eBay's (EBAY) "level playing field" has a bump and it's called Buy.com
If you ever wanted a preview of the "new eBay," I've got a treat for you: it will look a lot like Buy.com's eBay store. You will be surprised to see 150,000 3-day Fixed Price listings. Yes, that is correct—150,000 FP listings, in categories like Books, Music, DVD, and Computers.
Each of the listings requires immediate payment (no more nasty non-paying bidders), PayPal only, multiple quantities per listing, the listings run for 3 days and all of the items in the computer category include "Free Shipping". Also, if they are selling a item that has multiple color options , sizes or other options, they will have one listing for the SKU and somewhere in the order flow the consumer can select their options. (Wouldn't this be a great option for other eBay sellers?)
Buy has a 99.6 Feedback rating and DSRs of 4.8 across the board and has been actively selling on eBay since December of 2007, but there was nothing special about any of that until this week. Thanks to a tip from a reader, I noticed an increase in Buy's Fixed Price listings. Well, I smelled a story, so I contacted eBay and low and behold, there was a story.
Here is the response I received from eBay Spokesman Usher Lieberman:
eBay is aggressively using price as a lever to improve the value and selection on eBay.com. Consistent with our goals, we have entered into a partnership with Buy.com to bring their new-in-season merchandise onto eBay.com. We expect to learn a great deal from this partnership and we will build upon the results.
I asked how this could be economically feasible for Buy.com to list that many listings in Core; my quick calculation put their 3-day listing fees at $600,000. I was told, both by eBay and Buy.com, that this partnership was "economically feasible" for both parties, but that no details would be released.
Lieberman went on to say:
As part of the deal, Buy.com is limited to a single listing per SKU and their merchandise will compete with the merchandise of all sellers for search exposure. It remains incumbent upon every eBay seller to maintain great service, as defined by DSR scores, to surface at the top of search results.
So, I couldn't let this go and I contacted Brandon Dupsky of PeSA/ECMTA and asked if any of the top eBay sellers in his organization were getting a special listing deal. He replied:
No, not to my knowledge. [...] If eBay will be providing volume discounts to large sellers, I hope they start off by opening the door to the professional sellers who helped them build the eBay marketplace over the years.
I'm all for allowing sellers to negotiate volume deals with eBay; I had asked to negotiate my fees every year that I sold on eBay and was always told "that is not going to happen," but in light of eBay founder, Pierre Omidyar's, recent quote about "the level playing field", you can see that this announcement will not sit well with eBay sellers.
Pierre said, in a recent quote from a video clip:
What I meant by level playing field is that everyone should be given an equal opportunity….. I didn't want to have sort of artificial barriers placed on newcomers and to have people by virtue of their stature outside of the eBay community somehow be treated better—special deals behind the scenes because they’re a big retailer and we want to get them to come on eBay, that kind of stuff. That would have been—is—a disaster. That is what I meant by level playing field.
Most long-time eBay sellers have felt that it was just a matter of time before a major online retailer started selling on eBay, especially with eBay's drive to create a more retail experience for the buyer, but we all knew it wouldn't happen with the current eBay fee structure, which is not conducive to scaling a large business. Well, after this breaking news, "this ain't your Mama's eBay any longer."
Granted, Buy.com's listings serve as a sort of "Best Practices" for the new eBay, but the economics haven't changed for the existing eBay seller. They can't afford to list 150,000 Fixed Price listings because they still have to pay "Rate Card".
Buy.com is a beneficiary of this new way of thinking at eBay and I guarantee they won't be the last retailer to launch on eBay, now that the economic barriers have been lifted. Mr. Lieberman did say "they were the only one at this time".
Just my 12% or, in Buy.com's case, maybe 10% with no listing fees.
Update: Here is eBay's official response to the story by RBH at the eBayInkBlog.
Disclosure: none
