Auction Upstart Upends eBay in Germany

Ricardo.de, a small challenger for Germany’s online auction business, has parlayed a live auctioneer and other services into a formidable 400,000 person-strong subscriber base.

According to Ricardo.de, the site has now surpassed eBay Germany as the most popular online auction site in that country. The local start-up is actually competing with several well known U.S. Internet brands, which are all vying for a slice of the consumer spending in one of Europe’s wealthiest countries.

In addition to eBay Germany, the auction market includes Yahoo! Germany, which launched its own auction site in July primarily to try to cut into eBay’s share of the market, and European online auctioneer QXL.com PLC, which teamed with AOL Germany in November to beef up its marketability.

Ricardo.de offers a variety of products and services for auction each day on a live channel, plus thousands of products on private and anonymous bidding channels.

Chess Match

The company says that its rapid growth is providing the impetus to launch another auction service in January for businesses. The site, dubbed RicardoBiz.com, will offer trading in all goods and services with flexible prices. In addition, the site will provide general and category specific discussion forums and trade news for each business sector, through partnerships with other online news and information companies.

Ricardo.de made its announcement on the heels of eBay’s move into business-to-business auctions in the fall and a more recent decision to start selling entire companies on its eBay Germany site. eBay began gradually adding small firms to its offerings after a recent machinery auction led to the sale of a small construction company.

eBay Germany has operated a business-to-business auction area since November, focusing on commercial goods and services ranging from printing services to delivery trucks.

“RicardoBiz.com will combine commerce, content and community to establish a successful trading floor for the business community of the next millennium,” site manager Jan-Henrik Andersson said. “Our product range and services will reach out far beyond Internet auctions.”

Accentuate the Differences

The company hopes to differentiate itself again from eBay by featuring a wider variety of business-related goods and services, such as energy service and real estate, ball bearings and overstocks, storage capacity and personnel. The site’s matchmaking services will be limited, however, with the buyer and seller agreeing on payment and delivery methods between themselves after the auction is complete.

As with its consumer auction site, the live auctioneer will make another key difference, RicardoBiz.com predicts. Participants offering their products at six trading locations will be able to “profit from the advantages of the dynamic price-determining mechanisms in contrast to the fixed price system, which dominates the market at the moment,” the company said.

In the first quarter, RicardoBiz.com plans to add more price-determining mechanisms, such as invitations to tender, Dutch auctions, English auctions, reverse auctions, barter transactions, scouting functions and pooling of multiple buyers to get volume discounts.