eHobbies, a Santa Monica, Calif.-based company, launched an auction site where model builders, stamp collectors and other hobby aficionados can buy or sell products.
eHobbies is the latest among a growing number of companies that are looking to break into the auction market, currently dominated by eBay. Research firm Gomez Advisors estimates the company earns about 70 percent of all online auction revenues.
Yet those staggering numbers aren't discouraging other firms from jumping in with their own bids. This month DesignerOutlet.com and Playboy announced plans to join the Fairmarket auction network. Last month, the Disney-backed
Keenan Vision analyst Vernon Keenan said that companies entering the auction market are facing long odds.
"Just about anybody getting into the small collectibles market has to be worried about eBay," Keenan said. "The smaller auctions sites need to look toward sharing their content with megaportals. If they can get distribution and marketing, then they have a chance to be successful in a niche market."
eBay executives say they aren't worried about increased competition in the auction space, saying it only serves to "validate its business plan."
"We know we have lots of competitors, and we have to earn the loyalty of our customers every single day," eBay spokesman Kevin Pursglove said. "We're confident in our business."
Keenan projects that the collectible market will generate $3.5 billion in revenue this year and will grow to $23.1 billion by 2004.
To earn a share of that money, many smaller companies are looking to cater to highly defined markets, according to eHobbies chief executive Brad Sobel.
"Hobbyists love to buy and trade among themselves," Sobel said. "We are going to give them a place to do that. We want to get above the noise of being everything to everybody."
Auction sales are expected to generate $52 billion in revenue by 2002, according to Forrester Research. Keeping this in mind, Soble said his site is targeted at more than 100 million hobbyists worldwide.
"Obviously many hobbyists are trading on eBay but some smaller auction sites are seeing some very high returns," Sobel said. "Our goal is to provide the ultimate online destination for hobbyists."