Small Ecommerce Business Get’s The One Two Punch From Google And eBay In One Day
eBay Analyst Day
Much has already been and more will be written about the first eBay Analyst Day held in 3 years. eBay executives did their best to put on their smiley faces in an attempt to encourage the folks from Wall Street. I will not attempt to regurgatate most of what is already out there, however here are two things that I took away from the event:
- PayPal is the leading money maker of the company. Some of you will remember I wrote about this last August in a blog post. One of the things I found almost laughable was the talking point eBay made that PayPal’s integration into the eBay platform had risen several percentage points over the past 6 months. Of course it did! eBay made it almost (this is as close as I can come to saying Monopoly) mandatory. Who were they really trying to kid?
- eBay will now be focusing on the “Secondary Marketplace”. First this is not a term that has been used before that I am aware of. What it really means is the liquidation marketplace. Out of season or end of live product. It was said, and I paraphrase here, “We are interested in attracting those businesses that have stuff in warehouses that they need to dispose of”. This certainly does not seem to include the small sellers that have one of’s.
While eBay continues to state that they embarce the small seller, in my opinion the only reason for this is the increased search engine visibility they receive by “allowing” these sellers on the site. Once buyers are on the site they are directed to the sellers that eBay wants them to see, not necessarily what the buyer wants to see.
eBay told analysts that 2009 would be very difficult on the eBay site, only slightly better in 2010 and incrementally better in 2011 IF the economy improves. eBay also said that it’s focus is now on the current customers and less on attracting new buyers.
Bottom line is lower volume sellers are in for a tough couple of years based on the current direction of the company.
For complete analysis of the eBay Analyst event check out http://www.ebaystrategies.blogs.com by Scot Wingo CEO of Channeladvisor.com
Google announced yesterday, during the eBay Analyst event (maybe to hope to sneak it out there with little attention????) that effective in May 2009 there would be a significant increase in fees for those merchants using Google Checkout.
Again, the small seller takes it on the chin with these fee increases.
Colderice did a fee increase comparison on his blog, and I think it brings home the point very well.
Every company needs to make a profit. I do not blame either eBay or Google for making these moves. They need to do what they think will improve their position in the marketplace and ultimately their bottom lines. This is what their stockholders expect.
All users of either eBay or Google need to decide whether their businesses can adapt to the changes or not. If not, the answer is simple. Change your marketing strategies to other venues or payment options.
Bank of eBay? Is This Where eBay Is Really Heading?
The Bank of eBay?
I have been talking and writing for months (OK, years) about the changes at eBay. It has been a long and winding road we have taken to get to this point in our ecommerce journey. While I thought the road was leading to a retail experience on eBay, an article today on the ABC News Money website by Michael S. Malone makes a tremendous amount of cents (OK sense).
eBay Numbers Remain Flat
By reading the financials and watching where the money is really coming from over the past couple of years one can justify the article. While the numbers for eBay have slowed significantly according to the latest financials, PayPal’s Merchant Services is growing at a phenominal rate of nearly 60% Y/Y according to Seeking Alpha. According to eBay’s own Q2 Financial Statement the growth rate of the eBay MarketPlaces was said to be 13% overall. This includes eBay, StubHub, Kijiiji, Shopping.com and other ecommerce sites. But, the PayPal growth is reported to be 33% Y/Y.
The new user growth on the eBay site has gone flat and eBay is more and more moving to a retail online expeprience. As this move will put it more in line with it’s major competiton Amazon, the real move that many people may not be noticing is into the ecommerce payment arena.
Money Makes Sense
Watching the money trail makes perfect sense. With over a 20 point difference in income growth between the MarketPlaces and Payment Systems and the room for growth in the ecommerce payment handling it makes me stop and take notice. Nearly every week I receive emails notifiying me of another company, airline or ecommerce site now accepting PayPal. Given the economy of today, ecommerce sites are fighting for every buying customer they can. These sites will do anything to make online purchasing easy for their customers and PayPal is in the catbird seat due to it’s position as the largest online payment system in the world.
Recent eBay Changes
While many including myself have focused mainly on the impact of the recently announced changes on sellers on eBay, could it be that this is just exactly what eBay wants us to focus on, and not the fact that PayPal is really the money maker and all the rest is just smoke and mirrors?
August 9th, 2008 ebay & Beyond: Basics To Business
This week we discuss the recent policy changes on eBay, the onlineauction.com upgrades and the debut of Amazon checkout.
In addition we discuss marketing strategies, computer safety, and blogging.
[podcast]http://www.ecommerce-marketing-radio-network.com/Podcasts/08-09-08.mp3[/podcast]
Feds Pass and Propose New Legislation Affecting eCommerce Sellers
IRS Rule Attached to Foreclosure Prevention Act of 2008 (Enacted)
The federal government continues to seek ways to generate income from internet sales. In an amendment attached very quietly to the Foreclosure Prevention Act of 2008 (S.2636) which President Bush recently signed into law, third party credit card or transaction processing services will be required to report to the IRS those sellers conducting over 200 transactions or those who do over $10,000 worth of transactions per year.
Providers such as PayPal, Google Checkout, and others will be required to provide a 1099 to the seller and the IRS to provide the government with the ability to tax internet sellers. This law will take effect in January 1, 2011.
Organized Retail Crime Act of 2008 (Proposed)
In this proposed legislation HR.6491 would require online auction sites like eBay, Amazon, Onlineauction, Overstock.com and others to retain information about high-volume sellers and provide that information to retailers and to law enforcement officials in cases where police reports have been filed.
It is estimated by the National Retail Federation that organized retail crime costs retailers between 15 and 30 million dollars annually.
With the epidemic of shoplifting and other forms of retail theft, this measure will provide a means for law enforcement to cross check for items that may have been illeagally obtained.
Why Do We Do What We Do
Recently I have been asked why I began ebay & Beyond: Basics to Business Radio. What’s in it for me?
e-Commerce is changing daily. New sites are emerging, others are changing their ways. How is someone interested in becoming or increasing their presence on the internet supposed to keep up? Yes, there are other blogs, radio programs, even infomercials all designed to sell you something or be a cheerleading event for either a selling venue or list or some program that will turn your computer into an ATM machine. Simply list your stuff, and magically money will come pouring in. I was even foolish enough to work as a presenter for a software package that I thought really did want to help people start or grow their business. What a mistake! But I learned an important lesson.
ebay, Onlineauction, Etsy, eCrater, Amazon, Yahoo Stores, ChannelAdvisor, Kyozou, Infopia, MerchantAdvantage, Endicia, PayPal, GoogleCheckout, Hammertap, Terapeak, Shipwire, SalesAmigo and hundreds of other solution providers and venues,,,,,Which one is right for my business? How do I know? Where can I find the information? That is what our show is all about!
e-Commerce Is Still A Business
Business is hard. Plain and simple. In the early days, selling on the internet on venues such as eBay was much easier. There was much less competition, the mega-marts of the internet had not yet joined in. Many Mom & Pop type businesses grew rapidly. Life was good. But make no mistake, in my 11+ years selling on the internet, I have yet to wake up and find money pouring out of my computer! It takes a lot of hard work!
Then came the e-Commerce explosion! Larger businesses realized it was not just a fad. In order to reach the most amount of customers the internet was a must! Accompanying this explosion came the developers who built software and websites proclaiming their value in helping your business grow.
Why We Do What We Do
The purpose of our ebay & Beyond: Basics to Business radio program is to attempt to bring the truth about internet marketing to those that most need it. In todays economic climate, many individuals and small businesses are looking for the information they need to make the right decisions to help their businesses grow. We strive to bring our listeners the very latest information on e-Commerce. We do not focus on just one venue or software. Instead we invite guests to the program to better inform our listeners.
We try and bring our listeners the news regarding internet marketing without being a cheerleader. There are many marketing venues and making the right choice for your particular business model is important. Since we don’t sell anything, our program brings our listeners the opportunity to learn.
With knowledge comes power.
eBayLive 2008 Keynote Address Starting Soon!
I am going to try and keep up with this while the keynote is being conducted so stay tuned!
As we begin this event one thing I have noticed is that there seems to be a dramatic decline in attendance at eBayLive 2008.
There are certainly fewer vendors on the exhibit floor.
John Donahoe is opening the event with a time honored tradition of checking the feedback totals with over 20,000,000 feedbacks.
John is now introducing his family as he is originally from the Chicago area.
No major announcements from John Donahoe, as he gets ready to let Lorrie Norrington take the stage.
eBay To Challenge ACCC PayPal Ruling
eBay has posted a response to the ACCC draft noice denying eBay the ability to require PayPal as the only payment option (with very few exceptions) on the eBay.com.au site.
The draft notice by the ACCC was posted yesterday, and according to an article on the Austrailian newspaper The Sydney Morning Hearld, though this is a draft ruling that must still be formally adopted, the ACCC rarely retracts a draft decision.
eBay contends it will fight the decision, and has rolled back the planned June 17th 2008 implementation of the PayPal only requirement until July 15th.
eBay has lost several judicial battles recently, and there is some feeling that eBay, known in some circles as the 800 pound gorilla, may be facing a battle such as the likes of King Kong. (Randy Smythe’s MyBlogUtopia) Previously thought to be invincible, little by little eBay is taking hits. In and of themselves these hits may not have much effect, but when these hits continue and build, the resulting cumulative effects may begin to weaken the gorilla allowing competition to build a formidable attack.
eBayLive 2008 is just 6 days away, and I look forward to hearing the sentiments of those eBay.com.au users that will be in attendance. We will search these members out and bring you live reports from the event live next week from our microphones of the ebay & Beyond: Basics to Business radio program.
eBay’s PayPal Only Plan In Austrailia “SUSPENDED”
The Austrailian Competition & Consumer Commission has issued a draft notice proposing to revoke a notification* lodged by eBay International A.G. on 11 April 2008. Under the notification, eBay proposes to mandate the use of PayPal for almost all transactions on the eBay site.
This news comes just a week before the eBayLive 2008 conference in Chicago and just 5 days before the planned implementation of the PayPal only payment rules on the eBay AU site.
“The ACCC is concerned that the notified conduct will allow eBay to use its market power in the supply of online marketplaces to substantially lessen competition in the market in which PayPal operates,” ACCC Chairman, Mr Graeme Samuel, said today.
According to the information on the ACCC site this action is only temporary until a final decision can be issued. Based on this information, it appears that at least for the immediate future eBay.AU buyers and sellers will have a choice in how they conduct business.
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