2005: New products, programs keep eBay sales clicking
Wednesday, October 5, 2011
At a time when much of the golf retailing sector continues to struggle and retailers often talk of fighting for market share, business is booming on eBay, the giant online auction site launched a decade ago.
Golf is the largest sports category on the site, with sales approximately twice the size of cycling, which is the second-largest category, according to Bob Holden, eBay’s senior category manager for sporting goods. And while eBay is most often associated with used products, Holden says new merchandise now accounts for nearly half of eBay’s equipment sales.
Holden declined to put a dollar figure on eBay’s golf sales, but annual transactions on the site are believed to exceed $200 million. He said that sales grew at slightly less than 20 percent in 2004 and have maintained a similar pace this year.
“What that tells me is that more and more golfers are discovering eBay as another channel when considering making golf purchases,” Holden says. “And hopefully eBay is helping the industry in giving new players a low-cost way of getting into the game.”
A major reason for growth in the category, he adds, is that golf products fit neatly into the eBay formula. They retain their value, they’re easy to ship, and there is no shortage of consumers looking for upgrades that might help improve their scores.
And eBay has benefited as manufacturers have expedited their product cycles in recent years and consumers increasingly have sought to turn their old equipment into cash.
“EBay fell into the golf sweet spot in that golf was so inefficient,” says Leigh Bader, president of 3Balls.com, a large eBay seller. “The sustainable, scalable growth in (eBay’s golf sales) is going to come from their sweet spot – when a product is introduced and when it’s closed out.”
But as eBay has emerged as one of the biggest success stories of the tech boom, it’s become clear that it serves as more than just a marketplace for buyers and sellers.
Dallas Golf, one of the earliest and largest eBay golf stores, now operates only two retail locations in the Dallas suburbs, having closed two others. But it’s business now extends far beyond the city.
“EBay is as powerful a marketing tool as a sales tool,” says Kurt Ratliff of Dallas Golf. “It’s made us a national company when we’re not.”
Because eBay is still only 10 years old and there is increased competition from a growing number of sellers, Ratliff says “you’ve got to reinvent this every day.”
One example: Dallas Golf developed Trade-In Enabled Listings, a program that generates trade-ins. That technology, which prompts users to submit trade-ins when they’re making purchases, now is available to sellers across the eBay platform.
Earlier this year, eBay also began offering pre-filled item information and product photos, making it simpler for individuals to sell their own equipment. Holden says the more professional presentation has increased buyers’ confidence and driven a “meaningful” increase in the sales conversion rate.
And Bader was instrumental in pulling together the PGA Value Guide – a joint venture of eBay, 3Balls, the PGA of America and PGA.com – that provides continually updated price listings on used golf clubs based on eBay’s sales data. In August alone, Holden says, there were 85,000 unique visitors to the Value Guide site, and the complementary Trade-In Network of pro shops that accepts trades now totals more than 3,000.
Holden foresees no slowdown in the growth of eBay’s golf business.
“I honestly feel like we’re just getting started,” Holden says.
He says the business is “way underpenetrated” in apparel and footwear when compared to softgood sales across other eBay categories. And the growth of golf real estate appears to be driving demand for motorized carts, already the third-biggest golf category following clubs and balls.
Holden also foresees big opportunities in largely untapped categories such as tee times and golf lessons – highly perishable products that could provide additional revenue to PGA professionals and golf courses, and discounts to consumers.
Even more ambitiously, he’d like to find a way to partner with pro shops to sell custom-fit clubs.
“It’s just a matter of stimulating trial,” Holden says. “If there’s anything I’ve learned, it’s that I should never assume what won’t sell.”