Cornerstone Launches Auction Web Site
"We had heard [auction sites are] a good way to do it, and we figured we'd give it a whirl," said Mark Fasold, executive vice president at Cornerstone Brands, Portland, ME, Whispering Pines' parent company.
The site features products offered in past catalogs, overstocks, styles with limited sizes and one-of-a-kind items.
The company mailed postcards to promote the site, Auctions.whisperingpinescatalog.com. Fasold declined to reveal how many postcards the company sent.
Cornerstone hopes to offer auction sites for other titles, including Ballard Designs, "once we learn how to do it," Fasold said.
"In concept, [offering an auction] makes a lot of sense," said Alan Alper, an analyst at Gomez Advisors, Lincoln, MA. "I'm sure these catalog companies try to buy judiciously and not find themselves in overstock positions ... [but] there are certain times of the year where they sometimes overbuy just to make sure they don't get caught short."
Bill Dean, president of W.A. Dean & Associates, San Francisco, said an auction may help catalogers liquidate merchandise by taking the guesswork out of pricing sale items. But, he said, it appears to be a project that would require a great deal of maintenance.
"An auction does have that advantage of giving you the answer [of what customers will pay for a certain product], but then the problem is, what if everybody comes on and says $2?" Dean said. "Then you've got to make the decision of, do you want to do it?"
Kathryn Grant, senior manager of Internet strategy at The Sharper Image, San Francisco, agreed that online auctions are a "great way of moving inventory" but require upkeep.
The Sharper Image's Web site, www.sharperimage.com, has featured an auction since March 1999. The auction site offers one-of-a-kind, new, repackaged and refurbished products. The new product category is the largest, and those products sell for almost retail value, Grant said.
"It is a balancing act of managing the brand new items vs. the repackaged and the refurbished items, because [the repackaged and refurbished items] generally bring in a little less than the retail value," Grant said. She added that the Sharper Image's merchandising staff manages the site and determines the minimum bid in order to cover the company's costs.
The Sharper Image designed its online auction as a fun way for technologically savvy customers to shop online. The marketer had to offer more than just its slow-moving merchandise so customers wouldn't get bored.
The Sharper Image's decision to launch an auction Web site came from the gadget and electronic company's retail division. The company ran weekly in-store auctions several years ago but no longer offers them.
"We don't do them anymore, because it is difficult to implement in a live store location, and you need to have a licensed auctioneer to do that," Grant said.
The Sharper Image uses Opensight software from Siebel Systems, San Mateo, CA, to manage its auction, which is promoted in its catalog.
Fine jewelry and home decor cataloger Ross-Simons, Cranston, RI, also offers an auction online.
Earlier this month, e-commerce co-op site Prefer.com announced a partnership with online auction service provider Bidland.com, which will provide auction services across Prefer's database of catalogs, including J.Jill and The Wine Enthusiast.