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.
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.
Is eBay Becoming The Newest Big Box Electronics Site?
Announced Changes Tell The Story
As I try to digest the changes to the eBay platform announced yesterday, I can’t help but notice that it truly appears to me that eBay wants to cash in on the Consumer Electronics wave. To do this eBay has inked “sweetheart deals” with such sites as Buy.com to give these huge consumer electronic sellers an unprecedented unfair advantage. These deals allow the huge sellers to list tens of thousands of items on the eBay site with no listing fees and reduced Final Value Fees (FVF).
In yesterdays announcment eBay states
” In extremely competitive e-commerce categories such as Consumer Electronics, Cameras and Computers, we’re decreasing final value fees. This means we’re giving you an even bigger incentive to list these types of items on eBay.”
In addition, eBay is also offering
a special rate of only 5 cents through the end of the year for Buy It Now™ fixed price listings in the Media categories (Books, Video Games, Music and DVDs/Movies) using pre-filled item information.
These special incentives certainly are placing those high volume sellers in these categories at a significant advantage, just in time for the busiest selling season of the year. It is very apparent to me that with the emphasis eBay is placing on these very high demand and visibilty categories, that they (eBay) wants to become the largest online source for consumer electronics. While this is great if you sell in these categories, it is terrible news for those sellers that sell in other categories like clothing or shoes or any other category not benefiting from the reduced fees.
Auction Format Listings Remain The Same
As the announcement states, there will be no reduction in fees for those selling in the Auction Format. This tells me that eBay is still moving towards a Fixed Price site. Though Lorrie Norrington says in the announcement that “Auctions will always have a place on eBay” I can not help but remember the immortal words she spoke at the PESA/ECMTA conference in New Orleans earlier this year. “You won’t recognize eBay in a year”.
The Same Old eBay-NOT
n my mind eBay already does not resemble what it was when I started selling on the site 11+ years ago. I realize that ecommerce has changed, technology has changed, and the online buyer has changed. To stay competitive, eBay had to make changes to stay competitive. My concern is what marketplace they want to be competitive in. Cetainly it appears that it is not the marketplace that they started out in, and that is OK if that is where they want to go.
In my opinion they should let their customers, who after all are the SELLERS decide what direction they should be heading to.
Silly me, I forgot, according to Pierre Omidyar we business owners don’t know what is in our own best interests.
eBay Continues The Management Shuffle
Rajiv Dutta To Retire
July 16th, 2008
eBay announced today that Rajiv Dutta President of eBay Global Marketplaces will retire in October of this year. Lorrie Norrington current President of eBay North America Marketplace will move into the position that Rajiv held.
Why Does The Management Shuffle Continue?
Frequently in the corporate world, when a new captain takes over the helm, we see changes in the team beneath. Many of the changes in the team seem to be those people with about 10 years of tenure with eBay. As the focus of eBay changes towards a retail experience, I can’t help but wonder if some to the changes are due to the fact that more emphasis seems to be toward that retail type business model and away from the auction format.
Rajiv Dutta will be missed. I had only one or two oppotunities to speak with Rajiv, but found him to be a honest and interesting person with a great grasp of the marketplace. I wish him well in his future endeavors as I have the same wishes of success for Lorrie Norrington in her ascent within the eBay hierarchy.
eBay Announces Significant Changes To Feedback,, They Really Are Listening
Lorrie Norrington Announces Significant Improvements To Feedback System
Lorrie Norrington, President of eBay Global Marketplace Operations announced sweeping changes to the much discussed Feedback System on eBay. The announcement posted on the eBay announcment board basically says this:
Neutrals will no longer be counted as negatives when determining a sellers feedback rating. This apparently will be retroactive and will require re-calculation of the feedback ratings of all eBay Sellers. This will be effective in late August.
There will be a mechanism put in place to allow buyers to change their negative feedbacks left for sellers if the seller makes the dissatisfied buyer happy in a timely manner. What that mechanisim will be was not disclosed, but more information is coming!
eBay Is Really Listening!
One of the comments Lorrie made at eBayLive, and I am paraphrasing here is “Give Us A Chance”. I have to admit, I for one was skeptical. I have been selling on eBay for 11 years, and have not often been impressed with their response to the voices in the community. Though there will have to be much thought given as to the way extortion by the buyer is handled this is a MAJOR step forward by eBay.
I applaud Lorrie and the rest of the management of eBay in realizing that the recent changes to the Feedback Policy were ill advised, and making changes to it rapidly.
Though more information is to be forthcoming, I expect this announcement will be much appreciated by the rank and file sellers and will have them jumping for joy!
LORRIE, YOU HAVE MY ATTENTION, AND I WILL IN THE FUTURE BE MORE OPTIMISTIC WHEN YOU SAY YOU WILL FIX IT!
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.
Proof eBay Is Losing The Small Seller
For months (OK, I have been talking about this for years but only writing a blog for about a year) I have been writing about the lower volume sellers being pushed away from eBay. Many readers and listeners to our weekly live radio program ebay and Beyond: Basics to Business, as well as eBay exec’s have been saying show us the proof. In April, Lorrie Norrington, President of eBay Global Marketplace Operations said in her keynote address at the PESA/ECMTA conference in New Orleans that eBay embraces the smaller sellers, that small sellers provide the unique buying experience that is eBay.
Well low and behold I opened my local newspaper this morning while drinking my first cup of coffee and guess what I found? More proof that what I and many others have been saying for several years is happening in the real world.
In the Sunday June 8th edition of the Jamestown NY, Post Journal newspaper on the front page of the business section there is a story about two brothers that have opened a brick and mortar store because they were pushed away from eBay by higher fees and the lack of customer service.
Roy Walker, owner of the brick and mortar store The Bargain Cave in Jamestown NY is quoted in the article
“ We were selling antiques and collectibles on eBay “
, and when Roy talks about why he decided to open his B/M store he says
“ Another swaying factor in the decision to open a traditional store was the rising cost of doing business on eBay and the customer service. I was giving them a lot of money with the increased fees and they (eBay) weren’t very helpful when I needed it. I was just getting attitude from them (eBay) and started to question whether is was worth it anymore”
I have read 10’s of these articles from newspapers all around the country. This is not an isolated case as we all know. eBay is moving towards a retail buying experience, advantaging the big sellers and disadvantaging the small sellers.
When lower GMV (Gross Merchandise Value) sellers are disadvantaged on the site by being placed low in the Best Match searches, they have a much lower chance of selling their products. If they don’t sell their products they can not grow. This is simple economics.
Listen to our live ebay and Beyond: Basics to Business broadcasts from eBayLive 2008 in Chicago June 19-21, 2008
Ref: The Sunday Post Journal, Jamestown NY
eBayLive As We Know It Takes A Break In 2009
What has been rumored for months (eBay & Beyond had unofficial confirmation about a month ago) has finally been confirmed by Lorrie Norrington today in a post on the eBay Announcement Board.
Ms. Norrington states in the release that “In 2009 we are focusing our energy on smaller venues to facilitate more face-to-face interactions with our customers and community. While I can’t yet name all of the places we’ll be visiting in 2009, I can say that we intend to spend more quality time with more of you in 2009 than we have in recent memory.”
While this has been rumored for some time, and logically it makes sense from a business point of view, many loyal eBayLive attendees will certainly be disappointed. One rumor we have heard is that there may be several smaller events placed strategically around the country (world) to allow easier access by more users.
Though past eBayLive events have attracted as many as 10,000 community members this number is just a fraction of the total active registered users which according to eBay is above 80,000,000 worldwide.
We will be broadcasting live a total of 12 hours from this years eBayLive in Chicago, so if you can’t attend, you can hear all the latest news right here on www.basicstobusiness.com.
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