John Pseudonym

Blodget Thinks eBay Looks Cheap; We Disagree

Ebay is abandoning it's roots.

Recently, a deal was cut with Buy.com and currently "Buy" accounts for about 1 in 25 listings at ebay.

While the terms of the "deal" were not disclosed, ebay admits to a mutually profitable arrangement with Buy and intends to make these arrangements with other mega sellers.

The rumor is that Buy lists for free and that final value fees were cut so that actual or Free shipping could be offered.

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eBay is actively driving out small sellers in order to improve "buyer experience" by having more "real companies" selling items on ebay rather than the average Joe selling out of his garage.

This has sent a wave of anger through the seller community. It's really just a disaster in the making.

First, sellers at ebay are also buyers. So ruining their businesses is hardly a way to install loyalty.

Second, large sellers like Buy also have websites to sell through. Invoices, customer service, everything tells you that buy.com exists when you buy from buy at ebay.

So, in effect, buy.com is using ebay to drive customers to it's website where they can avoid the ebay cut on future sales.

In the short run, ebay makes money. But in the long run buy.com gains a tremendous number of new customers while sales at ebay are flat or decline.

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Second, ebay opens the door for other sites like Ioffer.com and ecrater.com

These sites are growing like crazy as ebay sellers search for other alternatives. It will take time for the shift to occur, but eventually ebay will not be the "go to" site for auctions. Instead, they'll just have a handful of mega sellers selling stuff I can buy anywhere (and often at a better price).