EHobbies To Double Sales Through Amazon, EBay
hobby and toy e-tailer is making its assortment available as a third-party
retailer, hoping to boost its exposure.
that partnering with potential competitors will boost rather than hurt growth,
eHobbies will debut nearly all its products on the sites of Amazon.com Inc. and
eBay Inc. in May.
retailers like J.C. Penney Co. and Hewlett-Packard Co. have placed their wares
on Amazon and eBay to capture more sales, and the same strategy may be even more
advantageous for smaller e-tailers. EHobbies sells slot cars, radio-controlled
toys, plastic models, and telescopes and binoculars.
think I'd win against Amazon even 50% of the time," said Chief Executive Seth
Greenberg, adding that the popularity of Amazon and eBay is indisputable. "We
want to be where customers are comfortable shopping."
currently sells a few items in eBay auctions but will soon set up eight to 10
eBay stores to focus on specific hobbies. The stores will sell products at fixed
benefits outweigh the cost of these partnerships, said Greenberg. Selling
through the large shopping portals allows eHobbies to cut down on less efficient
marketing through comparison-shopping engines. Greenberg also hopes eHobbies can
convince the customers that purchase through Amazon and eBay to go directly to
its Web site.
eHobbies began selling about a third of its 75,000 product stock-keeping units
through Amazon on Dec. 20, the company's business has already grown nearly 20%.
That's not bad considering eHobbies has had its hands tied behind its back, said
Greenberg, pointing out that eHobbies hasn't been integrated into the Amazon
template yet and that Amazon customers could only find eHobbies' products by
specific searching. In about a month, eHobbies should be built into Amazon's
categories, said Greenberg.
executive notes that because Amazon wanted to increase its products in the toys
category, the shopping portal moved quicker to work with eHobbies than it
normally does with small third-party merchants. "We're the benefactors of
something between Amazon and Toys ‘R' Us," said Greenberg, referring to the
lawsuits the two filed against each other last year regarding an exclusive toy
selling agreement. He added that only about 1,000 of its SKUs overlap with Toys
"R" Us Inc. merchandise.
had about $10 million in sales in 2004 and expects that figure to double this
year due to selling via Amazon and eBay.
there aren't limitations to being a third-party retailer. EHobbies hasn't been
able to provide its Amazon customers with the same level of service it provides
via its own Web site. Customers with questions are only provided with an e-mail
address for eHobbies and can't use the running dialog feature that eHobbies
provides on its own site. Amazon also doesn't provide PayPal as a payment
option, something that eHobbies' direct customers use.
these kinds of partnerships, growth for a smaller retailer like eHobbies can
come with enormous marketing costs. The company doesn't have the budget to pay
for catalog postage or mailing lists of potential customers, said Greenberg. So
the e-tailer will have to depend on Amazon and eBay to bring in much of its new
preparation, eHobbies plans to replace its back-end system with a platform that
can easily push out data for thousands of products to Amazon and eBay and take
in orders as well as integrate with distribution feeds from manufacturers.
Greenberg said the site doesn't have any urgent problems with Bock Interactive
Inc., which currently handles order processing, but nevertheless the e-tailer
wants a more powerful system to handle bigger sales this Christmas. EHobbies
will choose a platform by the end of March and implement the technology during