Best Buy Launches Marketplace to Amp up Web Sales of 3rd Party Products

Best Buy (NYSE:BBY) has launched a third party market place which would enable it to offer products online from other sellers. Third-party sellers including Buy.com, Mambate, SF Planet, ANT Online, BeachAudio.com and Wayfair have signed up for the platform. Best Buy competes with general retailers like Wal-Mart (NYSE:WMT) and Costco (NASDAQ:COST) as well as other specialty retailers like Radio Shack (NYSE:RSH) and GameStop (NYSE:GME). The online platform competes against players like Amazon (NASDAQ:AMZN) and eBay (NASDAQ:EBAY).

Our price estimate for Best Buy’s stock stands near $40, implying a premium to the market price.

Best Buy Marketplace

The platform would provide a broader selection of products and brands on BestBuy.com. Competing firms like Wal-Mart and Sears Holdings already have a similar practice in place where in they allowed third party sellers to sell under their brand names in exchange for a cut of the proceeds.

Best Buy is trying hard to compete with online retailers like Amazon and eBay given the much wider wider product offerings on Amazon. According to comScore, Amazon.com was the sixth most visited website in the U.S. in July, with 97.1 million unique U.S. based visitors. Retailers like Wal-Mart and Target were also among the 50 most visited sites while Best Buy failed to make the list at all. ^[1] This is surely a step in the right direction but Best Buy clearly has some wood to chip before it starts taking share from e-commerce big boys like Amazon and eBay.

See our full analysis for Best Buy

1. See: Can Best Buy’s New ‘Market Place’ Poach Customers from Amazon?, Daily Finance [↩]