eBay will offer third-party equipment financing through a new service on its site provided by Direct Capital Corporation. eBay used several such announcements Monday to trumpet its expansion into the business segment.
eBay said there are over 430,000 sellers on eBay.com selling full-time or using eBay as an additional channel for their existing businesses. Business buying on eBay increased to an estimated $2 billion in global gross merchandise sales in 2003, compared to $1 billion in 2002.
Collectibles has shrunk from 60% of Gross Merchandise Sales on the U.S. site in 1999 to an estimated 13% in 2003, according to eBay spokesperson Hani Durzy. Conversely, the remaining items, which eBay calls "practicals" like consumer goods and business equipment, grew from 40% in 1999 to 87% of eBay.com's Gross Merchandise Sales in 2003.
"Members of our community are evolving the way they utilize eBay, proving that our marketplace is just as relevant for small business use as it is for personal use," said Meg Whitman, president and CEO of eBay. "eBay has become an important destination for small businesses. Here, they can discover amazing business buying opportunities that can help them achieve success."
eBay announced that Direct Capital will offer "Equipment Financing for eBay," giving business buyers financing options for industrial equipment and information technology priced at $2,000 or higher. Additionally, Direct Capital provides inspection checks to ensure the quality of the products being sold. The equipment financing offering applies to business purchases across a broad range of eBay categories including computers, networking, telecom, construction, agriculture, metalworking, restaurant, commercial printing and medical equipment.
"Buyers can preserve working capital, leverage significant tax advantages, and bundle in shipping costs," said Jim Broom, CEO of Direct Capital Corp. "Sellers benefit from the reimbursement of eBay final value fees, attracting more buyers, and have the added assurance of selling to pre-approved bidders."
Use of the equipment financing program is streamlined for both sellers and buyers. Sellers simply enroll in the program and include a link to the financing service within their eBay item listings. Buyers complete an online application and, once approved, are able to purchase items on eBay up to a specified financing amount. Once a transaction is completed on eBay, Direct Capital will remit to the seller, via PayPal, the purchase price of the item, the eBay final value fee, and any associated PayPal fees. The Equipment Financing Program can be accessed directly at eBay Business (http://www.ebaybusiness.com).
eBay is also running a "Dream Big. Save Big." promotion. The promotion offers small businesses the chance to win a $50,000 grand-prize business shopping spree on eBay. The contest began February 19, 2004 and runs through April 15, 2004. (http://www.ebay.com/dreambigrules)
Reuters reported that eBay is also in negotiations with a major partner to provide small-business lines of credit. (eBay has an agreement with GE, see http://pages.ebay.com/businesscredit.) And in related news, Toyota Motor Sales U.S.A. Inc. signed a 1-year contract to become the exclusive automotive manufacturer sponsorship on eBay. As part of the agreement, Toyota will launch a dedicated destination at http://ebay.toyota.com . From this new page, Toyota will showcase its entire new vehicle line-up, links to items listings on eBay and special promotional offers. In addition, Toyota will donate vehicles for various charity auctions on eBay, with the first expected to begin at the end of March.
