November 26, 2012

Online retailers held back some of their best promotions and biggest discounts until Cyber Monday, which helped spur sales, IBM's Henderson and ChannelAdvisor's Wingo said.

Amazon offered $30 off its 7 inch Kindle Fire tablet, which usually sells for $159. The deal was only available on Cyber Monday and was still available at 5:00 pm EST.

EBay promoted Cyber Monday deals on iPads, made by Apple Inc , and Nook devices from Barnes & Noble.

These types of discounts attract shoppers to Amazon and eBay's websites, where they may purchase other items too, Wingo explained.

'WII U' SELLS OUT

EBay has also benefited as some hot holiday items sold out this year at some retailers. When that happens, shoppers often turn to eBay, where third-party sellers are usually still offering the items at higher prices.

Nintendo Co Ltd said on Monday its new "Wii U" video game consoles sold out at retailers in the United States.

The devices were still available on ebay.com on Monday at 10 to 20 percent above the suggested retail price, according to Jesse Divnich, an analyst at video game research firm EEDAR.

MARGIN QUESTION

Despite strong sales data, analysts are concerned that heavy discounting may pressure retailers' profit margins, online and offline.

The average online order size on Cyber Monday was $130.30 as of 3:00 pm EST. That was down from almost $200 during the whole of Cyber Monday last year, according to IBM.

Online order sizes are shrinking as consumers buy more digital goods, such as e-books, music and video, which generally cost less. However, discounting is also pressuring order size and that could feed through to lower margins, Morningstar's Hottovy said.

EBay margins should be relatively well protected because the company charges a commission on sales by third-party merchants and retailers.

Amazon operates like this, but, unlike eBay, the company also has its own product inventory so it may be exposed to margin pressure, according to Colin Sebastian, analyst at R.W. Baird.

(Reporting By Alistair Barr and Malathi Nayak in San Francisco; Editing by Maureen Bavdek and Jim Marshall)

Copyright 2012 by Reuters. All rights reserved.

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