EBay Strikes Deal with Catalog Outlet

Auction giant eBay (Nasdaq: EBAY) has struck a partnership that will let it cozy up to the catalog industry, which in general has excelled at combining its traditional sales channel with the Web.

EBay said it will work with Altura International, a Monterey, California-based firm that provides e-commerce solutions to catalog companies. Altura is backed in part by Amazon.com (Nasdaq: AMZN), which bought a US$5 million chunk of the privately held company last fall.

Under the terms of the deal , dozens of catalog companies will auction overstocked or discounted merchandise on eBay.

Channel Changers

By linking with Altura, eBay can get a piece of what the Direct Marketing Association claims is US$120 billion a year in catalog sales . About 17,000 companies sell directly to consumers through printed catalogs.

Catalog firms also have been among the first companies to embrace multichannel selling, and they have excelled at it, outpacing even the leading brick-and-mortar chains that have embraced e-commerce.

"They have the infrastructure in place already, the customer sales reps, the warehouses," Harris Interactive analyst Lori Iventosch-James told the E-Commerce Times. "They've made the transition to online sales very smoothly. It's no coincidence that you see companies like Amazon and Buy.com try to establish their own catalogs."

Audience Access

The eBay partnership calls for Altura to funnel merchandise from its various catalog partners to the auction site in connection with its existing online brand, CatalogCity.com.

Altura said winning bidders for catalog merchandise on eBay will be directed to complete their purchases on the CatalogCity.com site.

In that way, the eBay deal mirrors some Amazon pacts in which the e-tailer shares its audience of shoppers with third-party merchants. In exchange, Amazon receives a cut of each sale without handling merchandise or customer service duties.

Fine Fit

EBay senior vice president Jeff Jordan called the catalog industry "a perfect match for eBay consumers."

"They are experienced sellers with a reputation for customer service and a first-rate distribution infrastructure," Jordan said. "The alliance offers the entire catalog industry a great doorway to the eBay marketplace."

The program's initial launch will involve about 50 merchants, the two companies said, including Alsto's, San Francisco Music Box Company, DiscoveryStore.com and Hello Direct.

Pay-for-Performance

By year-end, all of Altura's online partners will be feeding merchandise to eBay, according to the companies. Meanwhile, Altura will post tabs that lead from CatalogCity to the eBay marketplace.

Financial terms of the deal were not disclosed. Altura did say, however, that it will use a pay-for-performance model with its merchants, meaning they will be charged only if items they post on eBay are sold.

Altura CEO Lee Lorenzen said the deal will give catalog companies a "huge market of enthusiastic buyers for their closeouts, overstocks and distressed merchandise. This means our merchants can turn inventory that might normally yield only a few cents on the dollar from a liquidator into a profit center by using eBay as an additional sales distribution channel."