In a move that will impact hundreds of auctioneers worldwide, eBay are to discontinue their Live Auctions business by the end of this year.
In short, no ‘bricks and mortar’ auction houses will be able to bring their catalogues to eBay’s 200-million-plus audience after December 31.
eBay vice president Jim Ambach issued the following statement on April 15: “As we work to improve the buying and selling experiences… we need to make sure our resources are aligned with our priorities. In the case of Live Auctions, maintaining and improving this platform falls outside our immediate focus, and will, therefore, be retired at the end of the year.”
For several years, eBay have partnered a small number of independent auction providers including Artfact, icollector and LiveAuctioneers, who in turn work directly with traditional auction houses to supply merchandise and auctioneers for eBay Live Auctions. eBay also allowed companies such as GoAntiques to run ‘virtual’ auctions composed of their clients’ items with no real-life auctions associated with them.
The impact on these providers and their clients will be substantial.
In a letter to clients, Julian Ellison, chief executive of LiveAuctioneers, announced the news and outlined the development of their own independent real-time internet bidding platform to take over when eBay Live Auctions ceases operations. “After a very successful and mutually beneficial five-and-a-half-year partnership with eBay Live Auctions, LiveAuctioneers.com is going to be operating as a separate entity,” he wrote.
On the day the eBay made their announcement, LiveAuctioneers issued a press release saying Texas-based Heritage Auction Galleries had become their 700th auction house client. Live Auctioneers reported that sales revenues for their company exceeded $100m in 2007, but the withdrawal of the eBay audience threatens a successful business model and the future of those ‘virtual’ auctioneers in the United States who only conduct sales over the internet.
Online bidding remains in relative infancy in the UK but there are specialist salerooms for whom this will represent a setback. Graham Budd (sporting memorabilia), and Vectis (toys) both worked with LiveAuctioneers, allowing them to embrace, rather than compete with, the self-styled online global marketplace.
eBay’s decision comes after the company introduced seismic changes to their fee structure and to their Feedback program as they strive to meet the challenges of customer satisfaction, increasing competition and litigation. While no figures are available, Live Auctions represents a very small part of the eBay business that is forecasting record annual revenues of up to $9bn this year as they aim to leave behind their flea market origins in favour of a more retail-like experience.
It also comes in the wake of two David-and-Goliath lawsuits aimed at the eBay Live Auction platform that were recently filed in California. One eBay Live Auction seller is suing eBay for affording an unfair competitive advantage to another eBay Live Auction seller who is also being sued (along with eBay in an unrelated lawsuit) for allegedly shill bidding on the platform.
Jewellery specialist Windsor Auctions filed their unfair competition/antitrust action in December 2007. Windsor (who uploaded sale listings through eBay’s partner Live Auctioneers) allege that competitor Hot Jewelry Auctions were given preferential treatment having elected to interface with eBay directly.
Specifically, Hot Jewelry were provided with a ‘batching tool’ that could be used to upload listings in small groups on an hourly basis thus pushing them to the front of eBay’s ‘core’ listings. In essence Hot Jewelry‘s lots received top placement exposure as they flowed through eBay ahead of all other live auction sellers and even those of regular eBay sellers within the jewelry category.
eBay, who have suspended Windsor’s user names on the site, have asked that the court dismiss the suit.