Keeping the masses at eBay


11 Jan 2007

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Popular auction site eBay is probably the last place you’d expect to discover an Irish electronics company that sells refurbished devices like Palm Treos to more than 30 countries worldwide. But for Ken Doyle ((pictured), managing director of Swords-based Luzerntech, the auction site represents the lion’s share of his company’s business.

Doyle’s company currently employs 35 people reconditioning electronic gadgets and the company seals in excess of 6,000 deals a month on eBay. The Dublin company is counted by eBay as one of the top five power sellers of goods in the UK, France and Spain.

Because the site has its own tamper-proof payment mechanism – through sister company PayPal – and connects with millions of motivated buyers, Irish companies focused on exporting overseas, as well as individuals, are finding the auction site to be a ready-made model for e-commerce.

Started up in 1995 in California, eBay is generally regarded as 21st-century flea market or brick-a-brack store. But growing numbers of dedicated businesses – or power sellers in eBay slang – would disagree and many would view the auction site as a primary or secondary revenue channel.

The auction site, which employs 1,200 people in Ireland at its PayPal operation in Dublin, boasts more than 212 million registered users and there are some 1.3 million businesses that have been built around the service.

“Around 85-90pc of our products are exported around the world,” says Doyle. “We’re in business three years from a facility here in Blanchardstown and we have distribution centres in Madrid, Hamburg, Amsterdam and Bristol.

“We have our own web store but certainly eBay would be our primary business channel. We began refurbishing electronic devices for resale and our business evolved and morphed around the eBay model.

“We certainly find that for our product set the eBay market is an interesting and exciting place to do business. It is a captive audience that is looking for bargains.”

As well as businesses, the Irish online population has caught the eBay bug. It is estimated that an item is sold by an Irish eBayer every minute. Most popular Irish categories include computing, electronics and collectables.

EBay Ireland managing director John McElligott explained that the company is stepping up its efforts to be a facilitator of online commerce for Irish small and medium-sized companies.

In May, eBay launched a dedicated website, www.ebay.ie/businesscentre, to help small businesses to use the auction site as a sales channel. The site contains useful information about legal obligations as business sellers and tips on how to maximise sales. Further information can be obtained by emailing irishbusiness@ebay.com.

“Our heritage has been as a place to sell second-hand items from old closets or attics but we’ve moved forward since then,” says McElligott. “There are real businesses using eBay as an additional channel. Dell, for example, uses eBay as a secondary channel for selling computers. It really is useful for businesses that are trying to squeeze out an extra bit of growth.”

In terms of helping Irish businesses to sell to a world audience, McElligott says eBay provides what he describes as an “on ramp” service that takes businesses through steps such as Vat registration and getting the payment mechanism in place.

Two years ago eBay acquired voice over IP provider Skype for US$2.6bn in stock and cash. McElligott says that businesses can integrate Skype into the online sales process and talk to potential buyers. “It’s particularly useful if you are in Ireland and a high proportion of your calls are international calls.

“It could come in handy when trading with North America, where US buyers are particularly wary of calling overseas. You get a Skype-in number and if you’re based in Ireland you can have a US or UK number that comes through to your Irish number.

“Irish businesses are export-focused anyway and eBay is an easy way of trying out new things, easier than many other channels,” says McElligott.

Despite its popularity, eBay has been a magnet for fraudsters either selling stolen goods or not shipping what you paid for. The company devised a fraud prevention mechanism called its feedback system whereby after every transaction both the buyer and seller have the option of rating each other. They can give a “positive” or “negative” or “neutral” rating and this can have a big bearing on winning future business.

“We’ve generated over 60,000 feedbacks at this point and are doing in excess of 6,000 auctions a month,” says Doyle.

Doyle’s company has gone as far as to develop a set of proprietary applications around the eBay model that he provides to other Irish businesses on a consultancy basis. “We developed a software that allows us to manage multiple auctions and look after all the payment clearance, cash collection and logistics.

“We’ve effectively made the eBay channel more enterprise-friendly. There’s lots of opportunity on eBay for enterprises to sell on an export basis than on a domestic basis.”

Doyle’s advice to businesses looking at using eBay as an additional sales channel is to take it seriously as any other channel for business. “The whole management of auctions and transactions can be more complicated for a business than an individual seller. Be prepared to manage it properly.

“It depends on the scale of your company and how seriously you take eBay as a channel but undoubtedly there’s lots of opportunity there,” Doyle concludes.

Case study: Something old, something new

Davoc and Anny Rynne are an elderly couple based in the remote village of Milltown Malbay in Co Clare.

The pair have been full-time antique dealers since 1964. They first encountered eBay in 1998 and in tandem with their own website at www.irelandcountryantiques.com sell antiques primarily to North America from the Irish-Celt store on the popular auction site.

“Selling on eBay was a big leap from filling 40-foot containers to filling padded envelopes,” says Davoc.

After receiving a computer as a present in the Nineties Davoc took to the online auction world like a fish to water, initially selling old postcards to Australia.

“My primary interest, however, was furniture and in no time I had made about 10 or 15 trades. With the help of my son I bought a digital camera and got involved in selling. At one point we were selling 90pc of the goods that we put up for auction.”

Davoc says that 90pc of the company’s customers would be Irish exiles, 80pc of whom would be in North America. “At this stage we would have managed more than 15,000 transactions,” he explains.

He says that eBay has gone on to become Irish-Celt’s primary sales channel and the company has moved away from selling furniture to smaller collectable items like railway memorabilia and militaria.

Davoc believes there is still a considerable learning curve for Irish antique buyers using the site. “People in this field are traditional and don’t trust the internet. They prefer to be at a physical auction.

“But the reality is you can trust a seller on eBay better than a bricks and mortar auction sale. ‘Conditions of sale’ would cover an auctioneer in a dispute but on eBay thanks to the feedback system I’ve a reputation to keep and people will notice if there’s been a dispute,” says Davoc.

WHERE ON EBAY: Irish companies found trading on eBay

i-sold it
A Stillorgan-based company who will sell your items on eBay for a commission

irecrafts
A Galway-based man is using eBay.ie to sell crafts, jewellery and collectable items.

irishgolfbooks03
A Wicklow-based man is using eBay.ie to sell sporting books and memorabilia. He thoroughly enjoyed the Ryder Cup season!

techstuffireland
A Louth-based husband and wife team use eBay.ie to sell consumer electronics as an additional ‘wing’ to their family computer software business in Dundalk.

By John Kennedy