Survey Finds Contentment at eBay's Core

A research report from Piper Jaffray based on a survey by the firm of 50 of eBay's(EBAY Quote) biggest sellers at last weekend's "eBay Live" jamboree shows most of the online marketplace's core customers are in fact content with the service, if concerned about a fast-evolving e-commerce market.

In contrast to a number of recent reports that eBay's customers are ready to fly the coop and strike out on their own, the Piper survey found eBay sellers having at best mixed luck in selling through non-eBay venues. And many sellers were now less concerned about eBay's fees than online fraud and competition from other sellers on the Net.

"Overall, the vast majority of PowerSellers were still content with eBay, with many utilizing eBay as their primary source of income," said the report, authored by Piper's Internet analyst Safa Rashtchy. Piper, which rates eBay market perform, has no underwriting relationship with the e-tailer.

PowerSellers, or sellers on eBay's marketplace with both high product turnover and high ratings from buyers, found illiquid markets on rival channels such as Yahoo!(YHOO Quote) Auctions and Overstock.com(OSTK Quote). "While many of the sellers we talked to suggested they would like to sell on a secondary site, most have not found alternative outlets to be worth their time, and only a few have sold successfully through their own sites," Rashtchy said.

Last Thursday, eBay announced two programs aimed at making business easier for its PowerSellers: a ProStores feature that allows sellers to create an online storefront independent of, but linking to, the eBay marketplace; and Reseller Marketplace, which allows sellers to buy refurbished, liquidated and excess inventory directly from manufacturers and distributors. Both programs seemed to be greeted positively by eBay's customers.

But eBay still faces several challenges in creating a friendly and profitable channel for its customers online, especially as sellers move away from used or unique items and toward goods available elsewhere on the Internet. One is that eBay sellers are becoming less visible as Google's(GOOG Quote) and Yahoo!'s targeted ads in search engines and on content sites connect buyers with other retail channels.