reach the broadest possible market for their at-risk inventory while minimizing expenses in technology and management overhead," Scroope said.

There is enormous opportunity for the channel to increase revenues and improve life-cycle management of product inventories leveraging online private marketplaces, Tiffani Bova, research director in IT sales channels at Gartner, told eWEEK.

"As companies move in this direction, demand will increase for a broad range of service alternatives, ranging from internal site development and management, to fully hosted platforms and outsourced business processes," Bova said. "This will be a key trend to watch in coming years.

A partnership such as this one between FreeFlow and eBay is one way which companies can improve their internal processes by outsourcing the function and re-assigning current resources to other revenue-generating activities, Bova said.

"Managing this part of the business and improving inventories in an efficient and effective manner is good business," Bova said.

Looking at alternative means to accomplish this may just produce improved margins and revenues, she said.

"Any and all managers and executives who are focused on improving the disposal of unwanted, excess, obsolete, returned or refurbished inventory would be most interested in this partnership," Bova said.

With unwanted inventory to sell, FreeFlow provides companies with market intelligence to establish reserve and target pricing, identify the buying community appropriate to the products, configure and merchandise their private marketplace, and perform all financial settlement.

FreeFlows pre-auction services include remarketing strategy and market analysis, market intelligence, auction strategy and pricing advisory. The companys post-auction services consist of financial clearing, collections and settlement, shipping and logistics support and performance reporting.

/zimages/2/28571.gifClick here to read about how eBay manages its storage.

"FreeFlows comprehensive pre- and post-auction services allow us to extend an even greater range of support to our customers," said Howard Rosenberg, director of eBays Private Marketplaces group.

By linking with eBays private auction platform, FreeFlows customers will benefit from eBays feature set, which includes a broad range of auction format types, buyer classifications, customization and data reporting capabilities.

Both companies will integrate each others software into their own systems during the next several months, Scroope said.

FreeFlows customers will gain the ability to sell into eBays Reseller Marketplace, and thus access the tens of thousands of eBay PowerSellers registered to purchase there.

eBays Private Marketplaces team provides enterprise-level, private-label marketplaces that benefit from eBays technology infrastructure to ensure reliability and scalability.

These marketplaces, which carry the customers brand look and feel and are located at their chosen Web address, are typically used to create a private environment for liquidation of excess inventory to a closed group of buyers who are invited to participate by the marketplace operator.

eBays Reseller Marketplace is an eBay-owned and operated marketplace, separate from eBay.com, where eBay PowerSellers can bid on inventory for resale.

Open only to eBay PowerSellers, this marketplace provides access to inventory for purchase directly from manufacturers, liquidators and wholesalers.

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Chris Preimesberger

Chris J. Preimesberger

Chris J. Preimesberger is Editor-in-Chief of eWEEK and responsible for all the publication's coverage. In his 13 years and more than 4,000 articles at eWEEK, he has distinguished himself in reporting...