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Sales through eBay auctions decrease 26.2%

March 10, 2015 03:02 PM
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Online auction sales through eBay Inc. dropped 26% year-over-year, according to newly released data from ChannelAdvisor Corp. That’s a sharp contrast to eBay’s fixed-price sales, which grew 8.6% year over year.

The data is part of a ChannelAdvisor report analyzing same-store sales for clients selling through online marketplaces for at least a year.

Scot Wingo, CEO of ChannelAdvisor, attributes the drop in auction sales to shoppers’ evolving online shopping habits.

“Auctions are not convenient, and they’re really only good for a niche part in today’s e-commerce world,” he says. “This trend has been going on for quite a while where auctions are waning with consumers. As e-commerce has gone mainstream, people are less into it for treasure hunting.”

Overall same-store sales on eBay grew 5.5%, far below the 15% year-over-year e-commerce growth rate provided by comScore that ChannelAdvisor uses as a baseline for comparison.

Ebay’s growth is largely propelled by steep growth in year-over-year sales in the Parts and Accessories department of its eBay Motors section. ChannelAdvisor’s data shows 25.2% year-over-year sales growth in Parts and Accessories, a number Wingo says he finds surprising given that such sales typically don’t spike during a winter month.

“A lot of people are just buying new cars,” he says. “One of the first things people do when they buy new cars is to trick them out and buy new aftermarket parts.”

EBay’s overall growth rate again pales in comparison to that of Amazon.com, No. 1 in the Internet Retailer 2014 Top 500 Guide.

Sales for ChannelAdvisor’s clients through Amazon.com grew 22.7% year over year, slowing from growth of 27% during the holidays. 38% of  orders shipped through Amazon were fulfilled through Amazon’s Fulfillment by Amazon service, where retailers send products to Amazon fulfillment centers and Amazon fulfills those orders once a sale is completed.

Wingo says as Amazon Prime continues to grow in popularity—Prime members comprise roughly 45% of all Amazon customers—more merchants will use the Fulfillment by Amazon service.

“To get your products to be Prime eligible, you have to use (Fulfillment by Amazon),” he says. “People are really learning that the main reason to use Fulfillment by Amazon is to accelerate your online marketplace sales.”

Sales through other third-party marketplaces, which ChannelAdvisor defines as third-party marketplaces that aren’t eBay or Amazon, grew 24.2% year over year, while revenue generated through Google Shopping rose 20.7%.

With Google Shopping, Wingo says he has noticed a trend of advertisers shifting away from investing in AdWords and instead spending more for Product Listing Ads, or PLAs.

“With Product Listing Ads, you get an image, a price (and) a description,” Wingo says. “That’s just much more appealing, whereas with AdWords, you’re just looking at text links.”

 

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