Beanie Baby Walkout: Rebel Sellers Yank Items From eBay
By Daniel Roth

(FORTUNE Magazine) – The setting is idyllic: a 100-acre farm, green with vegetation and just a short walk from beautiful Cayuga Lake in upstate New York. Yet the talk from the farm's owner is anything but: "Power corrupts, and absolute power corrupts absolutely," declares Rosalinda Baldwin, a short woman with long brown hair, blue eyes, and 2,000 pineapple-adorned gimcracks. "You can't put that much power in the hands of one company and not expect them to tread on your toes. We must diversify." The source of her anger--and her pineapple earrings, cookie jars, and sponges--is eBay. (Baldwin's an active seller and buyer.) And the solution to her problem is something she has dubbed the Million Auction March.

By Sept. 1, Baldwin and a group of influential eBay sellers hope to have rerouted one million auctions from eBay onto any of the roughly 500 other online auction sites, ranging from Yahoo Auctions to JustBeads.com. Their goal is to create something the online auction industry has lacked since its inception: real competition. When eBay CEO Pierre Omidyar took his site live on Labor Day 1995, sellers quickly attracted buyers and vice versa, giving eBay a seemingly insurmountable lead over future sites. Although its growth has slowed, eBay still hosts 4.5 million auctions a day. Its next biggest competitor, Yahoo, has more than two million, and Amazon.com is estimated to offer a piddling 770,000.

With enemies like that, who needs friends? Or so say eBay's earliest allies--the smalltime sellers, who claim that as eBay grew it stopped paying attention to them. Indeed, relations have soured since eBay's 1998 IPO. The latest dispute: banner ads. When eBay started selling space to advertisers this spring, it pitted smalltime sellers against genuine corporations. Search for Ken Griffey Jr. memorabilia on eBay, and up pops an ad leading to Griffey's official site, where fans can buy everything from Griffey Beanie Baby rip-offs to Junior-signed jerseys. Sellers get paranoid when they see that.

"I sure would hate to be selling something Ken Griffey-related in competition with Ken Griffey," says Bobby Beeman, an antique-toy dealer who auctions 300 to 400 items a month and maintains the Million Auction March Website. "We need to expand outward in case eBay does something that wipes out one of the categories we depend on."

But for all their talk, sellers--many of whom make their living from the site--can't bolt from eBay if their buyers don't. So marchers are e-mailing past clients with notices of auctions at other sites. Beeman is giving his winning bidders coupons for free shipping or discounts on future purchases if they buy from one of his non-eBay auctions. Gold's Auction is offering free listings in conjunction with the march. And the organizers have secured the backing of the Online Auction Users Association, the largest trade group of auction buyers and sellers. "We want our level playing field back," says Baldwin, who runs a watchdog group called the Auction Guild.

eBay is unmoved. "We realize that from time to time new services create conflict," says a spokesman. "Our attempt is to balance the best interests of the buyers and the sellers." And the investors: In the past six months eBay has purchased fixed-price exchange Half.com, forged an alliance with used-car site AutoTrader.com, and moved into the business-to-business market. It's these new revenue streams that analysts are now focused on. Wall Street has already marched on.