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How Amazon and Google are taking eBay's Business
prostoalex writes "Wall Street Journal says many online sellers who started on eBay are now going solo, being helped out by 'name-your-own-price' Amazon Marketplace and Google's and Yahoo's advertising programs, which allow small businesses to direct their ads to search engine users interested in specific items. The article discusses several companies where online sellers, being disappointed with eBay's falling profit margins, increasing fees, disruptions coming from PayPal account freezes and high fraud rate, are leaving eBay. Many start with setting up their own sites, continuing to do business on eBay, but then switching to solo e-commerce entirely after looking at profit margins."
controls keyword spamming and curtails the megasellers
A.ca takes 15% off the top, but they give you a generous shipping allowance so it doesn't cut into your profit margins (and it's actually fair, so if you *buy* from a seller, that reasonable price stays reasonable b/c the seller can't jack up the price). Win-win for both buyer and seller. The kicker is that every time I've sold something with A.ca, it's taken at the longest a week before somebody's bought it.
eBay? Never again. I'm willing to pay 15% just so I never have to *think* about Paypal.
Disclaimer: I work for neither Amazon nor Google. I'm not getting paid for this. The reason I'm saying all this is because Amazon is the only company I've dealt with over the past few years that has made me feel like a human instead of a problem.
Condemnant quod non intellegunt.
Ebay's policies are also getting ridicilous lately, tried to sell my kidney that looked like it had the face of the messiah in it, but they didn't let me..
So people selling things are choosing ways that make them the most profit?
Bizzare.
air and light and time and space
EBay, with more than 147 million users world-wide
With this sort of penetration any impact will be neglible for quite a while. There are still a ton of people trying to emulate the largest person to person for sale site.
eBay increases their fees because they can. If they thought these other places were such a direct threat yet they wouldn't do so. There will be a time this combination will be a large threat, but not yet.
Quality Hosting e3 Servers
network. I know other outlets aren't immune to frauds, but ebay is fucking rediculous. Whenever I am looking for anything substantial(for instance iBook, xbox etc) I have to sort by highest price first. Why? Because an overwhelming majority of the auctions are for "Information on how to get a free iBook!" or "iBook for 40 dollars". Ebay doesn't have to legally police it's network for those types of fraud, but I think their lax policies are going to harm them.
Not to mention the huge number of grey market items on eBay. I don't want to buy anime off of there because a majority of the DVDs are Chinese bootlegs. I would rather download them than buy the bootlegs....
Monstar L
The problem is this... all 3 of these aggregators (Ebay, Yahoo, and Amazon) all focus solely on price. Anybody who knows anything about business knows that competing on price is a very, very bad idea. It's almost always a losing battle. On top of that, the fees that these sites charge for selling are outrageous. We've decided to use *none* of them, and instead sell on our own. We get to keep our profit margins, and we get to offer real information to our buyers. We may not be the cheapest to the nickel, but honestly, that's not the kind of business we want. People who are pinching pennies are not the kind of customers you want because there's 0% loyalty... and that's what these agrregators strive for... making the sellers relatively anonymous, and focusing *only* on price. Amazon, eBay, and Yahoo will always be good for small sellers that don't have the means to set up a web site, credit card processing, etc, but once you can do all of that, it makes no sense to work with these big guys, where you'll just be a number in a crowd.
I don't respond to AC's.
I would be interested in what percentage of ebay auctions are from full-time sellers. It seems that these folks probably drive a sizable percentage of Ebay's revenue. Losing them could hurt the bottom line of the company very badly.
Amazon and Google still have a ways to go to become all that popular with full time sellers. There are a ton of guides for becoming a full time Ebay seller. But I find very few for Amazon and Google.
EBay was originally set up to allow individuals to sell merchandise to other individuals. That's why the feedback system was so important. Before PayPal and BidPay you had to use personal check or money order. Do you buy from a seller business with a feedback score of 65322 over one with 4352? When people had feedback 100 it mattered.
People started selling so much they started businesses. Then Ebay started jacking up the fees because they saw businesses making money off their website. Ebay was supposed to be for used merchandise. Now everytime I do a search for used merchandise I can barely find any because I have to wade through businesses that post 20 ads a day because they have 500 units in stock. Ebay just isn't made for that.
The moral of the story is there is a progression that goes from being an individual seller to a company that sells on ebay. If you continue to grow...it just makes sense to get off ebay.
You have been outbid.
I haven't had a problem with them, but see http://www.paypalsucks.com/.
Mea navis aericumbens anguillis abundat
Good.
I was a big fan of ebay back in the day. I still have an account that I use on very rare occasion. But today ebay seems to be nothing more than a portal for people who don't want / can't afford to setup physical shop. Ebay lost is greatest quality, IMO, a while back: the personal experience.
The last few things I sold a couple of months ago were random shirts from indie bands. Of the five people I contacted after winning, none of them ever replied to my emails. One of them left me negative feedback because she felt the shirt was in poor condition. I would've been glad to refund her the money and let her keep the shirt if she had contacted me, but apparently talking to another human (even by email) is a bit too much for ebayers these days.
My brother started 5 years ago selling jewelry on his website and eBay. It was tough to get any traction on his website, selling inexpensive silver jewelry, and he had a lot more success on eBay. The website was, at best 10% of his business. But about 3 months ago we started an advertising campaign using Google's Adwords program. After a slow start, sales have started to take off thanks to a redesigned landing page that better featured the great deals he has for wholesale silver jewelry. [Ya, that's a plug... is that so wrong?] We've doubled the ad budget just this week and if the trend keeps up for a few more weeks, he might be able to get 50% of his business off eBay.
The content network is really what makes it work. More than half of hits come from the content network, and more than half the sales. The click-through rates are about the same, which surprised me quite a bit.
So, without RTFA, I can support the WSJ's premise. Google does threaten eBay-- it allows small sellers to get their own customer base independent of eBay. eBay may not see a drop in sales, but long-term I think this hurts their growth.
It's true that Amazon takes 15% of your selling price. But did you realize that they also make money on shipping?
The amount they reimburse sellers is less than they charge buyers for shipping.
Sneaky.
Letter
With the talent behind Google, and the online prescence of Amazon, there is no doubt they can eventually overtake Ebay as the popular option for the masses. Going to an online store to purchase or sell items, require more than simply turning on a PC running Windows. The market is already somewhat ahead of the game in their knowledge and willingness to try something new. As such, they are that much more open to new options, should they be saturated with those options when it comes to marketing.
"A war over religion is like fighting over who has the best imaginary friend."
eBay and Paypal rank way up there as the most evil companies on the net. I have a friend who sells via eBay, and from what he's been telling me, eBay has been making it harder and harder to get refunds on failed auctions all the while increasing their fees.
As for Paypal, it's practically a crook's paradise (eBay is too actually). They force you to enter in your checking information if you wish to perform any transactions over a few bucks (forget the exact $). Once you've done this you are completely at their mercy to screw you over however they'd like.
With credit cards, you always have the option of a chargeback. Once you have linked your banking info to Paypal, good luck! Now they get all the say as to when/if they will give you credit back if something goes wrong. If a seller sends you a box of bricks, screw you.
Here's a personal experience I've had with Paypal. A while back I posted an ad to sell some stuff. Someone bought them and paid via a "VERIFIED" Paypal account. The buyer came by my house and picked them up in person. Everything looked legit until Paypal reversed the transaction saying the "verified" account was stolen. I emailed Paypal and all I got was one runaround after another. In fact I started getting the same replies over and over again!
My problem is, either Paypal is an escrow or they are not. If they're not, they have no right to refund the money. If they are, they have an obligation to re-imburse me for my losses. However, they took the coward's way out, refunding the money to the user to avoid being sued and losing in court for failing to protect their user accounts, and screwing me in the process saying that only orders sent by mail are protected under their TOS.
I really hope eBay and Paypal die off in really horrible deaths.
eTrade SUCKS
of problem customers and scams. I'm all for competition. I was liquidating a motherboard on eBay that was an open box part obtained from an RMA. After the customer received the part and crammed half a dozen cards into it, he declared it broken. Which it might have been... and I told him how to file an RMA on that part. I also offered to refund part of his investment if he just wanted to return it to me outright.
Soon the story changed... the item wasn't was "as described"... I started getting explanations of and I quote, "Living in a trailer with a handicapped brother with a $10,000 plate in his head." I was going to need to send him $70 for the item to be returned...
Then he proceeded to file complaints with PayPal and try and get his funds frozen.
What merchant would ever let you buy a product, break it, and return it for more money than it is worth? And what crazy payment system allows you to raid a merchants bank account because you most likely zapped the product with your own hands?
A friend of mine was robbed of £400 after he made a PayPal payment to a seller for a PC. He never received the PC and PayPal took absolutely no interest in refunding the money.
The excuse PayPal gave? The seller didn't have enough credit in his PayPal account to refund the money - and has since been kicked off of Ebay.
Neither PayPal or Ebay care about you being fiddled of money, they take their percentage for basically doing nothing.
Gentoo Linux - another day, another USE flag.
They didn't mention that yahoo auctions just went completely free.. It's just ad supported now. I would be very happy if eBay had a little more competition in both the auction and payment sectors.
-- these are only opinions and they might not be mine.
... and that's the problem. I sold my motorbike on Ebay when I emigrated to the US last year, and was so disgusted with the service, I even wrote a journal entry about it.
Ebay doesn't care if the seller has problems as long as the percentage cut is in Ebay's bank account. They do little-to-nothing to make the seller's life easy, in fact it's a very customer-unfocused setup.
As long as Ebay keep their current modus operandi, I'll not be using them again, and they have to run out of sellers eventually...
Simon
Physicists get Hadrons!
An interesting project which would require a very large operation would be to start keeping track of every completed eBay auction. With such a database, you could search by keywords or some other query to figure out the historical value of items, the best time to sell them (graphing calculators in August when school starts), or to analyze other trends. This could be valuable both to buyers and sellers.
The current eBay robots.txt includes the text
# eBay may permit automated access to
# access certain eBay pages but soley for the limited purpose of
# including content in publicly available search engines.
So Google could get away with doing such indexing - which would be of very high value to many people, since eBay makes old auctions inaccessible after a certain period - at least under the current robots.txt.
I'm aware of the legal and technical problems that might arise. (Recall the 2000 Bidder's Edge lawsuit where an online auction aggregator was prevented by eBay from using their data.) You'd need a large company and a lot of machines with different IP addresses to quietly check every auction, and I can think of at least twelve different ways such a database of prices, bids, times, durations, titles, and descriptions could be important.
So why hasn't anyone done it?
We recently had heard in the office over one of the Yellow Machine that's made by Anthology Solutions.
The amount of people falling victim to phishing on eBay is frightening. Users with perfect feedback and years of eBay activity can be fooled by a single email asking to verify their account information. I've seen some strange auctions listed from what seemed to be honest and trustworthy people. However it was an account hijacked by a phisher. As the number of phishing victims rises, the feedback system will become obsolete. I hope amazon and google don't suffer a simliar fate.
Example:
1) Post something on their sites
2) Advertise the hell out of your own website on each post
3) Browsers become buyers and watch the shoppers from all of the above auction/sales sites come to you next time and buy direct
You can also ship more advertisements for your own website with catchy phrases like. Buy direct next time at [Your URL here] etc.
Generation Trance: What generation are you?
Have to agree.. just as a buyer I have found their customer support to be second to none. Any time I have had a problem they have fixed it instantly - even if they lose money as a result, for example by sending replacement products out (internationally) which they have done for me several times.
They are the only online retailer that I really trust.. they've earned it.
I rarely every find a "bargain" on eBay anymore; I've stopped looking at the site. I see allot of stuff selling for prices higher than retail. However, most things are priced at about 85-95% of new. Go search closed auctions for a Mac Mini, you'll really have to dig to find a used one that sold for less than 95% of what you'd pay from Apple.
Me? I'll bone up the extra $25 and buy a new one.
EBay's single biggest problem, in my eyes, is the fact that you still have to pay a considerable fee even if your item does not sell. For casual sellers at least, this makes the whole platform unattractive - other services, such as amazon, only charge you when you make a sale and leave your item up there pretty much indefinitely until you *do* sell it.
Of course, the downside is that you have to pay more; amazon.de, for example, charges both a percentage (15%, I think) *and* a flat fee, so if you have something that you want to sell for less than a handful of bucks, you might actually even lose money - the shipping fees they charge the buyer wouldn't even be enough to cover actual shipping to start with, and they're usually more than eaten up by the fees, too, so you may well end up with a net earning of only one buck for a book that cost the buyer eight or nine bucks, including shipping (it's happened to me). The bulk of the money is, ultimately, shared between amazon and the postal services.
That's one reason I really hope Google gets into auctions - there definitely needs to be some competition in this area so prices will go down. And I trust that Google has both the financial and the technological strength to pull this off - not to mention the "do no evil" philosophy which would make me trust them to not rip me off *too* much at least.
quidquid latine dictum sit altum videtur.
People think they can run an e-commerce shop and not do any technology or even integration. They can run the whole thing via ebay. The problem is is that there's a lot of margin getting eaten up by fees to service providers and the services aren't flexible. That, and anything that is really really easy to run is going to be subject to a lot of competition very soon and declining margins, like ebay drop shipping.
If you're on the internet you're a technology company. The same way that if you're a retail store you're to some extent in the storefront design, logistics, human resources and interior design business. At least in retail you can get into a franchise where someone has figured all this stuff out for you. With technology though there isn't a really good reason to franchise because there isn't the limited trade area issue.
Also, Amazon.com allows *no* cross selling by their merchants. Meaning, you can't in your item description, your email to the buyer, or anywhere else, suggest that the customer visit your site. So Amazon may be good for a merchant who doesn't care about cross-selling, or building a brand, but for anybody else, it's a dead-end that just leads to commodity selling. If we were to sell through Amazon, the buyer couldn't take advantage (or even be aware of) the massive amount of information we offer, our excellent customer service, or the fact that we ship everything the same day.
I don't respond to AC's.
That's the way Amazon is with *all* merchants now. The buyer essentially gets -zero- information about the seller, and the seller gets -zero- name recognition from Amazon. That, on top of Amazon's quite hefty fees, makes it a good place only if you don't have the expertise or the money to build your own web site.
I don't respond to AC's.
The eBay/PayPal fees have simply gotten outrageous.
Did anyone notice that immediately after eBay missed its numbers last quarter they jacked up the seller fees? Their customer reps claimed that one had nothing to do with the other and that fees were increased to provide us sellers with more advanced services. Uh huh.
I've stopped selling on eBay because they've been taking 15-20% of everything I sell.
Amazon, however, isn't very good to other businesses.
Somehow I'm not able to shed any tears for poor little Target and Toys R Us. I suspect that they are big boys who can take care of themselves when it comes to Amazon.
"The dinosaurs died because they didn't have a space program." - Niven
IMO Ebay has a high barrier to entry. To be successful at selling you must have a good track record, which is perfectly fine, but for those who need to sell 1 item or small items, forget about it. My example: purchased a webpad on Ebay, used it for ~2yrs. Then wanted a new one, but the only way to recover any cost was to sell the old one on Ebay. People emailed and said they couldn't afford the risk to buy from me since I had not sold anything so big. So I took a serious loss, but I had no choice if I really wanted it sold.
And on a more personal frustration, I abhor Paypal. I won't rehash all it's issues, but my basic question is if Ebay is owned by Paypal, why not make everything more transparent???? Why so many separate fees and deductions?
So if Google is working on a Paypal competitor, I CANNOT wait! As for buying from independent sellers on Amazon - I've never had any problems, and the whole process is pretty smooth. To give credit to Ebay: single best use of Ebay - buying second-hand CD's!!!
Linux Resources
Last year a bunch of us bought Sharp Zauruses (Zauri?) from a guy on Amazon. At first he looked legitimate, lots of positive feedback etc. Unfortunately it quickly became clear that it was a scam and getting Amazon to do anything about it in a timely manner was impossible. I did eventually get my money back from Amazon via their guarantee but the scammer apparently got away with thousands of dollars and lived to go on and scam others because Amazon was completely unwilling to look into his behavior untill at least 30 days from the transaction.
One problem with the Amazon Marketplace is that it isn't as obvious as it should be that you're not buying from Amazon. I'm sure Slashdot readers can tell the difference but I couldn't send a friend or relitive there and expect them to notice.
Another problem with the Amazon Marketplace is that the feedback doesn't give you any clue to what the other person bought. As it turns out many scammers build up positive feedback by selling high volumes of nearly worthless goods (used/crummy dvds etc) and then suddenly switch to selling more expensive items. I thought at first maybe this was just an isolated incident but when I looked into it more I found hundreds of sellers following the same pattern. I've been on Ebay since some time in the 90's and never been scammed but managed it on my first try at Amazon.
I'm happy to see Ebay taste the sword.
Although they've provided a useful service, they've made a point of suporting all sorts of liberal issues, which just seems holier-than-thou. Its a goddam e-fleamarket.
I don't care that you want tri-sexuals to be able to get married, government-paid sex-change operations, govt. money for my pet's sex change operation (my cat Felix is really a Felicia) and so on.
Amazon and Google have the sense to keep politics out of their business model.
Also, the article didn't mention Craigslist, which is really killing Ebay -- Craigslist is free.
http://www.thebricktestament.com/the_law/when_to_
The point of sniping is twofold:
1) You avoid emotional runups. You can't have much of a bidding war in twenty seconds.
2) Most people do NOT use the maximum bid option to just say how much they are really willing to pay. They may be willing to pay $50 but bid only $20. Why? I don't know. What I do know is that it means I can get something for $21 instead of $51 (or not at all since I'd rather get something cheap). That's why so many people feel pissed off when they are sniped, because they gladly would have paid more. I usually just bid my maximum - but if possibly I try to do it in the last thirty seconds to not let lowballers have much time to figure out what happened. If I get outbid by a better sniper, I don't care - because I've bid as much as I want and someone else is quite welcome to pay more if they wish!
"There is more worth loving than we have strength to love." - Brian Jay Stanley