B-To-B Reach RefinedB-To-B Reach Refined

EBay Inc. last week launched a business-to-business site, the eBay Business Marketplace, that gives companies a single place to buy and sell all types of goods and services.

For some time, the online auctioneer has been a popular place for companies that want to sell excess merchandise and for small and midsize businesses looking to buy computer and networking equipment, office equipment, capital goods, and wholesale goods. In fact, eBay lists some 500,000 business items every week. But until now, those items haven't been aggregated in a single site for easier searching, says Jordan Glazier, general manager of eBay Business. EBay expects the new marketplace to gross more than $1 billion in sales annually.

EBay isn't the first online action site to offer business-oriented selling services. ReturnBuy, AuctionWorks, and several others do. But eBay's brand recognition and the tight relationships it has already forged with numerous big sellers, such as Home Depot, IBM, and Motorola, are points in its favor. It also partnered with Accenture in October to offer a service that's designed to help very large companies sell on eBay.

EBay proved to be a big money-saver for Dedicated Digital Technology Inc., a machine shop that designs and makes all types of custom equipment, from vertical lifts for warehouses to lid presses. For about $100,000, Dedicated Digital outfitted its 7,500-square-foot office and manufacturing shop by purchasing goods on eBay. Buying all that at list price would have cost more than $750,000, says Greg Smith, a VP at Dedicated Digital. "We have not gone to the bank and borrowed one dime. We paid for everything out of pocket," he says.

Though Smith says the new site will likely drive up the cost of goods sold on eBay, at least in the near term, "overall, it's a good thing,'' he says. "A rising tide floats all boats. So there will be more products to choose from."

EBay says sellers find value in having an arena to reach the highly fragmented and hard-to-reach small-business market. "Our strength is the many-to-many model," Glazier says. "Companies are finding eBay's model an efficient way to reach that audience."