"How do different sites compare? What are the buyers' profiles? You want to know who you're going to encounter impulse buyers, bargain hunters, price-conscious, researched buyers who are looking for exactly what they want," Von Sosen said. Merchants must target their efforts much as they'd search out just the right neighborhood for a new store.
While reluctant to stereotype shoppers at well-known auction sites, Von Sosen pointed to some clear trends.
"For example, eBay has a lot of women shoppers, but Bid4Assets and other sites that handle property seized by U.S. Marshals and real estate foreclosures tend to have a predominantly male base," he said.
Miller says any merchant who wants to use online auctions must find a good match and stick with it. Otherwise, she warned, a business owner can end up creating merchandise listings in triplicate to meet the requirements of various auction sites.
"Many ecommerce owners think they're going to try all these sites, but I encourage my clients to put a value on their own time," she said. "Is the time required to manage multiple auctions wisely and profitably spent?" Auction management software like that offered by Vendio, Coresense and Infopia can streamline the process for a price.
"It really depends on what you want," Miller said. "There isn't a golden egg out there."
Coresense's Jacobs advises caution.
"If I were an ecommerce player looking for ways to augment, I don't know that I'd look to auctions as my growth strategy," he said. Some of his company's brick-and-mortar and multichannel clients have nonetheless found a use for auctions.
"All of them have closeouts, stuff they need to get rid of," he said. "They sell it on eBay; some sell on Overstock.com."
For Mills, Bidz was the perfect means to dispose of flat panel televisions returned to his manufacturing company, Clear Solution Partners. Its California facility handles "a tremendous amount of return product," Mills said. "The retailers send it to us, we fix it, rebox and certify it. But we'd been having issues trying to find a home for them, and Bidz is a great solution."
Even with Bidz' required $1 minimum starting price, Clear Solution Partners found it could make more money auctioning off excess flat-screen televisions one at a time as opposed to selling the same inventory to a wholesale outlet. And auctioning in this fashion is not a labor- or time-intensive venture.
"I don't need to describe it 100 times; one description matches that whole wall of inventory, Mills said. We actually even make a little money on the shipping."
The company has opted to sign on as a certified merchant with Bidz, which ensures exclusivity on that site.
"We are selling flat panel TVs like crazy, so much that we'll be bringing in other lines," he said.
Von Sosen said ecommerce owners must aim for that sort of focused goal-setting when they explore the auction component.
"Are you choosing a marketplace as your core distribution channel? Or did you just pick up 10,000 pink Reebok shoes and you need to throw them on the marketplace?" he posited. "Do you want it to be a customer acquisition tool? If so, put some loss leaders out there."
That's the approach Glenn Randolph, owner of a brick-and-mortar jewelry store in Meadville, Penn., chose. David Jewelers uses online auctioning to gain exposure, build credibility and groom customers.
"We actually budget it as advertising," he said. For his purposes, eBay is the best option. It also helped David Jewelers take baby steps into the world of online selling.
"We're located in the Rust Belt, and at one point an awful lot of people were moving away," he said. That prompted him to look at Internet sales. Over time, Randolph got a better sense of what made money on eBay and what didn't. He opened a rudimentary website and worked to build a customer base. At one point, he tried comparison site Shopzilla, but it didn't work as well. Shopping.com did work, but it was acquired by eBay, so he stuck with what fit his needs.
Around 2002, Randolph experimented with Google keywords and a PPC campaign to drive more traffic to his site. It worked to a point. But the expensive advertising didn't always result in sales.
"Since I'm not a national chain, people who came to my site were reluctant to buy. He realized the eBay feedback system was more valuable to him than the auction revenues his carefully selected, lower-priced eBay Auction and eBay Store items generated.
"We have 99.8 percent positive customer ratings on 34,000 items, and that reassures first-time buyers," he said.
Randolph heeded Miller's advice to communicate with customers, gather information from them, and protect his data. Andale software from Vendio enables David Jewelers to offer customers optional sign-up for special offers via email, thereby acquainting them with the store's own site. It also runs a consistent checkout platform no matter where purchases originate.
"They can buy multiple items from eBay and from our store all at once, with one payment and one shipping fee," Randolph said. The software is not inexpensive but I ask them to customize it for me, rather than building things from the bottom up.
Coresense and Infopia emphasize the benefits auction management brings to the process of listing items to meet specifications of multiple auction sites, selling, retaining customer information and analyzing what makes the most money and which fees are wasteful.
For merchants on the smaller end of the spectrum, auction management software is not an option, so careful selection is even more critical. Dallas resident Bobby Beeman operates ToyRanch, which sells collectible toys primarily on eBay. That wasn't always the case.
"I've used a lot of other auction sites in the past and at times, it's been good," he said. "I used Overstock some, and that worked when I was selling a different type of merchandise.
