Vertical auctions vs. EBay

Jim Whitehead (
Fri, 21 May 1999 15:38:52 -0700

"Among other things, closure rates on the vertical auction sites were
higher, meaning that items were bought 56 percent of the time there as
opposed to 30 percent on eBay."

"While winning bids for identical items were similar for low-cost goods,
vertical sites produced a better return for sellers as the value of the
items rose. Among items selling for more than $100, for instance, the final
amount paid at the vertical auctions tended to be double what was paid on

Neat! The conventional wisdom would say that the larger number of people
hitting EBay vs. a specialized site would result in greater hits/item, reach
more interested customers, result in more bids, and hence higher prices.
But this is not the case.

The breakdown in logic seems to be that greater hits/item doesn't
necessarily result in reaching more interested customers. The results from
this study indicate that having smaller hits/item from people who are
inherently more interested is far better for getting top dollar.

An interesting strategy would be to "poach" sucessful EBay auction areas,
providing a competitive service which leverages superior domain knowledge
whenever EBay identifies a lucrative auction domain.

- Jim