OT: eBay's Death by a Thousand Cuts

[Count]

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.

 

Article

[Calamerica]

Please participate in my Thread that asks for ONE reason eBay has declined.

 

I did skim your great post and yes, I agree that Feedback is the "sacred' cow of eBay and now they have ruined it for sure...

 

CAL who hates retaliatory negs

[Count]

 

I still think ebays days are numbered. Only a matter of time. When they realize it will be too late.

 

 

[Calamerica]

[JohnT]

Interesting thread. I think we'll need to see if this feedback thing is as bad for sellers as people fear. I think buyers will realize that a seller may take an occasional unfair neg and factor that into how they assess a seller's integrity.

 

As a buyer, I see the feedback change as a positive.

[heinlein99]

Topic not OT at all, given all the buying and selling we do.

[Calamerica]

Topic not OT at all, given all the buying and selling we do.

 

I agree - not OT at all. Most, closer to almost all CGC Forumites - use eBay.

 

And use ebay to buy and sell comics - our lifeblood here.

 

CAL

[mar-vell]

from 2000 -2002 ebay was great! i sold and bought a lot of books there but now i buy far less and almost never sell. it seems the amount of comics has declined in the last couple of years.The best place to buy comics now is right here on these boards. I have gotten good to great deals every time here. The only thing missing is the selection ebay had - here you have to take what comes along instead of searching for what you want.

 

This has been a boon to places like heritage,comiclink, and metropolis who worked hard i think to get the hobby out of the hands of ebay where chaos ruled and back into the hands of the dealers. it isn't all bad though at least now we collectors have good places to sell books in these outlets as well. Despite the fact ebay no longer has the material it once had it did help liberate us from the old dealer/buyer situation where we as collectors had to buy "high" and sell back to the dealer "low".

 

ebay seems to have lost sight of its roots and just cares about satisfying its investors- i think they have begun to realize that they have left themselves wide open for a competitive auction site to attack them but there isn't that much they can do at this point. They won't cut fees until they start to lose a significant amount of the market share and have no choice.

[Calamerica]

ebay seems to have lost sight of its roots and just cares about satisfying its investors- i think they have begun to realize that they have left themselves wide open for a competitive auction site to attack them but there isn't that much they can do at this point. They won't cut fees until they start to lose a significant amount of the market share and have no choice.

_________________________

 

Yes they will cut fees - too little too late.

 

eBay SHOULD HAVE fought harder to keep the existing Customers they once had.

 

I have been involved in businesses, not just calamerica-collectibles, for many years. I learned a long time ago that:

 

It is easier to keep existing customers than to go out and get new ones.

 

A no-brainer to me, anyway.

 

CAL w/ experience

[Monstro]

does anyone even care about eBay feedback? i know i don't

[MutantKeys]

Ebay isnt going anywhere

[Count]

that's what they said about the TELEPHONE company..

 

Sooner or later there will be competition.

[Calamerica]

does anyone even care about eBay feedback? i know i don't

Yes - read my Thread about the ONE reason ebay has declined in Comics General

 

CAL

[trmoore54]

Bottom-line is that it just isn't fair...So the Buyer can now leave a neg but the Seller can't leave anything, which includes a warranted neg...it would be interesting to add up the entire history of Buyer negs...let's just say it's 1% for purposes of the discussion...well, that's a helluva lot of transactions gone bad due to a non-contract-honoring buyer thumbing his/her nose at the system...

 

What is the reason eBay is giving? If it's only to attract an ebbing Buyer market, that's just lame (hey, let's invite back all the cretins and insulate them from repercussions due to their lack of integrity, stupidity, or any other number of reasons Buyers fail to come through on their end...?

 

I am selling far less on eBay in the last 6 months, and am giving the boards first crack these days and have largely had some great transactions and most everything I've posted has sold (except for that damn Unusual Tales collection!)...

 

As a buyer I'm buying less and less comics (which actually has more to do with the fact that most everything I'm after is above $100 and moreso above $500/book) but continue to buy things such as dvds, cds and concert/sports tickets...

 

But I'm pretty fed up in general with eBay's policies and thank God I don't have to rely on my eBay business as a primary (or much needed) source of income...would be nice if some competition came along...

 

Now we just need that 2nd option to come along and become viable for that CGC thing...

[Calamerica]

Ebay isnt going anywhere

 

Hello there

 

don't be so sure of that...

 

CAL

[cd4ever]

Ebay isnt going anywhere

 

I concur.

 

JOHN who concurs.

[Monstro]

does anyone even care about eBay feedback? i know i don't

Yes - read my Thread about the ONE reason ebay has declined in Comics General

 

CAL

 

from a buyers perspective, as long as a seller has a couple hundred feedbacks that are all positive but has a few negs. i really don't care. means nothing to me as a buyer.

[mar-vell]

does anyone even care about eBay feedback? i know i don't

Yes - read my Thread about the ONE reason ebay has declined in Comics General

 

CAL

 

from a buyers perspective, as long as a seller has a couple hundred feedbacks that are all positive but has a few negs. i really don't care. means nothing to me as a buyer.

 

if a seller with several hundred feedback or more has a rating of 99.8 or higher i have a lot of confidence. we all have run into the occasional wacko who will neg us if we don't bend over backwards to meet what are sometimes absurd demands! when they go below 99% i generally take a moment to look at what's going on in their feedback.

[Calamerica]

Ebay isnt going anywhere

 

I concur.

 

JOHN who concurs.

 

There is a "possibility" that ebay may split up into two or three different divisions in the future; the eBay Motors would be the first viable division.

 

PayPal could become the separate entity that they started out as, and a few other "spin-offs" could happen.

 

The eBay stock itself??? It will NEVER regain the mo it once had. Many a buck has been made by the shorts( short-sellers). I made a pretty penny by buying Put Options at the right times and then spent the money on eBay buying more comics!

 

CAL

[cd4ever]

does anyone even care about eBay feedback? i know i don't

Yes - read my Thread about the ONE reason ebay has declined in Comics General

 

CAL

 

from a buyers perspective, as long as a seller has a couple hundred feedbacks that are all positive but has a few negs. i really don't care. means nothing to me as a buyer.

 

So then you clearly do care about about feedback. You look at it, you see the results, the number of negatives versus the number of positives and you make a decision based on that infomation. Just as we all do.