EBay has announced plans to work with consulting firm Accenture to link retailers and manufacturers that want to sell excess merchandise directly to eBay’s 46 million customers around the world.
The program, known as “Connection to eBay,” targets what the two companies said is US$80 billion worth of excess or unwanted inventory produced each year in the United States. The deal calls for Accenture to own and operate the service and for eBay to receive a commission on sales.
Separately, eBay announced a two-part agreement that calls for VeriSign to provide security and user verification services to eBay and to sell domain names on the auction giant’s site.
EBay Technologies president Maynard Webb called the Accenture effort a “natural evolution” of eBay. The auction giant increasingly has targeted large corporations as sellers in its marketplace, which initially was founded on person-to-person transactions.
“That makes sense, because they need to really expand beyond their traditional core of collectibles if they’re going to meet their revenue goal of $3 billion annually by 2005,” Morningstar.com analyst David Kathman told the E-Commerce Times.
The service has already been tested quietly and will ramp up to a full-blown launch by year’s end, the two companies said in announcing the pact at the NetWorld+Interop conference in Las Vegas, Nevada.
The deal seems positioned to build on eBay’s successful alliances with such companies as IBM and Radio Shack, which already use the auction site to sell directly to consumers.
Robert Frerichs, managing partner in Accenture’s Communications & High Tech group, said that most companies have inefficient processes in place for unloading excess merchandise.
By using eBay, he noted, retailers and manufacturers can achieve a greater rate of return on those goods by essentially eliminating discounters and selling directly to buyers.
Security: Job One
The VeriSign deal was described as a “multiyear services and marketing alliance,” though exact terms were not disclosed.
The agreement calls for eBay to implement VeriSign authentication services on its auction site. New users will register through the company’s Authentication Service Bureau, enabling their identities to be verified in future transactions. In addition, VeriSign will sell domain names through eBay, starting with new “.bz” domains.
“The VeriSign deal also fits with things eBay has already been trying to do, though the financial effect will probably be much less overt,” Kathman said. “Security is always a big concern for eBay, in terms of both avoiding online scams and protecting the personal information of their users.
“User trust is actually one of eBay’s most important intangible assets,” he added. “Anything eBay does to solidify their security makes sense to me.”
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