*NEWS*SELL INVENTORIES ON EBAY
*NEWS*SELL INVENTORIES ON EBAY
2003-12-03 at 9:46:00 am #8067
Accenture helps companies sell inventories on eBay
NEW YORK, Dec 1 (Reuters) – Technology consultant Accenture hopes to profit from the explosive growth of online shopping by helping big manufacturers like Sony and Hewlett-Packard offload excess inventory on Internet auction site eBay (NasdaqNM: EBAY – News)
The site, which is better known as a place where people auction off unwanted items sitting in their garage, is now selling high volumes of companies’ spare products — everything from airplane parts to faucets.
Accenture Ltd. (NYSE: ACN – News) has signed up 60 customers in the past year, including big names such as Hewlett-Packard Co (NYSE: HPQ – News), Sony Corp. (Tokyo:6758.T – News), Texas Instruments Inc. (NYSE: TXN – News) and Fujitsu Ltd. (Tokyo:6702.T – News)
The demand is huge — U.S. businesses process roughly $60 billion a year in excess inventory, according to Accenture. The company, formerly Anderson Consulting, charges on average 10 percent of transaction fees.
“Some significant portion of the $60 billion could find its way to eBay,” said Robin Abrams, president of Connection to eBay, a unit of Accenture. “EBay has been able to attract a pretty compelling number of merchants of all sizes to fulfill that voracious appetite of 85 million registered users.”
Accenture’s business took off quickly thanks to its connections to Fortune 500 companies, rolling right over smaller rivals such as ChannelAdvisor Corp. and Auctionworks.
The eBay business is peanuts compared with Accenture’s overall annual sales of $10 billion, but is growing quickly.
“This is going to be an important area in the future,” said Richard Davis, an analyst at Needham & Co.
Offloading excess inventory on eBay is more complicated than selling the odd trinket. That’s why technology giant HP needs Accenture’s help to sell refurbished computers, printers, handhelds and low-end servers on the auction site.
“It is very different selling a hundred items from just one,” said John Jones, an analyst at SoundView Technology, adding companies have been outsourcing more than ever before.
The eBay service has helped Accenture nearly double sales of what it categorizes as business process operations in the past fiscal year.
Abrams said it is “not unusual” for merchants to get returns 22 percent higher than they would from liquidators.
Textile company Sure Fit Inc. has sold more than a $1 million in furniture slipcovers on eBay since spring. With Accenture’s pricing strategy, it managed to command prices that overall exceed its traditional liquidation channels.
“Working with Connection to eBay enabled us to rapidly launch our new eBay channel, tap into a large new buyer base, scale quickly, and achieve maximum returns,” Sure Fit’s director of sales David Spain said in a release.
Some companies also want to acquire new customers by selling on eBay. Fujitsu Computer Products of America Inc. said sales of its refurbished scanners on eBay have increased seven-fold since March, and 90 percent of the small- and medium-sized businesses buying are new customers.
Such business-to-business sales have helped eBay to grow from a flea market for mom-and-pop businesses to an important distribution channel for big companies, especially when it comes to hard-to-sell excess inventories.
Before, companies had only limited choices in dealing with obsolete inventories. They could sell them to liquidators at a deep discount, donate them, or simply junk them. Selling on eBay gives them an opportunity to boost profits immediately.
So far, business-to-business sales account for about 5 percent of eBay’s total, but spokesman Chris Donlay said many large companies are coming over to the site, and that many of those on the site are “still in experimentation mode” because they’re not set up to sell one-on-one to consumers.
“That’s where companies like Accenture come in,” he said.