This article was submitted by BuildaSkill member GazLanNaThai on Monday, 24th March 2008
As per the lyrics of an old song ….
There may be trouble ahead
But while there’s music and moonlight and love and romance
Let’s face the music and dance
Before the fiddlers have fled
Before they ask us to pay the bill and while we still have the chance
Let’s face the music and dance
eBay.com logo” height=”33″ style=”width: 85px; height: 33px” title=”eBay.com logo” />As the eBay policy hammer repeatedly flattens sellers on the anvil of compliance, what choices do sellers have, and are the alternative venues ready to take up the challenges of mass influxes of disenfranchised eBay users? Or does the unpreparedness of alternative venues mean that the nomads will drift back like prodigal sons and daughters to eBay’s punishment school? Today, I take a brief look at comparing eBay to its best know UK competitor (because Ed told me he’s a bit too busy to post much this week).
My impression of eBay right now, after five years there as a volume seller and three as a PowerSeller, is that they don’t know what they want, or where they’re going.
In the last 18 months, the corporate mantra has been that they focus on buyers, buyers, buyers, to the detriment of the fee paying customers. This has been repeatedly emphasised in eBay discussion forums by the eBay staffers known as Pinks (due to the header colour of their posts in eBay discussion boards). The mantra has left a lot of paying customers feeling alienated, and has led to a lot of discussion, on and off site, regarding whether eBay is breaking any consumer protection laws with the frequent retrospective changes to terms and conditions during the live period of advertisements (auction and shop listings) already billed to paying customers.
The “changing the contract after start” mentality is also being complained about increasingly with regard to buyer behaviour too. eBay buyers are increasingly adding demands onto sellers after purchase, payment, or in some cases after delivery, and with the loss of honest feedback from sellers in May, this will only increase - possibly to the point of making the site unusable by professional sellers and businesses. I’m anticipating that by mid-autumn, even the highest quality sellers will have feedback that looks like today’s scam-artists. The truth is that the real growth area for scams on eBay, in the last 2 years, has been amongst buyers, not sellers. My own trading experience verifies this, as does countless on and offline discussions with 1,000’s of buyers and sellers in that period. Whilst the print and broadcast media love to focus on the “consumer interest” stories of scam sellers, the raw data reveals there are far more dishonest (and pig-ignorant) buyers than sellers.
Any eBay policies introduced, seem to swing each quarter-year between hammering the big sellers, the medium commodity goods sellers, then the little guy, then back again. eBay have become so image conscious about shoddy goods, dodgy sellers, IP rights over names, location abuse, delivery failures, etc, that they have forgotten how to maintain a vibrant marketplace. They’re too intent on policing the good sellers, and preventing them stepping out of line, that they have lost the vision of how to police and catch the bad sellers (and buyers). Pierre Omidyar’s level playing field is now a vertical cliff, and the fingernails of those clinging onto it are starting to snap.
When any company states in its own annual report filing to the SEC that its own policies are a threat to the business’s continuance (i.e. January’s announcements) but then refuses to withdraw those policies, then the top management needs replaced regardless of whether the policies are right or wrong, and shareholders should be asking chair-squirm inducing questions at eBay’s AGMs (where the press are banished to an ante-room). As Ina Steiner said at AuctionBytes, there are too many, too-young people in charge at eBay nowadays. I agree with her and add that there are too many big egoes in too many young heads, all vying for alignment to replace the big names as they shuffle up, or off, the corporate ladder - that creates policy crises as each tries to prove they have a better grasp of the marketplace without ever having used it in anger, and thus their understanding comes only from the flawed, or manipulated, data presented to justify earlier policies. They have no basis of knowledge created from using the sites’ functionalities and marketplaces.
All of this is a major opportunity for competitor sites such as the UK’s eBid, and the USA’s OnlineAuctions. As the UK online video tools company vzaar has shown recently, by capturing and employing Dan Wilson and Jamie Parkins from eBay UK (Jamie was head of the UK PowerSeller program for a long time), there are senior level eBay personnel seeking to move out, but stay in the same market arena. I’m sure those two are not the only ones, and it does seem to be those who operate as forum Pinks who are the most capturable - they bear the brunt of the wrath of users regarding ill-thought out policies, and realise the strongest where eBay is weakest. There was the short lived tenure of UK’s community manager Monisha Saldanha, who just couldn’t survive the barrage of anger over this year’s changes, and left after less than half a year in the post. With this month’s announcement that eBay are shedding 150 jobs around the world, there has to be some competitors looking to hook them, if not, why not?
eBay’s over-reliance on PayPal is another weakness. A major market report issued by PayPal this year proves that in all sectors of ecommerce, just as in the high street, buyers value choice of payment method more than they value payment route loyalty.
Few people have the luxury of a financial stability that allows putting all their money into one channel, it’s why cash will never die out in favour of tech-gadgets that make payments automatically. Whilst eBay’s banning the offering of accepting cash and international money orders may have been a good step towards reducing scam sales, it did far more harm to honest sellers, and proved again that eBay is intent on taking away buyers’ own responsibility to protect themselves, in other words, dumbing down the marketplace and introducing additional problems for sellers in the aftermath.
In a similar way, PayPal are exacerbating the problem by refusing to allow merchants to create blocked user lists.
When I positioned this to PayPal UK, I was told, “I understand that you are enquiring about blocking some buyers who wants to pay you or bid for your items online. I apologise but it is not available in the system that you can block methods from specific users or buyers online since this is written to the User Agreement of PayPal, however you can block their method of payments that they will made to your account but not the sender/user itself. If you offer PayPal as a payment option on eBay, you must accept all forms of PayPal payment including credit cards. Sellers may not communicate to buyers that they accept, or will not accept, specific forms of PayPal payment.”
That response is so obviously a cut and paste from several stock responses, that it is not only difficult to read and understand, but it becomes insulting to the paying customer (me) who made the enquiry. I do understand what they are trying to say, and had the responder been allowed to free-type a reply instead of use a cut-and-paste from stock responses, it would have been far more legible. To a new PayPal merchant, it would probably have caused them to close their account and move elsewhere, which appears to have happened too frequently in the past - PayPal’s own performance figures show that only a quarter of worldwide registered accounts are active. In perspective, what PayPal are saying is that, even if you know for sure in advance that a “buyer” is using stolen credit cards, you cannot block that email address. Surely this falls under fraud facilitation, rather than fraud prevention?
I can no longer see clearly what eBay is trying to do with its marketplace, and I’m not alone, many other bloggers, eBay users, and journalists now write with the same opinion as me, although, like BuildaSkill’s editor, I write without pulling the punches that others do.
Amongst eBay’s competition, at least we know the strategies in place - to slowly and managably grow their marketplaces and memberships, relying on good will, word of mouth, and lack of controversy to secure long-term loyalty and business growth. This will neccesarily cause periods of famine and feast for sellers, and the less loyal to blow in and out with the breezes from eBay.
It’s why I say that sites like the UK’s eBid, need programs to leverage and empower existing trusted sellers (or power buyers) of long standing, to take the sites’ messages to those who would otherwise consider eBay as a potential extra sales channel. I’ve long believed that one of the market sectors eBid should concentrate on, is a package for existing small bricks & mortar niche stores wanting to get onto the Internet.
There are enough tech savvy people amongst eBid’s membership, that some sort of “eBid trading facilitator” program could be set up where “approved” trainers could be booked (and paid) to teach B&M stores how to use eBid. A program like that could seriously boost the listings count, and with that level of choice, the site would have more stickability to the casual visitor. Unlike the eBay Trading Assistant program, a trading facilitator program could be geared to target B&M niche stores in those product sectors where the sponsoring site has weak numbers of listings and sellers. This would build balance and depth into the offerings on the site.
At one time, eBid had over 60% of it’s listings in just two top level categories - clothing, and music & movies. As the management adjusted the categories and new sellers moved in, that balanced out a bit, and eBid did carve a niche for itself in several areas (e.g. Spirituality & Metaphysical). To me, eBid has always seemed a bit low in areas like Art & Antiques, Collectables, and Toys & Games, where eBay regularly saw the best sell-through rates and prices achieved. I notice eBid are starting to fill up in these categories now, but slowly, and they need to be having marketing drives specifically for those.
As the balance and choice improves on non-eBay sites, the buyers will follow. However, it should be remembered that for best search engine leverage, it will be the unusual and unique that drives growth, not the commodity items. One of my pet gripes about eBid has always been a lack of focussed promotional campaigns (the site isn’t big enough for TV campaigns yet, and the name is too close to eBay’s to use for radio campaigns - they’d cause listeners to go through to the larger site if the listeners weren’t sat at their keyboards when they heard the ads).
In an example where someone searches for “woman’s ball gown black size 12″ eBay’s marketing and SEO muscle will always win out over smaller sites. But, for searches such as “reproduction Roman denarius coin 4th century Hadrian” (or similarly esoteric) eBid and other smaller sites have a very real chance to defeat the San Jose giant - if they market to sellers in such niche avenues.
Although in recent years, eBay management have denied they’ve ever had a focus on seller acquisition as a route to site growth, eBid has always maintained the age-old philosophy that wherever vendors congregate, there will a marketplace be built. It’s why their entire structure is built to encourage sellers to list on the site, and why the fees are so advantageous to those. It’s a model that hasn’t hurt Amazon sellers either - especially the store-sellers who pay a fixed monthly fee and can list as much as they want without additional listing costs. TazBar are following that Amazon subscription model, but eBid prefers the lifetime subscription route, and so do their sellers.
Each experienced seller that joins any non-eBay site is sure to bring a portion of their customers with them, and the challenge now is to prevent the sellers jumping from eBay’s ship going straight into solely their own website, but into using the smaller auction sites’ lifeboats as either an interim or permanent step.
Nowhere is this more important right now than in the USA, where there is an official recession after two quarters of negative growth - the fee savings that casual and professional sellers can make on eBay alternatives with long-term market strategies needs communicated to them, by people already using and succeeding on those sites.
Before the fiddlers have fled
Before they ask us to pay the bill and while we still have the chance
Let’s face the music and dance
Soon we’ll be without the moon, humming a different tune and then
There may be teardrops to shed
So while there’s moonlight and music and love and romance
Let’s face the music and dance
Gaz
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