Should you place a bid on eBay?

By Joel Shore, |  Business

Last week, eBay and friends rolled into town for something called eBay Live, the worldwide gathering of eBay employees, eBay users, and lots of ancillary eBay services. Who woulda thunk -- but there's an integrator angle.

Let's forget about the mom-and-pop people who are selling old record albums out of their basement and instead think about the many, many organizations that are completely virtual, doing huge amounts of business selling thousands of products exclusively on eBay. Thousands of these outfits exist, though I don't really know what to call them.

A market that provides software and services to these eBay virtual storefronts is thriving and growing. On the exhibitor floor, I counted close to a dozen small companies that sell very sophisticated inventory management and customer-billing programs that plug into the eBay APIs. These companies are looking for customers, but are not all aware that they should be looking for channel partners, too. Put it this way, the software is more sophisticated in some cases than the people purveying it.

I talked to a couple of these vendors (walk into a tradeshow with a press badge and the willingness of vendors to talk is high) about their market and growth potential. Both said essentially the same thing: We're small and we don't really have the resources to get in front of the eBay sellers who do enough volume to benefit from what we have. When I asked whether they've partnered with solutions integrators in various geographical regions, they had neither pursued the idea nor given much thought to it.

They both found the idea appealing. You might, too, though this hardly represents a basket into which even the smallest of integrators would place all his or her eggs.

Several vendors gave me demos of their inventory management and billing programs, and I must say these are industrial-strength applications that look and feel every bit as solid and polished as something you'd see from a major software house. One is in the process of developing a hosted version, selling the product as a subscription.

A challenge these developers face is eBay itself. While it welcomes the development of third-party add-ons, eBay itself has divisions and subsidiaries that develop and market competing tools (some free, some fee-based). We all know about PayPal, yet I saw several independent vendors selling alternative payment-processing solutions. And while eBay has seller tools such as TurboLister (a free application) and Blackthorne (a hosted subscription service formerly known as Seller's Assistant), there was no shortage of vendors offering independent alternatives.

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