E-Commerce Stock Watch: Is Cybershop Competing With Itself?

Discount retailer Cybershop (Nasdaq:CYSP) announced today that it has been chosen as a charter merchant for Amazon.com’s new auction house. The news has helped carry shares of Cybershop nearly nine percent higher in early trading, with the stock climbing up 1-1/4 to 15-3/4.

It’s been an extremely good week for Cybershop, which launched its own auction service last Thursday. Shares of the stock have been up significantly since then. Cybershop stock was trading at less than 11 last Wednesday.

But let’s not get overly excited. Cybershop may be cannibalizing its own business by running auctions on Amazon.com. After all, it’s very likely that Cybershop’s auctions on its own site result in higher profit margins than Cybershop’s auctions on Amazon.com. This latest move may mean more awareness, but doesn’t it seem like Cybershop is now competing with itself?

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