eBay Could Become an Even Bigger eCommerce Power
Yesterday was one of those days-of-scrambling in the Multichannel Merchant newsroom. Harry & David filed Chapter 11 (we could have treated that one like a New York Times obit and written it up months in advance, but posted it when word of Chapter 11 hit), and that really wasn’t the big story.
Consumer publications are starting to open its eyes and understand the magnitude of eBay’s $2.4 million purchase of GSI Commerce. eBay sees the writing on the wall: the online auction space is not going to thrive forever, and there’s a lot of competition in the online marketplace space. With GSI Commerce’s platform, expertise and customer base, they can drive the ecommerce space instead of just being a participant.
On top of that, PayPal is eBay’s biggest moneymaker. It has outpaced the online marketplace in terms of growth and revenues. It can become even larger if it’s used as an add-on to the merchant sites currently run by GSI Commerce.
And here’s another thing: As it appears evident that states will collect sales tax on ecommerce purchases made by its residents, eBay already has that system in place. eBay was well ahead of the curve, telling merchants they must collect sales tax on what they sell. If that technology can be mashed into GSI Commerce’s, and merchants are told by state governments they must comply, then the value of doing business with GSI Commerce rises.
If that acquisition wasn’t a surprise, the fact they’re spinning off flash sales merchant Rue La La is. These flash sale, private sale, deal-of-the-day sites, whatever you want to call them, are the next-big-thing, if they aren’t already. Then again, the growth everyone seems to expect may not be there, and eBay can take advantage and sell that technology to the spinoff, which it will own a 30% interest in.
