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EBay Deal Irritates Individual Sellers
Dekortage writes "EBay's recent deal with Buy.com appears to be seriously irritating its veteran individual sellers. The deal allows Buy.com and other large fixed-price retailers to list millions of items on eBay without paying listing fees, and appears to be the direction that eBay will follow in the future. Understandably, individual sellers are outraged. 'I've paid eBay many hundreds of thousands in fees over the past several years and believed them when they talked about a level playing field. And they just plain and simple are going back on their word.' This comes after the dire prediction that eBay is losing its popularity."
With no real competition in the online auctions and micropayment system, I don't see things getting better. Craigslist auction anyone?
"God fights on the side with the best artillery." - Napoleon, Marshal of France - speaking truth to power
Even though, this being about eBay, having the LAST post is the only one that counts.
No folly is more costly than the folly of intolerant idealism. - Winston Churchill
Ebay has name recognition. That's all. Everything else they do can be done by another business following a similar model. It's not like they invented auctions, after all.
According to a recent MSN-Zogby poll,
WTF?! Those numbers are huge!
MSN-Zogby, IIRC, conducts online polls. Online polls tend to violate a wide array of rules regarding statistical bias.
Their anti gun policy made me stop using ebay years ago....
~ a low user id is no indication I have a clue what I'm talking about.
I don't see things getting better. Craigslist auction anyone?
You do know that eBay owns a stake in Craigslist of over 20% of outstanding shares? Craigslist will not get you away from eBay.
You hear that kind of excuse a lot, just like when a politician does something particularly egregious (e.g. Obama's FISA vote) you hear people explaining, "Oh, that's just a compromise to get more votes. He can't do anything if he isn't elected."
The problem with the stock explanation is that it's very often just wrong. Ebay's current emphasis on big sellers at the expense of individuals is losing them money, just like Obama's FISA sellout is losing him votes. Piss off your core market to chase some other potential market, and odds are you won't do well with either. By all means, businesses should try to expand their customer base and politicians should try to appeal to more voters. But when you abandon the people who got you where you are in the first place, you're almost guaranteed to suffer overall.
Businesses that do well are those which build a steady, loyal customer base that keeps coming back for more. This is particularly true in the online world, where changing to a competitor is very, very easy; the few success stories to come out of the dot-com mania of a decade ago show how to do it right. Amazon, for all its evil, still does a damned good job of selling books. Google, no matter what else it does, remains far and away the best general-purpose search engine. Until a couple of years ago, I'd have counted Ebay among those success stories, but now it looks as though they were just as flaky as any HowFastCanWeBurnVentureCapital.com site; they just took longer to show it.
Suits and their sycophants love to talk tough about how they serve the bottom line ... but in the real world, the suits are wrong more often than not, and here's a sterling example.
The correlation between ignorance of statistics and using "correlation is not causation" as an argument is close to 1.
I know several people who used to do a lot of business on Ebay who are rapidly becoming disgusted with it because of its clear preference for giant sellers over individuals; I'm not at all surprised to hear that this is a general trend.
The only sellers that should be disgusted are ones with their head in the sand. EBay's costs mostly fixed so they grow through volume. You get volume through larger customers who can provide that volume. Economic inevitability.
EVERY non-regulated company I'm aware of besides eBay provides volume discounts in some fashion for larger customers. I was an individual seller as well as a high volume power seller. One of the (many) reasons I no longer sell through eBay is precisely BECAUSE they provided no incentive for me to bring additional business to them. They kept raising rates instead of providing incentives to bring additional volume. Basically they priced me (and lots of others) out of their marketplace. It was too expensive as an individual or a business to continue to sell on eBay.
but why are they abandoning the business that made them successful in the first place?
The short answer is that they decided a long time ago to become a publicly traded company and the growth demands of being public is the deal with the devil you make to get equity funding. That's why companies don't really want to go public unless the owners are either cashing out (private equity) or they have no other choice. Had eBay remained a privately held company they could have chosen to stay their present size.
Businesses out grow their original business model all the time. Some businesses simply do not scale beyond a certain point. Amazon started as an online bookseller that had no warehouses of their own. That only scaled to a point. IBM got out of the personal computer business not long ago. That particular niche of the industry just didn't hold enough growth/profit potential for them anymore and was more of a distraction than an asset. When you are a publicly traded company shareholders demand growth and eBay has hit a wall with being the world's premier online flea market.
Many of the hard-core ebay whiners on its website are practically BEGGING google to open up an auction site, mostly because it will have practically millions as a buyer base overnight.
Google doesn't want the liability. If anything kills eBay it's going to be getting sued by every luxury good maker on the planet. EBay claims they want to ensure authentic goods but is unwilling to take the steps needed to ensure authenticity - namely physical inspection of items and their paper trail. Such physical inspection is completely outside Google's business model so they would be in the same boat eBay is liability-wise.
All that of course assumes Google could take marketshare from eBay where Amazon and Yahoo failed. That's a BIG assumption.
I am the technology products seller mentioned in the article. I have a BS in Comp Sci. from the University of Maine, 95', and have been a Software Engineer at several .com's until I wrote the code that is running my website (http://www.teckwave.com/#showMostViewed), eBay Store (http://stores.ebay.com/TECKWAVE), Amazon, and Google Base accounts.
It's written in Java using the Google Web Toolkit for the website and several Web Service API's for integration with the various marketplaces, distributors, and warehouses. It runs on Amazon's EC2 compute cloud and uses S3 for image hosting.
My intention from the start was to create a scalable software platform to make selling online easy, and I think I've about done it. Buy.com coming into eBay and getting their backroom deal has accelerated my plans. No hard feelings though, business is business.
If anyone's interested in helping me scale this platform please email me... tlibby *at* TECKWAVE.com