EBay's wholesale business is growing by leaps and bounds.

The subsite, which was launched in September 2002 as a place where companies could sell refurbished and end-of-life equipment, lists more than 50,000 products per day, up from about 11,000 when it started.

"EBay has evolved from the collectible to the practical," said Mike Rudolph, general manager of the computer and networking business at eBay, San Jose, Calif. "Now a large part of the site is business-to-consumer, and we're getting to the next phase where eBay grows a business-to-business initiative,targeting small businesses."

Computers and peripherals account for about 10 percent of eBay's wholesale listings, but that segment is growing as more solution providers buy and sell everything from computer mice to Unix servers, said Karl Wiley, senior category manager for eBay's wholesale business.

Wiley says about 10 percent of eBay's product listings are computer-related and that figure is growing.

"Buyers source product for a couple of reasons: It's a convenience opportunity or [the items are] hard to get," Wiley said, adding that buyers like being able to get good prices on low-volume orders.

Most of what vendors sell is end-of-life product. While that strategy initially met with some grumbling from channel players who feared auction sales would undercut their business, the furor has long since died down, and eBay is now frequented by solution providers that buy and sell products no longer available through distribution, Rudolph said.

"These [vendors] still need to manage channel relationships," he said. "They use eBay as a complementary channel, as part of the mix."

One solution provider, Dealtree, has become a frequent seller on eBay. "It's part of popular culture nowadays," said Paul Fletcher, president of Lake Forest, Calif.-based Dealtree and one-time executive at Merisel and Buy.com. "EBay has one of the best supply-chain management tools in the world. You buy anything you want from many different sources."

To sell open-box and refurbished product, Dealtree uses a proprietary application that integrates with eBay's API. The company also hosts several branded eBay storefronts to sell end-of-life equipment on behalf of manufacturers including Visioneer and Western Digital, Fletcher said.

"We're an outsourced solution provider," he said. "Our whole value-add is trying to get a higher return than traditional liquidation," which brings in 10 percent to 25 percent of the original price, Fletcher said. Dealtree can double or triple that percentage.

"I'd say that 98 percent of our customers don't want to dedicate resources to sell in this environment," Fletcher said. "They've determined that they're not ready to build a group with the number of people [they'd need] to be successful."

Dealtree also captures customer data that allows manufacturers to better track where their end-of-life inventory goes, Fletcher said. "Say Western Digital wants to broker 5,000 units to one person. They won't know where that product goes. It may come back to the channel," he said. "We can sell in smaller lots, and it's more of a controlled environment."

Dealtree's data reveals that 60 percent to 80 percent of its customers previously had not bought these manufacturers' products, Fletcher said.

"[With eBay] they get a higher liquidation return," he said. "They extend their brand, they own a brand-new customer, and they can control where end-of-life product goes."