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.
eBay Solicits Select Sellers For Jan 22 Research Project
Yesterday I received an email from eBay inviting me as a seller to participate in what eBay is calling a:
voluntary research project about eBay
Here is the complete email:
eBay sent this message to David White
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Dear David,
In a continuing effort to provide our users with the best possible online trading experience, we invite you to participate in a voluntary research project about eBay taking place on January 22, 2009 and conducted by our research partner, Invoke Solutions. Your valuable feedback will help us improve our service to you.The research project involves participation in an online live session to help us understand how we can improve the seller experience on eBay. This unique online session will be held real-time on the Internet and will be interactive. Qualified participants who complete the entire online session will receive $20.00 in appreciation for your time.
Involvement in this research project is completely voluntary and we are inviting only a select group of people to join our online session. To see if you qualify, we ask that you answer a few short questions by clicking on the link below (or copy the address into your browser):
Your answers to our questions will be held in complete confidence and no marketing or sales efforts involving you will occur as a result. Your personal information will be used only to qualify you to participate in this specific research session and mail your incentive check. By completing the survey you consent to being contacted by Invoke Solutions to invite you to the online session.Those who qualify and are selected to participate will receive access instructions via email to the live online session. The online session will last approximately 90 minutes and can be accessed from your home or another location that is convenient for you. During the interactive online survey, you will be asked to interact with both a moderator (discussion leader) and other participants. This will be an engaging, lively session and we are sure you will find it enjoyable.
If you have any difficulties (or any questions or concerns), please contact recruitment@invoke.com.
Regards,
eBay User Research
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For purity of the research project I have removed the link in the above email that takes the recipient to the “qualification” pages.
When I clicked on the link I was asked for my email address, my gender, and then asked if I was involved in a list of about 12 different occupations which included whether or not I was involved in news media. Of course, knowing the outcome but wanting to be honest I answered yes and was immediately informed I did not qualify for the project. This is fully understandable as eBay certainly does not want the information given in this project to be public knowledge.
What I do find somewhat refreshing is the fact that eBay is at least outwardly interested in the “seller experience”. The timing however does concern me as eBay typically announces major changes in the later part of January and I wonder whether this “research project” is an attempt to see what the reaction will be from sellers to possible upcoming but yet unannounced changes? I am sure there may be some leaks or posts after this event takes place.
What do you think?
Brain Drain Continues! Is It Time To Punch Out At eBay?
Just The Latest Loss
Eric Shoup is just the latest manager that we are aware of who has “punched out” from eBay in the past 8 months. As has been well chronicled by Scott Pooler of TradingAssistantJournal.com, Scot Wingo CEO of Channeladvisor.com and Randy Smythe of MyBlogUtopia.com among many others, it appears that there is significant change taking place at eBay. Scott Pooler wrote a blog regarding eBay’s loss of talent and his latest post today which asks the question
Is the management team forcing new and untested technical challenges down the throats of the engineers just to make changes in a panic?
On my ebay & Beyond: Basics to Business blog today I wrote about the 28 % internal approval rating of John Donahoe CEO of eBay. I have to question whether the number of managers “punching out” of eBay is directly connected to the concern over the rapid and drastic changes ebay is undertaking or if this is just normal attrition that occurs after a change at the top?
Based on the number of employees changing jobs and the rumored impending layoffs at eBay coupled with the significant drop in eBay stock, I feel the answer is clear. Staff, users and investors are not pleased with the the direction the company is taking.
What do you think?
eBay Rumored Ready To Cut 10% of Workforce
In an article published last week in Barrons Weekly based on a report from Wedge Partners, Reuters today published a very short article on the rumors. 10% of eBay’s worldwide staffing would peg the number of layoffs at approximately 1500 staffers. eBay has not responded to requests for comment on this report.
With eBay stock reaching a 52 week low of 22.16 which is also a 5 year low, and ending the trading day Friday at 22.55 the company has lost just over 40% of it’s value in the past year.
Analysts are describing seller unrest and poor returns on eBay’s purchase of Skype along with the declining US economy and strengthening of the dollar as possible reasons of this decline.
Seller unrest has risen drastically since January when incoming CEO John Donahoe referred to the seller concerns and complaints to announced site changes as “noise”. eBay has made significant changes to it’s pricing structure including negotiating formerly unheard of reduced or free listing fees and reduced Final Value Fees for large volume sellers, restrictions on payment methods disallowing payments on the site by check, money order or cash, and placing limits on shipping fees sellers can charge in certain categories. Last week eBay announced more changes to the site including changes to the search engine on the site and changes to the Items pages that have sellers scrambling to ensure their listings can be seen by buyers which has increased seller concerns. Sellers cite bugs in the eBay Best Match search engine and concerns that the planned look to the items pages will be glitch ridden and confuse and frustrate buyers.
Sellers Moving to Other Venues
Thousands of posts on blogs and even the eBay Discussion Boards seem to indicate that ecommerce sellers who once believed that eBay was THE place to market are now looking at other venues such as Amazon, Overstock, Bidtopia, eCrater and Etsy and many others. In addition many sellers are ramping up their own websites as marketing venues. Unfortunately especially now as sellers and shoppers get ready for the very busy Q4 shopping season, many of the sites sellers are moving to with the exception of Amazon simply do not have the buying traffic coming to the sites.
Best Match Is The Small eBay Sellers Demise
eBay’s Best Match Favors Fixed Price Sales
eBay has for some time been making concerted efforts to wean it’s sellers away from auction format sales even though continual denials come from company officials. From John Donahoe to Lorrie Norrington to head cheerleader and eBay Ambassador Jim “Uncle Griff” Griffith all say that there will always be auctions on the site. The small seller is the thing that make eBay unique is what they say. One only has to look at the number of Fixed Price (FP) or Buy It Now (BIN) listings on the site to see that these make up the vast majority of the items listed on the site. This in my mind is due to the effectiveness of instant gratification for buyers who do not want to wait for auctions to end or lose out at the very last second by snipers. This is a valid point and I agree to some extent.
However this situation is percipitated by eBay’s refusal to institute the automatic extension of auctions that receive bids in the last minutes. Live auctions do not end until the bidding stops, other online auction sites extend auctions that recieve last minute bids to give bidders an opportunity to act so as not to be outbid. But this is another issue.
The point of this article is to point out that small sellers who sell unique items really will have a very small chance of success with the new Best Match search criteria.
Best Match Is NOT Simple
Just when eBay sellers thought that maybe, just maybe they had a handle on the way eBay was going to be using Best Match to sort listings, reality sets in. According to a post on the eBay Developers website there is really no way small sellers can determine what will be used in the Best Match algorhythm. In the article eBay clearly states the factors used in the search criteria are NOT LIMITED TO those listed. eBay is very practiced in the things they do say but more importantly what they don’t say!
Recent Sales
Recent sales of identical items by the same seller will be used in the Best Match for FP sales. What this means is that if you as a seller bring on a new product line, you will not be ranked high in search regardless of your price, feedback or DSR’s until you sell some of these items. eBay’s rationale is that “a recent purchase from a buyer is a great way to measure satisfaction”. Ok, I as a seller will simply put a few items up at a slightly lower price to draw attention to my items, sell some, then increase the price to my normal selling price and I will be advantaged in search.
Not so fast! eBay says that one of the other criteria is that the prices must be the same. So this strategy will not work.
Sellers Really Don’t Know
There are certainly many more factors that go into Best Match, including what category you list in, time ending your feedback and DSR’s etc. Sellers will know what categories will have different criteria for BM but since eBay does not give out propriatary info on the search algorhythms sellers will not know all the information they need. At least not the small sellers. Big Box sellers will know. Software developers will know, but the little guy won’t.
In my opinion eBay has made it impossible for the small seller to compete and that is the reason for the continuing decrease in growth and eventually it will be nothing more than Wal-Mart.
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.
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