Back in March, eBay offered a lifeline to the small town brick-and-mortar shops that have suffered as retail sales have shifted online. The company said it would target about 100 small businesses in towns like Akron, Ohio, and Lansing, Michigan, and teach them how to sell online via a year-long program dubbed Retail Revival.
"We felt that with the unique aspects of the eBay platform that we could help brick-and-mortar retailers join e-commerce, add it to their physical stores, and do it more economically," says eBay's Head of Global Impact and Giving Chris Libre.
It's a goodwill gesture toward America's Main Street businesses--and presumably a way for eBay to court them as customers for its online marketplace.
Regardless of the reasons, at a recent showcase in New York City for some of the incubator's pilot companies, enthusiasm for the program was high.
"Sales have gone up," reported Frank Miller III, co-founder along with Preston Clark of 7th Floor Clothing company based in Akron. Around 70 percent of 7th Floor's sales of its signature $35 frog hats now come through the company's new online store. He whipped out his smartphone to flash a picture of Lebron James wearing one: "Look!"
EBay's Turn to Feel the Pressure
Like many companies, eBay is feeling the weight of competitors. EBay's share of the U.S. e-commerce and online auctions market stands at just 0.8 percent, according to a 2018 report by IBISWorld. Amazon dominates with just over 36 percent. Additionally, eBay reported a stormy forecast for revenue growth in the second quarter of this year, making shareholders question eBay's ability to compete against stiff competition.
E-commerce-hosting platforms like Shopify and Squarespace, for instance, have already carved out substantial businesses by helping retailers set up their own online shops--and use social media to attract customers to them.
EBay is now playing catch-up to these new platforms, along with megastores Amazon and Walmart, both of which offer small businesses access to a vast swath of customers, says IBISWorld analyst Jonathan Hadad, who wrote the aforementioned report. Part of the issue is that eBay has an "image problem," he says. It's generally thought of as a marketplace where you buy used items, while Amazon is somewhere customers go to purchase new items. Courting smaller companies as customers--be they on or offline--is going to be key for eBay to stay relevant. In the past, eBay also has experimented with offering loans to small businesses.
Objects of Attention
Regardless of why eBay wants to help retailers figure out e-commerce, the business owners are grateful for the attention. Evan Delahanty, the Akron-based founder of fruit-snack company Peaceful Fruits, says interest in Akron's entrepreneurial scene is usually limited to the city's tech startups--overlooking small business owners that could establish significant traction. "What eBay is doing well with this program is saying to people, 'You are a local business, but we can make you into a national small business. We can expand your business through the eBay platform.'"
A large part of the program is working with advisors to design and market an eBay shop for the small business owners, which serves as a supplemental source of income and exposure for some, or a first stab at the world of e-commerce for others. Delahanty says this has been especially beneficial for a number of local business owners who never considered scaling their companies nationally.
For his part, Delahanty has had no problem stepping outside Akron. Peaceful Fruits already has a polished social media presence and saw a $150,000 sales boost from across the country after a brief "Shark Tank" appearance last February. For him, the Retail Revival program has offered other benefits: "It helps us access a new group of customers that wouldn't have found us otherwise," he says.
Though sales haven't ballooned as a result of the effort, Delahanty says the brand recognition and the administrative control he has been able to wield has been helpful. "If [customers] buy from Amazon, they're an Amazon customer, not a Peaceful Fruits customer," he explains. "I'd rather have 10 new customers on a platform where I get the data and I get more margins than 100 customers moving from my website to a website where I get none of that."
Ken Burns, the founder and CEO of Tiny Circuits, is similarly enthusiastic about the effort. He sees it as a way to allow his company, which makes build-it-yourself kits for quarter-sized electronics like mini arcades, tiny pianos, and bite-sized video game consoles, to stay put.
Tiny Circuits' 10-person staff designs and manufactures all of its products in-house, out of a factory in Akron. Though tempted to consider relocating his operation to one of the nation's tech and entrepreneurship hubs after pulling in between $500,000 and $750,000 in revenue last year, Burns remains bullish on staying in the Midwest. The reach of his online store has proven that Tiny Circuits can attract an audience outside of Akron without having to move.
"We wouldn't be able to [do] production in San Francisco and New York like we can here, and that would totally change our company," he says. "Manufacturing here is cheaper than overseas. We can have a big office space, equipment, and pay a good, livable wage."
Those kinds of businesses shouldn't go away, says eBay's Libre. "We've always had the purpose of helping create economic opportunity for people who can sell on the platform. That runs through everything we do."
Corrections and Amplifications: An earlier version of this article mischaracterized eBay's business model and its share of the U.S. e-commerce market. It also incorrectly described its Retail Revival program.