How to Fix eBay

On a radio interview a few weeks ago I heard Sherwood Schwartz, executive producer of Gilligan’s Island, say that he felt that it was entirely rational that the Professor, genius that he was, could never figure a way off the island, when all he had to do was nail some wood on the boat.

“That’s true of mankind,” said Schwartz. “They can do except what they cannot do.”

I thought of that analogy when I think about eBay (EBAY). eBay reminds me of the Professor, who with all the smarts, advantages and good looks, cannot figure out the obvious solution. With eBay, the issue is that it has to fix its core auction business. In order to succeed, eBay has to patch up its relations with its sellers, and re-win the confidence of its buyers. I cannot understand why it can’t execute this. Is it pride? Or is it the novelty of its holdings?

Like the Professor, eBay is so enjoying wonderful academic exercises like Skype that it never figures out a way to lasting success at auctions. First, let's look at just a few of eBay’s assets, which in many cases would be prized companies on their own:

• PayPal. PayPal is a sort of parallel and sometimes untaxed international currency, and it is now used in a wide variety of small business transactions. In some ways it functions like barter. Some analysts want eBay to spin it off, even as it is one of eBay’s crown jewels; but PayPal is the central banker and post-modern currency that makes eBay tick.
• Stub Hub: How compelling an idea is it that you can get the seat you want?
• Skype: While eBay’s purchase of Skype is still criticized, eBay is now bundling Skype technology with IBM’s LotusLive cloud services. IBM is Skype’s gateway drug into the office, where I.T. folks HATE eBay.

Then, there are eBay’s general advantages:

• The economy. The recession should be helping eBay. This should be the time when everyone should be unloading all the crap they bought when times were flush. In a recession, people want bargains, and eBay should be able to deliver that.
• Partners? The newspaper classified has completely lost its role as the spot for selling used goods, but those goods still need to be sold. Do eBay or its subsidiaries have a role in classifieds? What if you could pay a few extra bucks to put your eBay listing in certain newspapers?
• Antiques Mania: TV has produced a mania for collectibles, home design and antiques, and eBay is the best way for average Joe to offload his own junk and stock up with better junk.
• Process: eBay has the proprietary processes and patents to dominate not only the selling of used goods, but of any goods-selling. Could eBay be the cash register back end for antiques retailers?

Yet, if you look at eBay’s stock, it is down close to where it was at the first tech bust. So what does eBay need to do to fix it? We don’t have the exact answers, but management needs to consider the following:

• The fixed price goods should not be intermingled with the auctions. They ruin the experience. Now, imagine that you go to Sotheby’s, and just outside the door of the auction room, you have a sales room where many of the same sorts of auction items are for sale for a fixed price, all on consignment. The message, the immediacy of the auction, would be lost. There is no harm in eBay offering a “Buy it now” price but it should be separate from the auction section.
• It needs to find common ground between buyers and sellers, and make both happy. Of course, with as many transactions as eBay performs, there is no way to avoid complaints. And you can’t keep everyone happy. But the company has to fix this.
• eBay should quit trying to force higher fees on sellers. What makes eBay is scale. You don’t want to bleed the top sellers. Instead, you want sellers to sell more, and more people to auction things off. You want to make it easy for sellers, and always be thinking of fewer steps, and fewer costs. Through volume, you make up the difference.
• Kijiji, the free classifieds that were supposed to compete with Craigslist, are not promoted well. But the service could offer so much more. For instance, I looked at Sarasota, where I live. There were only 38 tradesmen registered with the service, yet the want ads are free to anyone. Why can’t eBay leverage its vast customer base to get people to use the service more? If, for instance, house painters used Kijiji to market themselves, is there room for contractor billing through PayPal? Can tradesmen set up service billing through eBay’s back end? Could eBay handle payroll taxes?
• eBay needs to investigate other ways it can use its processes. Are there other Stub Hub opportunities? While PayPal’s pre-eBay dalliance with gambling sites has been a problem, are there other legal ways Stub Hub can connect up with attractions to sell tickets?
• I can’t understand why the whole eBay drop ship retail store is not in every shopping center in the U.S. Americans have lots of crap in their houses that they would love to get rid of, and would love to have someone else take care of it. And Americans, poor as we now all seem to think we are, still have lots of things we want. So that seems to be a market, and I cannot understand why that business model doesn’t appear to be ubiquitous.
• eBay needs to think of its core business. For instance, Fillz, a British Columbia-based company, sells a vendor-neutral inventory management solution that allows booksellers to manage inventory across Amazon (AMZN), eBay and the rest of the bookselling sites. It’s a small, tightly focused company, and it is doing the sorts of things that eBay ought to be doing, namely helping to better serve sellers AND buyers.

eBay is one of the most fascinating companies in the U.S., and it is most certainly worth more than its share price. But that doesn’t mean it can’t screw things up in the meantime.

Stock position: None.

Comments

[redbaron:]

Garland, you forgot to mention the one thing that keeps all of the above suggestions from happening, and that is 'current management'. The group of people that run the company will not listen to any suggestion that doesn't originate within their own circles.......period. For any change in direction to even be considered, new management must be implemented. There is no other way, IMHO.

Feb 10 10:04 AM

[bluesmoke:]

Good points. For lack of better words, Ebay has become an institution, and in so doing is having trouble reinventing itself. For all the bad moves, which there have been many, it is still at the top of the hill. It has provided me with some decent pocket money that I otherwise would not have. I have also found numerous replacement parts much cheaper. But your call to constantly re-evaluate their business model is warranted. They can do much better.

Feb 10 10:05 AM

[Jake Berzon:]

It is very difficult to fix a company that has a dented image - most eventually go out of business. I am afraid that fixing eBay will be a challenge on par with fixing our economy.

Feb 10 10:06 AM

[Marcap:]

"The fixed price goods should not be intermingled with the auctions."

I do not agree. Fixed price listings are quickly taking over from the old auction style format. Most buyers prefer Buy-it-Now rather than Bid-and-Wait, which is one of the main reasons why Amazon is gaining so much ground on eBay.

"It needs to find common ground between buyers and sellers, and make both happy."

That I will agree with. Finding common ground however to make both 100% happy obviously would be an exercise in futility, but I think that few will disagree that eBay is now tremendously skewed in favor of the buyer, which of course accounts for the exit of so many eBay sellers.

"eBay should quit trying to force higher fees on sellers."

Agreed! eBay fees are just not realistic given that eBay provides nothing in the process except a sort of web-hosting service.

"Kijiji, the free classifieds that were supposed to compete with Craigslist, are not promoted well."

Kijiji in my opinion is a non-existent entity of any value. I suspect that very few have actually sold anything or received any worthwhile business through Kijiji.

"eBay needs to investigate other ways it can use its processes."

I do not agree. This would likely only benefit eBay buyers, and not eBay sellers in the least. After all, eBay is already implementing Google and other ads on its site which are in direct competition with eBay sellers.

"I can’t understand why the whole eBay drop ship retail store is not in every shopping center in the U.S. Americans have lots of crap in their houses that they would love to get rid of, and would love to have someone else take care of it."

This will not work on eBay, since very few sellers are willing to sell another person's "crap" without actually having it in their possession at the time. After all, who is going to describe the items? The owner? The seller? Or should the items first be shipped to the sellers? If so, who pays for that? What if the items do not sell? What then? What if the items are actually stolen? What then? It is just not practical to do, and that is why it is not being done.

"eBay needs to think of its core business."

Agreed! But I am not sure that eBay even knows what that is anymore. JD sure doesn't.

"eBay is one of the most fascinating companies in the U.S., and it is most certainly worth more than its share price."

I do not agree. I think eBay is already overpriced as I suspect the next couple of years (or less) will prove.

Feb 10 10:28 AM

[Wide Moat I...:]

The assumption among some commentators is that the problems cannot be fixed. That is, Ebay will never be able to grow its auction business again. That strikes me as remarkably bold. There are incentives out there that will encourage management and/or shareholders to fix it. So, the pessimist has to hold that management and shareholders will, for the foreseeable future, ignore those incentives.

In the stock market, you pay a high price for a rosy consensus. With Ebay, we have a bargain price for a valuable company with solvable problems. Let's be honest; this is not like curing cancer.

Feb 10 10:41 AM

[redbaron:]

Wide Moat, I agree with your basic concept, but when present management already believes they have fixed the problem, and that is obviously not true, is it not imperative to change present management? What works, or past tense 'worked', is already mostly known, and that is the previous model for auctions. It is just present managements stubborness to 'go back to what worked' that prevents a solution. IMHO

Feb 10 10:50 AM

[Nick Waddell:]

I have been a regular on the Internet since the days of 1200 baud modems...may be dating myself there. Periodically, I have had friends who tried to get me on eBay, but some things always made me suspicious; the way every auction, no matter how little interest it had, would become extremely heated in the last five minutes, the way my friends would warn me that people would "give you a good price because they make money off shipping..it just left a bad taste in my mouth. It seemed primitive and unreliable.

I have no vested interest in either, but compared to eBay, Amazon seems like heaven. It there. It's cheap. You order. It shows up.

Feb 10 10:57 AM

[Marcap:]

"I have no vested interest in either, but compared to eBay, Amazon seems like heaven. It there. It's cheap. You order. It shows up."

I agree completely, which is exactly why Amazon is gaining market share, while eBay is losing it.

Feb 10 11:11 AM

[User 283977:]

I think EBay's primary problem IS management. Management has increased small scale sellers fees to the point that many small scale sellers are leaving. They have modified the feedback system so its totally one-sided… and this observation from someone who is only a buyer on EBay. On top of this EBay now holds Pay Pal funds for new sellers until the buyer provides positive feedback. This behaviour continues until the seller has a substantial history with EBay. That leaves the seller holding the bag for shipping costs until the items arrive, and the buyer gets around to leaving feedback. EBay's policies are clearly favouring its larger sellers and driving away many of its small scale sellers selling absolutely UNIQUE merchandise.

What made EBay great was the large amount of collectable items and used merchandise they offered for sale. One persons crap is another persons treasure. A large portion of that type of merchandise comes from small sellers, NOT big sellers who are moving currently manufactured merchandise with a buy-it-now fixed price model. Because EBay is effectively driving away its smaller sellers, the nature of the available merchandise is changing away from unique collectables, to new products that you can purchase anywhere at a fixed price.

What EBay's management appears to be trying to do is to adopt an Amazon business model where traditional goods are purchased on a fixed price basis. If the only purchase option is fixed price, then its not an auction, and its not auction type goods where the price is based on what buyers are willing to pay. The author is correct, strictly fixed price items should not be intermingled. Not because of the pricing difference, but because of the merchandise difference.

EBay recently redesigned the "My EBay" page… They allowed people to use the old My EBay page, if they preferred, but recently, they took away that option and forced everyone to use the New redesigned page. Another good example of management that thinks they know what their customers want better then the customers themselves. Now their customers have to click on several tabs to get at the information that used to be available with one click… Why do you suppose they are forcing people to go to multiple pages… My guess is that advertising will follow. Advertising dedicated to selling, what else, fixed price items from those large vendors that EBay is favouring.

Ever try to complain to their "customer service" department about anything? First you have to find it, then you have to choose a heading provided from a highly limited, fixed list of items, none of which even remotely describes your issue. Management that makes it difficult to contact customer service by design sends the message, "We are not interesting in hearing from our customers because it COSTS too much money to provide a properly functioning customer service department. And even if we had one, we know what we are doing… "

No, the entire EBay experience has changed, and from this buyers perspective, not for the better. Another example of what was a great company with a unique business offering that is in the process of being destroyed by management that does not know how their own customers define value, and apparently does not understand their own business model. Management that wants to re-position their business to compete directly with Amazon and other on-line retailers. Management that wants to eliminate those pesky small sellers and replace them with large scale sellers with lots of merchandise to sell. Unfortunately, that merchandise is very likely different from what the core customers of EBay want to buy.

Feb 10 11:26 AM

[coyotebait:]

Excellent article!

The disgruntled negativity is overbearing, overworked and underwhelming, and have resulted in a stock price that is extraordinarily low for the value of the company and its parts.

Any company that deals with the numbers of people on both sides of the buy/sell masses invariably subjects itself to unbridled emotional personal rants, masquerading as objective analysis.

The article provides a refreshingly accurate look at fact and analysis. Thank you.

CHOMPS,

^__^

..

Feb 10 11:54 AM

[fatseal:]

Ebay doesn't want to fix ebay. It's like very change they have made is to drive the small seller off the site. 21 day holds for new sellers are a prime example. Why would you sell anything, even one item, if you knew you had to pack and mail it and then wait 21 days (or more) to get YOUR money? They want to be the largest internet mall, not the world's largest flea market. They want the "flea" sellers gone, to be replace with Buy, shopping, etc..and be a giant advertising platform as well. They limit the number of branded items someone can sell, so they can eventually rid themselves of individual small time sellers and woo outlet mall retailers. They have zero customer service, and the forums where people could ask questions, has been redesigned to be hard to use and impossible to find answers to questions, in effect causing the users who only came there to chat with their friends to go away. Another change designed to alienate small seller,s rid the site of old time sellers and "noise" and sweep it clean so everyone who remembers the "old" ebay is gone, and then they can turn it into Ebaymartazon and be just another online retailer. No flea marketeers or mom and pop sellers need apply.

Feb 10 11:57 AM

[Patricia013:]

Great article!! One of the few I totally agree with. I think veteran sellers all know most of the points you brought up and in particular patching up seller's broken trust. It either has to happen soon or Ebay will simply keep declining...it will eventually dwindle down into something unrecognizable and will be scooped up by another company. Sellers have proved they are not giving up on spreading the word of what Ebay has become and it is showing in Ebay's dismal sell-thru rate and lack of buyers. Management is so blind that about all one can do at his point is replace them. The idea of forcing Ebay to look and act like a cheap Amazon clone was a wacky one at best. Everyone hates imitation! I believe the staunchest business people knew it would never work....and it isn't working and is getting progressively worse.

At this point Ebay may never recoop the loss it is suffering from the mismanagement of its sellers. It has shown nothing but rudeness and arrogance toward sellers. Instead of providing good service for them and helping them make sales it has provided a hostile environment and a take it or leave it attitude! This is unparalled in the businessworld!! NO large business that depends on its customers kicks them around the way Ebay does. Ebay is either gonna have to "get it" and get it quick or they are rightly and deservedly doomed! This first quarter will tell the tale...if they decline again they can no longer hide behind the economy...especially if other online sales are up!

Wonderful article... can I vote for you as the new Ebay CEO ;-)

Feb 10 12:01 PM

[Marcap:]

While eBay has made many changes over the past couple of years, that as a seller I am not happy with, this change was not one of them. Holding funds for 21 days from new eBay sellers is a must. It is absolutely necessary in order to protect buyers from sellers whose sole interest in eBay is to be able to commit fraud of one type or another. Honest sellers should have no problem in understanding the need for this change.

On Feb 10 11:57 AM fatseal wrote:

> 21 day holds for new sellers are a prime example. Why would you sell
> anything, >even one item, if you knew you had to pack and mail it and
> then wait 21 days (or >more) to get YOUR money?

Feb 10 12:11 PM

[techzone12:]

I am a seller at Ebay. And I can tell you that there is 2 major problems that need immediate attention:
1. Fees are too high for the average seller. Although I am a small seller, I could potentially double and triple the volume, if the fees are lowered.
2. The feedback process is heavily in favor of the buyer. The buyer knows it and they take full advantage of it. There needs to be a mechanism, where the buyer is not allowed to leave negative feedback, just because he/she feels like doing so. In one instance, an item I shipped went to the wrong address, because the buyer reloacted (and never changed his address in paypal). Then he wanted me to refund his money, which I did (had no choice). I have a 100% pos feedback, but still some buyer are hard to deal with, and they just waste my time. The time that I can spend on listing more items, is consumed trying to deal with difficult buyers. Sure there are bad sellers (that need to be penalized), but also there are bad buyers also who abuse the system.

Feb 10 12:11 PM

[Et tu, Brute!:]

I would like to stringently appeal to the eBay Board of Directors the following:

Your top tier management must GO. In this floundering economy, with coming YEARS I feel pretty sure are going to be increasingly bad, under NO CIRCUMSTANCES must said top tier management be handed a Golden Umbrella(s). It's what they are expecting. They don't deserve it. They made their bed, let them SLEEP in it!!!

I believe that this single prospect -- the knowledge that no matter WHAT THEY DO they will exit with millions of dollars -- is the reason for all the disruptive madness.

You had better believe, that in the days of old where you were out on your ear without a dime, the efforts of the last year by the "top tier" ebay management, would NEVER HAVE ENSUED.

So what, ebay Board of Directors, if "the top tier management" is under contract for said Golden Umbrella, contracts are made to be broken. And I don't mean this lightly.

Keep them fighting in court for years over those contracts. Let them spend the MONEY THEY HAVE NOW on all the exhorbitant legal fees. Would be nice if they experienced some of the suffering their sellers have suffered where it hurts.

Their own personal spreadsheets. It's the only thing commensurate with what they've dealt out. And the only moderate coomparison I can think of that might actually work.

Feb 10 12:33 PM

[Marcap:]

"There needs to be a mechanism, where the buyer is not allowed to leave negative feedback, just because he/she feels like doing so."

I agree that eBay's feedback system is completely unfair. It is indeed one-sided in favor of buyers, and should be changed. If not, then eBay should simply switch to Amazon's style of feedback, whereby only buyers can leave feedback, but for which sellers are not in any way penalized, beyond of course the scrutiny placed on it by potential buyers.

Feb 10 12:34 PM

[longoil:]

eBay is notorious for its lack of customer service . Their policy is essentially to make it so difficult to contact them, that most people will give up. Having millions of customers is no excuse. Other online companies like Amazon and Symantec manage to provide excellent service to their millions of customers.

I was pleasantly surprised by the customer service at Symantec which is 24/7 service.
1) First, they direct to a FAQ weblink with the most common problems to see if your problem is listed there.
2) If your problem is not on the FAQs list, you can send them an email and phone them. They post the wait time for both contact methods on their website. Email response is typically within 24 hrs and phone wait time is typically 30 minutes.

eBay doesn't come anywhere close to this type of well orchestrated customer service.

Feb 10 01:04 PM

[Bob C:]

coyotebait wrote:
> Excellent article!
>
> The disgruntled negativity is overbearing, overworked and underwhelming,
> and have resulted in a stock price that is extraordinarily low for
> the value of the company and its parts.
>
> Any company that deals with the numbers of people on both sides of
> the buy/sell masses invariably subjects itself to unbridled emotional
> personal rants, masquerading as objective analysis.
>
> The article provides a refreshingly accurate look at fact and analysis.
> Thank you."

coyotebait,

Admit it, you've been hitting the loco weed again!
You praise the facts and analysis of the article, but dis all of us disgruntled eBayers that have been stating views that mirror those of the
writer.
In other words, our personal rants gave a damn good insight into what is wrong with eBay!

Yet I'm still blushing, since you think that we "have resulted in a stock price that is extraordinarily low for the value of the company and its parts"

Let the "noise" resume!!

Feb 10 01:05 PM

[techzone12:]

I still make money on Ebay, but not like I used to. I had a plan to increase the volume, but the plan got somewhat derailed. I am now not sure if the time I invest in the Ebay thing is actually worth it (I have a full time job). First the higher fees by the ebay/paypal, and then the higher shipping cost by USPS. If you add up the numbers, it does not look very appealing (to put in the effort).


On Feb 10 12:01 PM Patricia013 wrote:

> Great article!! One of the few I totally agree with. I think veteran
> sellers all know most of the points you brought up and in particular
> patching up seller's broken trust. It either has to happen soon or
> Ebay will simply keep declining...it will eventually dwindle down
> into something unrecognizable and will be scooped up by another company.
> Sellers have proved they are not giving up on spreading the word
> of what Ebay has become and it is showing in Ebay's dismal sell-thru
> rate and lack of buyers. Management is so blind that about all one
> can do at his point is replace them. The idea of forcing Ebay to
> look and act like a cheap Amazon clone was a wacky one at best. Everyone
> hates imitation! I believe the staunchest business people knew it
> would never work....and it isn't working and is getting progressively
> worse.
>
> At this point Ebay may never recoop the loss it is suffering from
> the mismanagement of its sellers. It has shown nothing but rudeness
> and arrogance toward sellers. Instead of providing good service for
> them and helping them make sales it has provided a hostile environment
> and a take it or leave it attitude! This is unparalled in the businessworld!!
> NO large business that depends on its customers kicks them around
> the way Ebay does. Ebay is either gonna have to "get it" and get
> it quick or they are rightly and deservedly doomed! This first quarter
> will tell the tale...if they decline again they can no longer hide
> behind the economy...especially if other online sales are up! <br/>
>
> Wonderful article... can I vote for you as the new Ebay CEO ;-)

Feb 10 01:18 PM

[Marcap:]

Those of you new to eBay who think that 21 days is too long a time period to wait for your money, or that PayPal rules are otherwise unfair to sellers, have likely never bought anything on eBay, and certainly have never sold on any other venue using other payment processors. Most PayPal competitors will either make sellers wait much longer than 21 days for their money, or else will refund buyers simply for the asking, often without even consulting the seller as to what transpired in the transaction.

Nonetheless, a simply solution for those of you who feel there is a better alternative, is to obtain your own merchant account. You will then not have to wait 21 days for your money. But then please come back and let us all know how you handled the many chargebacks that you will no doubt receive.

On Feb 10 11:57 AM fatseal wrote:

> 21 day holds for new sellers are a prime example. Why would you sell
> anything, >even one item, if you knew you had to pack and mail it and
> then wait 21 days (or >more) to get YOUR money?

Feb 10 01:44 PM

[User 283977:]

Here's another comment related to how EBay has changed for the worse appearing in today's Market Watch. It collaborates many of our observations with respect to EBay basically driving away the small sellers that were responsible mostly responsible for the provision of unique, one of a kind merchandise.

www.marketwatch.com/ne...

Feb 10 02:09 PM

[Ebay user 1:]

The whole problem with "Auctions" started the day they implemented the "Best match" search as the default search versus the old way that was "Ending Soonest"

This was implemented to court the "Diamond" sellers, they do not auction items and their listings are long term, thus they would not have come up to the top of the catagory list when the default search was "Ending Soonest" ... But when in "Best Match" mode and with all the metrics used, Free Shipping, Items Sold and just the basic preferred status they get from Ebay puts the "Diamond" sellers up to the top of the catagories.

The author doesnt realize that Ebay did have the "Auctions" and the "Buy it Nows" or "Fixed Price" as they call it now, totally integrated the day before they started this "Best Match" search system, this was about a year ago and before.

It worked like this:
All search was defaulted to "Ending Soonest" ... but along the top of the page there were HUGE YELLOW tabs that all you had to do was click that would just show you "FIXED PRICE" items only, that worked well for years, these tabs were so big not a person in the world could miss them, now they still have a way to switch to "Ending Soonest" on the page but its really small and on a pull down, hidden almost.

This was the "Auction Killer" ... you cannot auction item and have them ending in 20 minutes and them being on page 3 ... just not gonna work, Auctions do move up the list as they come close to ending (sometimes)but it all depends on how big of a seller you are, if you dont sell much then you are completely screwed, if you are a bigger seller then you are just regular screwed if you auction with this "Best Match" versus "Ending Soonest" search.

These changes were made for only one reason and one reason only, to get the "Diamond Sellers" to come on board with Ebay, I mean this is common sense, otherwise this would have never been changed, it just would not make any sense, Diamond Sellers had to have a perk to bother listing on Ebay, Donahoe made such a huge mistake by doing this ... his thinking was, lets get huge sellers to bolster the numbers so Ebay can keep a good average of items on Ebay all the time, instead of the ups and downs, this should have kept stock prices in check, I repeat should have.

But he did not realize what kind of site he was actually running, he thought he worked at Amazon instead of the Worlds Largest Flea Market, thus bring in only Diamond Sellers and have them on top of all the smaller sellers thus giving the majority of the best placement on Ebay for them and putting all the smaller sellers lower in the catagory list, well this pissed off the smaller sellers and they just stopped listing or slowed because their listing were getting no views because of the bad placement on the catagory listings.

Now what do we have? Well we have thousands of the same items that are placed high in all catagories that you can buy on any site of the internet and all the one off items from smaller sellers and "All Auctions" are buried, when you are a small seller you also have to pay the full price on FEE's ... Diamond Sellers pay no listing fee's ... Thus can flood Ebay with whatever and at whatever price with no penalty.

See I Remember when Ebay was courting the Chinese sellers years ago, they gave them free listing fee's as well, they flooded the entire site with FAKE NIKES, I mean it was crazy the amount of fake Nikes Ebay had on ... you would have to go through pages and pages just to find a seller that was from the United States and then they were few and far between and no they werent only selling Fake Nikes, they were selling Fakes of all kinds, Ebay finally had to get rid of the Chinese Sellers, it drove Ebays fraud to a new high, then they finally realized ok that was a bad move, Meg Whitmans move by the way, these policies have been handed down to John Donahoe as you can see.

Now we have Dimaond Sellers, which are on par with the failed Chinese idea they used years ago, just with different metrics ... Donahoe thought this will be a great idea, but now he is swimming in problems ... the smaller sellers actually paid to list on Ebay, Diamond Sellers do not ... Diamond Sellers have their own websites which when you buy and item from them on Ebay they give you coupons to go to their own websites, Smaller Sellers kept people on Ebay because they didnt have their own websites.

Smaller sellers only have unique items and they also buy here, Diamond sellers dont buy from Ebay, at least not anywhere close to the percentage that a small seller would, smaller sellers pay the highest fee's, buy the most off Ebay once they sell their wares, in some cases small sellers would buy 100% of the money they made on Ebay, example sell 10 $10.00 items and then get something they want for $100.00 ... this keep the Ebay economy running like a small planet, now the planet that was created buy the small seller is in depression in the same way the World is in its own small way, think about it.

Donahoe was totally spoofed by these huge online sellers, now he has no idea what he's going to do, you think this moron will swallow his pride and say ooops I messed up??? lol NO WAY IN HELL ... We small sellers are noise and he would never bow to us, he would much rather take his millions and leave than ever ever saying he made a mistake.

Feb 10 02:49 PM

[User 354601:]

eBay doesn't listen to its hardcore customers who have left them in droves. Those old customers are long gone. Tired of the corporate b.s. that ruined the neighborhood from the good folks who lived and breathed it everday. When you go to the side of hating an entity that changed so drastically from its original format, there is no going back to that model that was built on trust and communication Pierre O. style. Those were the days and eBay buried it all alive with its new business model. Instead of picking and choosing what to cram down its customers throats, they got greedy and deaf to the masses of customers(both buyers and sellers) who gave them the good will they enjoyed in the beginning. It can't and won't go back and we are now stuck with a company that is akin to Marie Antoinette.

Feb 10 03:35 PM

[unbroke:]

And to think -- Meg Whitman was offered to us as the Business Genius sidekick of a presidential hopeful...

Feb 10 04:43 PM

[leapingcat:]

Again, we have a well-researched article that gives some sound workable suggestions as to what Ebay needs to do. Again we have these suggestions supported by people who obviously have lots of experinence of using Ebay and know excatly what needs fixing. But yet again I fear that Ebay's management will completely ignore the obvious fixes, make further changes that will alienate even more users, and drive down the share price even more. Are they incompetent, stupid or what?

Feb 10 06:05 PM

[Et tu, Brute!:]

You would think that if the President of the United States came simply declare, I screwed up, and lowly CEO that genuinely HAS screwed up, could.

Feb 10 06:06 PM

[Et tu, Brute!:]

Unbroke: And to think -- Meg Whitman was offered to us as the Business Genius sidekick of a presidential hopeful.

~~~~~~~~~~~~~~~~~~~~

Yeah, that pretty much scared me to death! And I'm a Republican!

Feb 10 06:10 PM

[coyotebait:]

Bob C. ...One of the many architects of overkill. It's hard to figure out whether you need an attitude check or an IQ test.

Yes, Donahue does seem to be the problem; maybe Meg Whitman as well. ...No argument. But to allow your angst and emotion (aka apparent hatred) to blind you to the company's profit-making reality is something less than as smart as you think you are.

If you were at the helm, do you think you could make the adjustments necessary to utilize the inherent power of Ebay? ...Inadequate as your IQ may be, I'd bet even you could pull it off.

You sound like you need something to do. Why not give it a shot? Put ion your resume; and use me as a reference. If Garland doesn't want the job, you got my vote, you clever little boy, you.

CHOMPS,

^__^

..

Feb 10 06:35 PM

[John (Colde...:]

This is SO on point. I even did a big clip on the losing effects of eBay and how it must fix it with the sellers... 3rdpoblogs.com/colderi.../

Feb 10 07:38 PM

[Bob C:]

coyotebait,

Dang, now my feelings are hurt!

Why didn't you let me know earlier that you are so dadgum smart.
It sure didn't come through in your writings.
BTW, it's Donahoe, not Donahue.

Well this here dumb old "boy" is retired, so I just kick around on this here old computer taking on mental giants, like yourself there, and spreading the word about how poorly eBay has treated its small sellers.

The very ones that made it such a great investment for you high IQ types.

I don't need eBay, never did, but many relied on it to help pay bills and put food on the table.

I'm sure you couldn't care less, but I sure as hell do.

You said, "the company's profit-making reality"
I say, Q1 '09 will be a reality check, brace your chompers.

Feb 10 09:45 PM

[coyotebait:]

Bob,

LOL.

You are my horse, if you never win a race.

Even if you can't pass the IQ test, I like your style.

CHOMPS,

^__^

..

On Feb 10 09:45 PM Bob C wrote:

> coyotebait,
>
> Dang, now my feelings are hurt!
>
> Why didn't you let me know earlier that you are so dadgum smart.
>
> It sure didn't come through in your writings.
> BTW, it's Donahoe, not Donahue.
>
> Well this here dumb old "boy" is retired, so I just kick around on
> this here old computer taking on mental giants, like yourself there,
> and spreading the word about how poorly eBay has treated its small
> sellers.
>
> The very ones that made it such a great investment for you high IQ
> types.
>
> I don't need eBay, never did, but many relied on it to help pay bills
> and put food on the table.
>
> I'm sure you couldn't care less, but I sure as hell do.
>
> You said, "the company's profit-making reality"
> I say, Q1 '09 will be a reality check, brace your chompers.
>
>
>
>
>
>

Feb 10 09:56 PM

[nadine:]

coyotebait, eBay does tend to inspire rage for the following reasons:

a) until five years ago they really were a community site, and advertised themselves as such (another early advantage they completely wasted), so the change to big-corporation greed fostered feelings of betrayal

b) they have been acting so capriciously, esp. in the last year, really hurting people in the pocketbook for no good reason and making it impossible to plan

c) they cut special deals with the new "Diamond" sellers without offering any volume discounts to their existing large sellers (now there's a real customer "disloyalty" program)

d) as icing on the cake, they have insulted their paying customers (the sellers) by insisting that the buyers, not the sellers, are actually their customers who must be protected from the untrustworthy sellers, leaving the sellers - who pay ALL the fees for every transaction and who provide ALL the goods are services as a kind of indentured servant subject to Master eBay's whims.

Put these four points together, and you will see why sellers are not only leaving eBay in droves, but doing so with cries of "Death to eBay corporation!"

Even those who are staying have diversified and cut way back. like Jonathan Garriss, Executive Director of PeSA, who now does only 10% of his business on eBay according to a recent interview. Mr. Garriss is a large volume seller whose business ought to have fit in comfortably with a new fixed-price eBay, except that he was an existing seller and he couldn't get volume discounts.

eBay's behavior defies every common sense rule of business self-interest. I suppose you have to be a Harvard MBA and an ex-Bain consultant to think you have no need to listen to your customers or keep them happy because you know better. This management must go.

Feb 10 10:34 PM

[nadine:]

The author wondered why the drop ship eBay retail store is not ubiquitous. The answer is: eBay's fees are too high and its buyers too few these days. Five years ago you could do it. Now you can't. If eBay switched to free listings it might become possible again.

Feb 10 10:46 PM

[coyotebait:]

nadine,

Dismal indeed. Thanks for breaking it down. Agree with everything you say. Still believe the stock price on this albeit perhaps dying company, is too low.

Time will tell. Wouldn't surprise me to be wrong. ... Been there many times before. ...Coyotebait, doncha know.

CHOMPSNCHEERS,

^__^

..

Feb 10 11:14 PM

[Philip Cohen:]

All eBay users should understand by now that, notwithstanding any statements by eBay to the contrary, no action taken by the current management team at eBay has anything to do with benefitting eBay users: eBay’s every action is purposed solely towards attempting to improve eBay’s bottom line, and if at any time there appears to be some benefit to eBay users, that will be purely coincidental.

It now appears that if it was not for PayPay furiously manning the pumps the good ship “eBay” would undoubtedly be considerably lower in the water. Does Captain Donahoe intend going down with the ship (like Captain Smith) or will he finally see the ice berg ahead and realise the error of his course and hand over to a more competent officer who will allow the ship to be towed back into port for some much needed repairs? (The old classic Fonda/Cagney movie “Mr Roberts” comes to mind.)

And a detailed critique on my pet peeve, “hidden bidders”, at
www.auctionbytes.com/f...

Feb 11 03:13 AM

[nadine:]

coyotebait,

At some point the stock price will indeed be too low, if only as a takeover candidate. There must be many smart people at Microsoft and Google thinking about possibilities. But where and when, I could not venture to guess.

Feb 11 04:35 AM

[Maggie:]

Did you ever start planning a project and then, weeks into you realize your basic thinking was faulty and affected everything else so you scrapped it and went back to the beginning, rethought things and it turned out better.

Well, Donahoe is either too self-righteous or has dug himself in too deep to do this. Even when it was blatantly apparent that all the sites users - buyers and sellers - HATED Best Match - he kept it. Even though the DSR stars are totally biased - he keeps it just the way it is.

I could imagine his glee - thinking he rid himself of all the little flea market sellers' junk and made room for the big retailers. What little foresight. Now, at a time in the economy when he should have been positioned to accept all the small sellers who need to divest themselves of their possessions to pay their bills - he has instead created a site that is totally contrary to this. Fees are too high, negative feedbacks will end a new sellers career on eBay before it's begun.

All the trust on eBay is gone. Sellers of antiques and collectibles are not very likely to ship all their stuff off to ebay to sell on consignment for them because they do not trust eBay anymore. Also, they would undoubted get less by doing this than they are now - and right now they are not getting much of a profit as it is.

Also sellers, like myself, have established themselves in other places. Some are on other auction sites. Some on stores like I offer in my mall. They are not likely to abandon all that hard work and return to eBay under present management.

Feb 11 08:34 AM

[Et tu, Brute!:]

By the way, Etsy has now made it into the top 1,000 in World Wide TRaffic.

None of the other sites is remotely close. Although many are growing rapidly as well.

AND, there are buyers over at Etsy.

AND, for all of you with the love for antiques and collectibles. Etsy has THAT!

Feb 11 03:22 PM

[thatguy57z:]

You know eBay dose not back there sellers or listing to the feed back to what there sellers have to say. Buyers can leave negative feed back on a seller, but a seller cant leave negative on a buyer, and there charging there sellers to much in fee's

Feb 12 12:12 AM

[coyotebait:]

Their ya go.

^__^

..

Feb 12 11:20 AM

[fairytrixy:]

From the little seller,
Good article, I like the fact that you understand the need for eBay to FIX the auctions and repair relations with customers(sellers who paid money to list).
All I want to do is continue to provide for my family the way that I was. I am not the only one. I have heard different numbers, all the way to 50,000 small sellers in the last year.
Yet they still have the "Giving Works" and "World of Good" hooked on to the site. So now will they farm out social services too? That is where I am going to end up if they do not lift my "restriction" after 30 days. In the social services office. The company should be investigated to find out why in this economy would they shut out small sellers, who also were buyers.
the big power diamond mega sellers on the site have the pleasure of ripping and running on a weekly basis. The seller that went to Washington DC and spoke on behalf of "net neutrality" has negative feedback on a weekly basis, and a 98.4% FB rating right now. How is this helping eBay's image. Those buyers who were ripped are not going to come back and these seller's have become way to big to provide the hands on customer service that I do. eBay's government relations page is a joke, they have become the artificial barrier to free enterprise. Auctions take so much process to run. So get rid of the diamond sellers let them sell on Amazon and the like.
I stayed out of "the community" if that is what the chatrooms are and that is what needs to go. There are pleanty of social network sites why take up real time process with that?

In the 3.5 years I have been running auctions with estate sale items(Donahoe has fleas not me) with some new and gently used BIN items. I was able to be a consumer as well.
Also why are people who are "not a registered user" status for years now still showing up? I have come across many that have been at that status for 2 -3 years now. Is eBay keeping the spot warm for these people or what? Phishy? HMMMMMMmmmmmmm?
Bottom line there is no other place for the "swap meet, flea market thrift store crawling dumpster diving seller" both Donahoe and Whitman are snobs. Very fortunate well educated snobs.
And Please do not make me laugh, Meg is running for governator of California on the platform of jobs and education??? Do not count on my vote! If she does for this state what she did for eBay, I will be praying for an earthquake! It might be less destructive.

Feb 15 10:43 PM

[NYM Arts:]

It is Very Troubling that Garland Pollard, the Author of this article, would refer to PayPal as "The Central Banker" for Ebay.
Mr. Pollard needs to study Banking Law.
And should FOCUS COMPLETELY on the Sherman Act.
Mr. Pollard is Invited to peruse the Article found on : nymarts.com click on the REQUIRED READING links please.
Misinformation leads to Death of the Canary in this Coal mine.
Ebay MUST Sell PayPal in order to COMPLY with the Sherman Act.
Money Orders and Checks MUST be accepted forms of payment.

Feb 16 09:00 AM

[Dan Buchanon:]

Excellent story. My sense is that a lot of this tinkering is on its way. But What you'll find is that half of the universe will say "glory be" they're fixing it. The other half will cry about leaving the old ways behind. Change is good. Or you die.

Feb 16 12:25 PM

[redbaron:]

Dan Buchanon: 'Change is good. Or you die.'

Yes, Dan, but they changed one of the best business models of the last couple of decades, and they changed it to one that doesn't work.

Surely we can agree on those two points, Dan. It was one of the best, and now it is failing.

Feb 20 10:00 AM

[John (Colde...:]

Get the How To Fix eBay Report here 3rdpoblogs.com/colderi.../

Mar 18 12:13 PM