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FairMarket moving into online outlet centers

The auction-hosting company launches an online outlet-center service on certain Web sites that will feature discount items from companies such as Dell Computer and JC Penney.

    FairMarket is branching out from auction hosting to virtual outlet malls.

    The Woburn, Mass.-based company said Monday that it launched a new service to host online outlet centers on sites such as Excite@Home, Lycos.com and NBC Internet. The outlet areas feature discount and clearance items from companies such as Dell Computer, CompUSA and JC Penney.

    "The Web offers an efficient channel to sell discount and clearance goods," Eileen Rudden, chief executive of FairMarket, said in a statement. "Migrating these goods to the Web allows them to be sold at a higher yield and without the overhead costs associated with a traditional clearance or outlet store."

    FairMarket is only the latest online company to try its hand at selling clearance items. In December, Amazon.com opened its own outlet store, featuring overstocked and discontinued items from its site. The move followed an earlier effort to feature clearance items from other companies in Amazon's auctions area.

    Meanwhile, Overstock.com has found success buying inventory from failing dot-coms and selling it at a discount from the original retail prices. Other companies that have begun to offer outlet services include iSolve, TradeOut and RetailExchange.com.

    Outlet malls offer manufacturers and retailers a way to rid themselves of excess inventory and make some money in the process. The outlet centers are often big money makers for operators such as Overstock because they buy the merchandise at deep discounts and sell them at prices just below retail.

    The outlet centers offered on FairMarket partners such as Lycos and NBCi will offer goods at fixed price, as well as in auction and falling-price formats. Lycos, Excite@Home and NBCi are already members of FairMarket's auction network. FairMarket is in talks with some of its other partners to provide outlet centers, Rudden told CNET News.com.

    The clearance areas will allow merchants and manufacturers to separate their items from the person-to-person listings in FairMarket's auction network, Rudden said.

    "This is all now branded merchandise from known retailers who put their name on the line," she said.

    FairMarket launched its auction network in fall 1999 with partners such as Microsoft's MSN and Dell. Although members of the network share listings, the service has struggled to compete with eBay and Yahoo.

    Last week, FairMarket announced that it signed a deal with eBay to allow FairMarket partners to list items on eBay's site via FairMarket's software. Despite the collaboration with eBay, FairMarket will continue to operate its competing auction network.