eBay's Death by a Thousand Cuts 34 comments
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The impending death of eBay (EBAY) as the king of all marketplaces has been rumored for years. Every time management makes a change, raises fees or adds sponsored links, sellers say they will walk.
I've been following eBay since 1999 and I've seen and heard it all. Still eBay continues to be the 800 lb. gorilla of e-commerce. So it didn't surprise me when eBay sellers were once again on the warpath. Granted, this time the unrest seems less about fees and more about the changes to feedback; the perception is that eBay is taking away the ability for sellers to protect their business. In fact, during a conference call Tuesday between PeSA members and eBay management, I did not hear one question concerning fees; instead I heard about DSRs and Feedback.
Sellers are upset for many reasons, but in my view, many of them are concerned that they are losing control of their businesses. I believe if sales were great, they certainly wouldn't be complaining. (Amazon (AMZN) exerts much more control over their sellers, but they don’t complain as much because they are selling a lot of products.) Profitable sales are hard to come by on eBay and sellers are fighting very hard to maintain control of their business. The feedback issue is just a symptom of the feeling of helplessness. By not allowing a seller to leave a negative rating for a buyer, sellers believe the buyers will hold them hostage. This may not mean anything to those outside of the eBay ecosystem, but to eBay sellers, Feedback is their reputation and you don't mess with their reputation without a fight.
So, once again, sellers are upset and threatening to strike. I've never felt that a seller strike would be very beneficial; especially a one-week strike. The one difference I see with the seller unrest is that it's not just limited to one segment of sellers. In August of 2006, eBay raised fees on Store sellers but left Auction sellers alone. Earlier fee increases have affected one group more than another, but this time eBay has messed with Feedback, the most sacred aspect of eBay, and it affects every seller.
So what does all of this have to do with “Death by a Thousand Cuts?" February of 2008 is much different than August of 2006. In 2006 the options for eBay sellers were limited to Amazon and a few small upstarts. Amazon was just starting to expand their categories and open them up to 3P sellers, so there were not very many places to go. Today is much different; Amazon has expanded their 3P offerings, adding WebStore and FBA in addition to opening up more categories. Those upstart companies, that were around in 2006, have grown steadily and are much more viable this time around and paid search isn't so scary to sellers any more. Heck, they can even buy paid search ads on eBay that gives them more exposure than eBay store listings.
I came across a great article at Money.CNN.com entitled EBay rivals circle vulnerable auctions kingpin about the many options available to eBay sellers today. What was interesting were the numbers and trends these sites are seeing. Many of these sites saw an increase in registrations around the time of the eBay announcements. Sure, most of these sites are not seeing huge numbers in real terms, but the combination of the number of available sites and the measurable increases in registrations for each, begins to add up. Blood is in the water and each of these sites is stepping up their efforts to reach out to the unhappy eBay seller. “Death by a thousand cuts” just means that not any one cut is fatal. In fact it may take a thousand cuts to finish off the victim and all the while the victim doesn't feel they are in danger, until it is too late.
Lets start to counts the cuts: (Most data is from the article)
- “OnlineAuction.com, based in Grants Pass, Ore., reports that roughly 7,500 new sellers have opened accounts since eBay announced its new policies last week. That's a 15% jump in the site's user base, within a matter of days.”
- “Another contender, eCrater, has registered 1,400 new sellers within the last few days. That's more than double the site's average weekly total.”
- “Another upstart attracting attention from fleeing eBayers, San Francisco's iOffer, is built around a focus on friendly engagement between buyers and sellers. Sellers can transfer their eBay feedback scores to iOffer. . . iOffer has accumulated 75,000 sellers and nearly 1 million total users since its 2002 launch.”
- Another auction site, Chicago-based uBid, targets bulk sellers liquidating excess inventory. Its 7,000 participants include Sony (SNE), Motorola (MOT) (Fortune 500) and Dell (DELL) (Fortune 500). All sellers submit to a 10-point financial exam to ensure they're qualified to do business on the site: "That's part of our stringent anti-fraud stance," said uBid CEO Jeff Hoffman.”
- “… the auction site Bidville, which uBid purchased in 2006, does focus on what Hoffman calls "consumer-to-consumer" sales - the market eBay now dominates. More than 350,000 sellers are registered on Bidville, but 25,000 active accounts provide most of the site's 1 million listings, Hoffman said. “
- “Following eBay's announcement last week, the Overstock (OSTK) team worked through the weekend to design a new strategy highlighting its lesser-known auctions space, said Overstock CEO Patrick Byrne. The result? Overstock, in Salt Lake City, will redesign the header on its homepage to direct more traffic to its auctions tab. It plans to accelerate a software rollout that will beef up its auctions community message boards - and it's laying plans to produce 15-second Internet commercials to get the word out. "We think the time is right to position ourselves in this category," Byrne said. “Even Amazon has noticed an uptick in new seller accounts in the last week. Best known in its early days as an online bookstore, Amazon (AMZN, Fortune 500) expanded into consumer electronics and other categories, and in 2000 began allowing third-party sellers to list their wares alongside Amazon's offerings. All products are offered at a fixed price.Today, 26% of all items sold on Amazon come from its 1.3 million third-party sellers, who range from mom-and-pop vendors to Target Corp (TGT) (Fortune 500).”
- And the cuts go on: Yahoo Stores, Independant WebStore platforms, eBid.net, Play.com, Etsy.com, Google (GOOG) Product Search, Google and Yahoo (YHOO) paid search and BuyBack sites are going after consumers who may become casual sellers.
Not one of these cuts will be fatal, but when you add them up they are beginning to drain the lifeblood of eBay, the seller.
I'm not predicting the imminent demise of eBay, but if they don't do something quickly to stop the bleeding, they may find themselves as just another marketplace and my guess is that this 800 lb. gorilla is going to weight a lot less.
Disclosure: none
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This article has 34 comments:
You hit the nail on the head. Its sad what is heppening to ebay. It once was a great place to sell anything and buy on.
Those days are long gone and its becoming impossible to believe anything ebay says anymore.
However, the people at the top of the ebay food-chain are drastically removed from this sort of low-level interaction. Their focus is on the Aggregate. They basically represent the Opposite of that old adage:
They can't see the Trees, for the Forest. They are custodians of the forest and that is their only concern. The death of a tree, or two/three/thousands, is not their focus. Now, we can scream at them that the death of a tree is due to disease that will grow and consume us all, but their experience/education tells them different.
Therein lies the problem - the *disconnect* that they have with their true customers, the Sellers. The ebay-elite are not sellers; they are not business people in the sense of an ebay seller. In light of their past actions in regards to any form of commerce, they barely qualify as sensible Business People.
Take a week sometime and look at the acquisitions they have made. Butterfields & Butterfields, Kruse International, Billpoint - all bought in 1999 for (various reported figures) $260M to $325 combined. All were sold for *undisclosed* amounts or abandoned. The year they sold the two auction operations, ebay reported $49M is non-revenue income. I'll leave that to the detectives to figure-out if that is all they got.
Oh, and what about Billpoint? A massive success! umm... no, that was the abandoned project. It actually beat Paypal to the market by 6 months, but ebay Tinkered and Fiddled for another year before releasing it. Then they bought Paypal and threw Billpoint into the trash. That was $100M of the original $260M-$325M expense - thrown away. Their actions with Skype are nothing new; they simply have worked their way up to the $Billion dollar range.
As for Randy's commentary like always same ole same ole
Buyer feedback is public to promote confidence in the purchasing process which is critical for eBay and their sellers to survive.
But sellers will also be able to submit reports to eBay CS or T&S on abusive buyers.
These reports are non-public.
The key to whether this new system will work is how seriously eBay takes these reports to protect sellers.
Face it, everyone gets negative feedbacks. But the it's important to differentiate whether they were from ignorant buyers (where there's not really anything you can do) or abusive buyers (where you need to report them).
I think eBay sellers will firstly have to give up on the Holy Grail of a 100% rating since this has always been unrealistic to begin with, secondly make good use of feedback comments when needed, but also take a "tough love" approach towards buyers who do not pay attention to auction terms. This is their business, and the customer is NOT always right.
Once scores 're-level' after the changes go in, people will learn what a Good score is and what a Bad score is - whether this is 100% or not.
There are plenty of misconceptions about the changes that are going to take place, and most people do not really understand them - or even read them.
I have concerns that eBay may not handle their commitment to these changes and sellers properly.
But I do believe that these changes will be a good thing for ALL sellers if implemented properly.
Now a bidder has stiffed me after he won an auction because he knows no real harm will happen to his Ebay account status. So Ebay accumulates one more paper cut. THANK THE AUTHOR OF THIS ARTICLE VERY MUCH FOR PUBLISHING THE WEB ADDRESSES OF ALTERNATE AUCTION SITES!
Six months later, after Paypal business and stock was soaring, ebay decided the time had come. Besides, they just couldn't get the ebay buyers to accept Billpoint and the sellers certainly didn't accept it (no pun intended... well, maybe). That's when ebay made their greatest move to date, paying $1.5B for Paypal. Only TEN TIMES as much, if they hadn't drug their feet.
Just one more thing about those companies, Butterfields & Butterfields, Kruse International and Billpoint. They were all viable companies before ebay purchased them. By the time they were sold-off or abandoned, countless people had lost their jobs and/or their economic well-being, not to mention that the reputation of the two sold companies were damaged. But, who cares about them, right? Certainly not any yawning, insensitive person that comes across as a member of the self-imagined gentry.
Now, let's talk about ebay's phenomenal Growth. It is truly something, isn't IT? Absolutely, no doubt about IT, ebay is one spectacular example of growth. And it is all owed to the brilliant minds that so expertly guided IT for these last ten years. Yes?
No. The people made IT. Some people offered goods and other people bought those goods. It is that simple. The business thrived *in spite of* all the blunders made by the powers-that-be. The original concept, just like A-1 Sauce, was That Good.
If I were to open a whore house on the docks at Norfolk, it would be a spectacular success. I could take some of the credit, but I certainly couldn't pretend like I had invented sex. Pierre didn't invent eCommerce, but he did invent a method for it; Meg and Bill manipulated that Method, every-which-way, but they added very little that advanced the actual commerce. They did raise the fees every year, but those sailors... er, sellers are eager to "ply their wares".
Then we had less visibility for the same fees.
With ebay refusing to let the buyers know they would have to search differently to find International items.
Over the last year there as been one change after another with numerous glitches.
Now we have ebay saying that the site looks like a fleamarket.
IMO it is ebays intention to rid itself of the small sellers.
They will then become a search engine directing buyers to Large Companies items. e.g General Motors, Sears, Walmart etc.
It was also remarked last year by ? that ebay would milk the small seller before getting shot of them.
The new fee hike disguised as a cut in fees will be guaranteed to milk the small sellers dry.
Then we had the DSR with ebay telling buyers 4 was a great score to leave a seller, then ebay tell the sellers 4.3 is not good enough, their items will be dumped at the bottom of searches. With all sellers paying the same fees, but some sellers having a lesser service. Add to this the best match with ebay telling the buyer what is best for them.
Power sellers will get a discount.
Only a small, very small percentage of the top power sellers may get a discount in fees.
The DSR will ensure that not to many sellers if any will recieve a discount.
IMO even the majority of Power Sellers will be classed as not big enough to compete / stay on the new ebay when the big companies are brought on board..
Then we have the better protection for power sellers. Power sellers will have paypal protection on all items buyers buy wether the buyer is verified or not.
Again the small seller is left out in the cold without the added protection.
Feedback not being able to leave a bad buyer a negative to warn other sellers of this bad buyer.
Small volume sellers will not be able to afford to take a hit from a scamming buyer unlike a big Company, small sellers will be be at the mercy of unscrupulous buyers if they wish to remain at the top of searches, get any chance of selling their items.
This feedback change will not affect Power Seller as they can have their solicitor issue a Stat Dec, or have their Account Manager intervene on their behalf.
Another little thing the small guys are not privy to.
After the Visibility change last year my sales took a nose dive, while checking my old sales to see why my sales had gone Poof I found I was experiencing Geographic sales. My sales were only going to certain parts of a Country at any given time. Throughout the year my sales have rotated to certain parts of the Country at given times on a regular monthly pattern.
Could this be down to some sellers items going onto very obscure servers?.
Will more and more sellers sales be affected. When the big companies come on board will there be room for the smaller sellers items on the servers?.
Sellers check your past and future sales for a Geographic location pattern.
There are a number of sellers I am aware of with a similar pattern.
Ebay state the changes have been made for a better buyer experience.
If that was the case why did they not rid the site of the bad sellers instead of taking their money pushing them to the bottom of searches.
Hypocritical to take money then do that to their listings IMO.
Get rid of the real Postage & Packaging gourgers £0.99 start price £60 postage. They could of dealt with them under the fee avoidance procedure.
Retalitory feedback ebay know who the sellers are that use that practice, what did they do tell buyer & seller to work towards a Mutual Withdrawn feedback.
Sellers ending up bribing buyers to remove Neg feedback???????
Well after the Visibilty change, then cottoning on to the Geographic Sales where I had to throw more money at ebay for relist after relist after relist fees I decided to stop giving ebay £600 in month in fees. I started taking some of my eggs out of ebays basket and putting them elsewhere.
One auction site I have started selling on is
www.ebid.net/
Here you can get a lifetime free listing for a reasonable price, they have a half price promotion at the moment that should not be missed.
Great Customer Service.
They are open to suggestions. Will implement all good suggestions. New category etc just ask.
Scammers are thrown off permanently.
I also intend to have my own website.
why are you so nasty?
We first registered with eBay.com as family sellers many moons ago, our biggest sales were to our US buyers selling antiques and collectibles (weren‘t these type of sales the grass roots for eBay). Those were the days when the US dollar was as little as 50cents AU in value and worldwide selling for us was both competitive and profitable. Now the market has turned around and for sellers in the US you would probably have great success selling to us Aussies.
Ebay started the downward spiral for what is termed as hobby selling here in Oz, IMO when they discouraged payments from WUM cash payments (these as far as we were concerned quite safe and had many payments worldwide made to us). This Followed by the beginnings of purchasing other forms of payment options such as in Bidpay, Payingfast along with many others also previously mentioned. We saw the writing on the wall from the day eBay/PayPal was introduced and started to promote it as the be all end it all. End it all it did for us as Mum and Dad sellers we are not interested in signing up for third party merchant fees.
Ebay is obviously wanting to move on and it can be understood that they are more interested in the bigger scheme of things after all it is a big business and their prerogative/choice.
Having said this, it is also our prerogative/choice, we can vote with our feet and take our flea market business elsewhere, what better way than to promote the US sites that have started up as has been shown already here (a list stating worldwide site options would also be good here and I am sure that the Aussies will do a list of Worldwide Oz sites and post them here for US sellers/buyers as well.
We found this link on the Ebay Round Table Forum in Oz check out what will be the next eBay business venture into the global market as many believe we in Oz are the guinea pigs for ebays global positioning. Please promote and support the alternatives, together we can make a difference and what better way than to unite globally again and bring back the good old days even if it is without ebay.
Best Regards Oz Mum & Dad Flea market sellers.
eBay management is failing customer relations 101 because they do not see sellers as customers, their customers are market analysts, most of whom are as short sighted as eBay (easy to hoodwink).
All the talk about removing 'bad sellers' is making buyers very uneasy. When the trolls gather, literally salivating about teaching sellers a lesson, it is time for any seller with a dwindling bottom line to rethink their business plan.
The days of bunging an item up and seeing it sell in a mad bidding frenzy are over. GONE. Buyers are much more savvy now they know that no item is truly unique, wait a while and another will come along.
Sellers who want to remain in e-retail will have to learn SEO, branding and marketing. Customer service alone will not do it.
Promote and support the alternatives, with your buying and your selling.
my site is: 580mall.com and you can find many cheap electronics here, including GPS, and Cell Phone, iPhone style mobile, MP4, Digital Camcorder.
Had eBay accounts, one for buying and the other selling for about ten years, but finally quit selling in late 2008. During nearly a decade, I’ve seen the auction eBay site change from being mostly enjoyable to a general money losing annoyance. For a time back around year 2000, I was pulling in over $1,000 a week in profit from eBay auctions selling odd smaller items such as vintage photo images, old LIFE magazines, antique books and small collectible pieces. It was actually fun and in selling, many online friendships developed. There were lots of eager auction buyers then with all payments in check or money order. With over 6,000 sales transactions there were just a couple problems involving small amount checks.
Selling and buying back then was quite simple too without myriad complex, confusing and useless added enhanced features. Within the past five or so years, eBay has been transformed through gross mismanagement into a politically correct, money losing, authoritative monstrosity.
All of my auctions were cancelled by eBay twice for “inappropriate content” in year 2004. These occurrences both involved old photographic prints. One picture showing the zeppelin Hindenburg in 1936 had use of the term “nazi airship” within the descriptive text. That and 40 other auctions were all wiped out by eBay with my account being at once suspended for 14-days as punishment.
The other episode was a few weeks later involving another photographic print taken in 1942 showing a wartime scrap metal drive having a sign within the picture displaying “All this Scrap to Lick the Jap”. Not only were all other ongoing auctions wiped out, but there was a small barrage of nasty gram robot Emails from eBay that followed. I was threatened with being banned from eBay forever for “racist” content in my auction sales. It was ordered that before my being “allowed” to again become a “ full member of the eBay community”, that I complete an online tutorial with follow up quiz related to “Social Tolerance”. Only after carrying out that task would I be “considered” for reinstatement.
In passing, I have noticed that eBay messages are usually signed by some anonymous persons with a odds-on contrived names such as Crystal, Lance, Tiffany and Moonbeam. Anyway, in response to the demand by some flunky named "Todd" that I summit to an eBay indoctrination in “racial tolerance”, a reply was sent. My response to eBay was simple and brief . . . “I’m married to an Asian you a--holes” “Go and blank yourselves!” “enough is enough!” Within less than a week, my eBay account mysteriously was reinstated as if nothing had happened at all. So much for the eBay diversity doctrine.
By October 2008 with increased listing fees and assorted negative ingredients, such as eBay’s PayPal only accepted payment rules, as a small seller, I just dropped out. eBay is in financial deep trouble due to bad business practices and an overall lousy attitude towards its customers. Seems too that eBay like many other “sales” outfits today have gone totally off track. Corporate attitude is now more like that of a government social service agency rather private business for profit. Since alienating and pissing-off the customer base, eBay is headed for the rocks.
The hard dollar cash economy with millions of small time sellers built eBay. Many tons of Beanie Babies moved back and forth through eBay in the early days. In recent times eBay’s policies are set to drive out modest sellers and pull in big retail dealers. As we know, that model is now in collapse. The whole situation is going bust. As it turns out, due to corporate greed and basic incompetence, eBay has killed it’s own golden goose and driven itself out into the cold. The salad days of eBay are over. Time to move on.
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