You might call it the ultimate full-circle moment: Two guys fed up with paying eBay listing fees are now selling their own alternative to the online auction business — on eBay.
"We've taken it a long way and now it's just time to move on to a new project," said Peter Michaud, who created the site MightyBids.com in 2003 with Jeff Ramaglia.
Unlike eBay Inc., which charges sellers for listing and selling an item, Montreal-based MightyBids charges only when items sell, Michaud said.
Michaud said he came up with the idea for the site four years ago while making a living selling art on eBay. He would try to sell 50 to 100 items a month on the site and was incurring fees of about $1,200 a month, he said, even when only a few of his items actually sold.
EBay will credit users for unsold items by refunding a listing fee if the item is re-listed on the site, but there is still a charge for the second listing.
So why list on the site whose practices drove him away in the first place?
"It's marketing. It's getting a lot of attention and puts them to the test," he said.
MightyBids.com went up for auction on Thursday. As of Monday evening, 44 bids drove the purchase price of the business to $25,100 — lower than the reserve price, which Michaud won't divulge. The reserve is the minimum asking price, below which a seller is not obligated to complete the transaction.
Along with ownership of a site that Michaud said has over 100,000 registered users in the U.S., Canada and Europe, the buyer will gain the site's code and a variety of MightyBids-related domain names, according to MightyBids' eBay listing.
MightyBids isn't the first business to auction itself off on eBay. In September, domain name registrar Tucows Inc. bought online calendar company Kiko through the site for $258,100.
"There are businesses that are regularly sold on our site," eBay spokeswoman Nichola Sharpe said.
When asked if eBay might be interested in buying MightyBids, Sharpe said the company does not comment on such issues.
MightyBids is just one of many online auction sites that have arisen from discontent with eBay fees, said Rosalinda Baldwin, chief executive of The Auction Guild watchdog group.
Without looking at MightyBids' site but taking into account its user base, she estimated the site wasn't worth much more than the cost of registering its Internet address, or around $9.
"There's hundreds of thousands of them," she said of eBay alternatives. "I could start one up in five minutes."
Indeed, there are many options for those who don't want to trade with the auction giant, ranging from niche sites like music-focused Gemm.com to the more general and publicly traded uBid.com.
Michaud wouldn't say if MightyBids has been profitable, but it has been his full-time job for the past four years, he said. He maintains the company is being sold so that he and his partner can start a new business. He and Ramaglia had a staff of 22 employees, he said, but they were let go in anticipation of the sale.
They have contracted a few of their former programmers to help keep the site running, and have taken all auctions down to retool the site, he said. Michaud expects auctions to resume in a week or two — around the time the auction ends on July 1.
So far, plenty of people have contacted them expressing interest about the sale, he said.
Has eBay gotten in touch?
"Not yet," Michaud said.