eBay Live Auctions Successor - Able Auctions?

eBay put out its earnings statement on Wednesday, which reflected a forward looking picture of improvement. In the wake of their earnings report, eBay also announced that they will close down the eBay Live Auctions platform at the end of this year. The big question would be why?

Jim Ambach, Vice President of Seller Experience stated, "As we work to improve the buying and selling experiences which you've heard our leaders talk about - including significant investments in Trust & Safety and customer support - we need to make sure our resources are aligned with our priorities. In the case of Live Auctions, maintaining and improving this platform falls outside our immediate focus, and will, therefore, be retired at the end of the year."

Can the aforementioned statement be interpreted to mean that eBay did not view the Live Auction platform as a priority during the past few years? Just how many employees operate and maintain eBay Live? No one knows.

While eBay's announcement did not affect the millions of regular auction sellers on their system, it did affect hundreds of live auction sellers who contributed (and created) an impressive revenue stream for eBay and its partner providers. According to Live Auctioneers, LLC they stated on their web site that they earned more than $100M in 2007 in fees. Live Auctioneers also issued a press release dated July 16, 2004 in which Live Auctioneers announced that eBay had entered into a seller referral agreement whereby eBay Live Auctions sends live auction clients directly to Live Auctioneers.

In contrast, Able Auctions (a partner of eBay Live) earned a bit less with revenues of just $700,000.00. Who is Able Auctions? Able Auctions operates iCollector.com and was also a partner of eBay Live. However, iCollector.com (as a stated partner of eBay Live) seems to have lagged behind Live Auctioneers, in gaining eBay Live clientèle - by the hundreds.

If the platform generated $100M in revenues (as stated by just one partner of eBay - Live Auctioneers, LLC) then it stands to reason that the "resources" are (and were) available to police the system, maintain it properly and improve the overall platform.

The last known update to the eBay Live Auction platform improved the selling experience for a few direct to eBay live auction sellers, who had access to a tool, which manipulated the end times on their live auction items. The items were pushed to the front of eBay core on an hourly basis, as opposed to waiting in line with the vast majority of other Live Auction seller items (who patiently waited for their items to flow through eBay core).

Manipulating the end time auction duration was through the use of a tool accessed by eBay direct clients. The advantage was clear. Manipulate the end times on live auction lots and one could corner the market within specific selling categories. This does not take into consideration the harvesting of eBay email addresses and then re-directing that traffic to an off-eBay e-commerce web site.

One can draw their own conclusions as to the value of front page placement on eBay core, let alone, flooding core hourly. eBay Live Auctions charges $1500.00 per catalog and a Live Auction seller may upload up to 10,000 lots into the system. eBay Live charges a 5% Final Value Fee on every lot sold through its system (as per eBayLiveAuctions.com). A Live Auction seller pays just 0.15 per listing (if the seller lists the maximum number of lots allowed). Non Live Auction eBay sellers can compare their average listing fees to arrive at their own conclusion, as to any disparity in listing fees between regular eBay listings and those paid by eBay Live Auction sellers.

A number of lawsuits allege that eBay violated Antitrust and Unfair Competition laws, while a recently amended action alleges shill bidding and conspiracy on the part of eBay and seller defendants. Could it be that the announcement of the winding down of eBay Live Auctions is more likely a result of (multiple) pending legal actions and an attempt to stem the tide of potential future legal actions? Who knows.

There's no doubt that there are fine auction sellers on the eBay Live Auction platform who supported the platform for a number of years. Those sellers shaped and molded the platform by way of creating online catalogs and expending millions in listings fees and advertising dollars to drive traffic into a system - that will simply disappear by the end of the year.

It would seem that eBay Live Auctions partners are stepping up to the plate to create their own live auction platforms and bidder applets. However, can they command the traffic of eBay? Are they up to the task in expending the millions they've made in seller fees (over the years) and re-investing those fees into multi-million dollar ad campaigns to drive traffic into a new platform?

The first question one would have to ask of eBay's partner providers is why did they wait so long to step up to the plate. The second question is not a question at all but, an answer. The applet and platform was there all along and was created by Able Auctions a number of years ago.

Disclosure: No positions

Comments

[redbaron]

Each time I go look at the eBay Live auctions, which show up when I search for various items on eBay, I am struck by the poor feedback many of those that sell on eBay Live seem to have. I recognize some of these auction houses, and have to wonder how closely eBay monitors shill bidding......or even how they COULD monitor shill bidding, from those auction houses. It seems obvious to me, as a long time (1996) eBay seller, that eBay Live has not been well monitored, and I strongly suspect that there was much abuse of the system by these auction houses. I attend 'Live Auctions' here in the midwest many times weekly, and I can say that any live auction has multiple opportunities for abuse, if the auctioneer is unethical. Putting it on-line, may actually increase the possibilities, as much depends on the auction house involved. How would one police shill bidding, for instance? And why do so many sellers on eBay Live, have such poor feedback? EBay gets some credit, in my book, for recognizing this potential (or actual, depending on your views) problem, and doing something about it. However, one could ask why it took so long. IMHO

[User 184759]

You actually missed the mark on your article in terms of a successor, as the industry already appears to have a live auction service for auction houses with proxibid.com. By my count, they already do more business than eBay and the partner providers you listed. In fact, they appear to address this issue by way of a press release on their website. Can you perhaps provide more information on this company and how it might play out in this situation?

[midwestbuyer]

Be aware of proxibid.com. They gave your absentee bids to the auction houses! I once left 10 absentee bids and every single one came out to be won by me at the maximum bids I left. I called proxibid several times and they said they had no fault. And the auction house sent the bill to a debt collector to pursue me. The experience was awful!