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Amazon auctions more like a mall

Shoppers looking for extraordinary items may just find the ordinary on Amazon.com's auction site, and could pay too much for goods if they don't do some research.

3 min read
Shoppers looking for one-of-a-kind items on Amazon auctions are more likely to find retail goods available elsewhere, in contrast to the free-wheeling flea market atmosphere of competing sites like eBay and AuctionUniverse.

In a letter to Amazon customers on the auction site, CEO Jeff Bezos emphasized the creation of a "community" of 8 million shoppers whom he welcomed to sell anything through Amazon's site.

But for now, Amazon.com's auction site is more akin to a mall of merchandisers than Bezos's community of shoppers. This is, in part, because Amazon is looking to create an auction site that presents a safe, familiar environment for its retail customers.

More significantly, however, most of the "tens of thousands" of products listed on the site when it launched were offered by more than 100 charter merchants, eager to expand into a new distribution channel.

Unlike other auction sites that merely permit merchants to sell their wares, Amazon has actively courted merchant auctioneers rather than focus on person-to-person sales. That differentiates its auction site from eBay, which grew out of founder Pierre Omidyar's search for a place to buy and sell the Pez dispensers his girlfriend collected.

According to Amazon spokesman Paul Capelli, the company used charter merchants to jump-start its auctions, and he expects their presence to become less prominent as individuals discover the site and add their own auctions.

Amazon hand-picked the merchants for the high-quality, interesting, and unique goods they offered, Capelli said. But an informal survey of the site revealed that not all the goods offered by charter merchants are necessarily unique, and what may seem like a great deal on a one-of-a-kind item could possibly be a premium price on a product.

That's because many merchants on Amazon's site, as well as other online auctions, are selling items that they also sell through their own Web sites. But the Amazon auctions don't contain links to those merchant sites. In at least one merchant auction, buyers run the risk of paying more for items than they would by going directly to the seller's site.

Among Amazon's charter merchants are Insight, a direct marketer of computers and software, Gear.com, which sells sporting goods and Cameraworld.com, which sells photographic equipment. All three merchants also sell directly from their own e-commerce Web sites.

Cameraworld.com chief operating officer Walt Mulvey said the company offers some 400 items through Amazon's auctions, including cameras and tripods. The starting price for auction items is under the retail price listed on the Cameraworld.com site.

The winning bid for an item could potentially be higher than the retail price, Mulvey said, but in such cases, Cameraworld.com will charge the winner the retail price for the item. He and Cameraworld.com CEO Alessandro Mina are worried they'll upset buyers by forcing them to pay the higher bid price.

"We're assuming that many of these people will go to our Web site," Mulvey said.

But not every merchant has made that promise, and Cameraworld.com's promise is not a written guarantee.

Insight spokeswoman Susan Heywood said it's possible that a customer could pay more for an Insight product on Amazon.com Auctions than through the company's Web site. Insight offers some 20 items on Amazon, most of them new items.

Heywood said Insight doesn't intend to auction its goods above retail, adding that on Insight's own auction site bids usually top out near the retail price.

"What we find is that a lot of the buyers will do research on this in advance," Heywood said.

Amazon's Capelli said the bidding process is part of the fun of participating in an auction. Consumers are smart enough to figure out how much an item is really worth, he said.

But because Amazon doesn't provide links from its site to charter merchants' Web sites, users must take the extra step of searching for it on their own.

Digital commerce analyst Fiona Swerdlow of Jupiter Communications said she isn't sure that consumers will do that much research when buying an item.

"Consumers should be smart," Swerdlow said. "They should do their homework, but if they end up paying more, that's the auction world."