Sunday Papers 26 October 2008
By Ed | October 26th, 2008 | Category: Week's End |
This week in the Bloggosphere and beyond … Put the coffee on, grab a croissant, and settle back for the news round up. Remember if you’re in the British Isles or Western Europe, you need to reset your clocks today.
Bloggosphere
Henrietta over at RedInkDiary ran a stunning post yesterday regarding the level of counterfeit goods that appear on eBay. Seems that globally, eBay “provide the forum for 29 percent of the entire online counterfeit market”. She also posted an amusing and interesting post about ProPay and reiterates that it’s not just that it’s not available to overseas sellers, it’s not usable by non-USA buyers either.
Trading Assistant Journal’s Scott Pooler wrote a very interesting mid-week post regarding visitor traffic and how despite engaged and enthused seller communities, many eBay competitor sites are struggling for page hits. He analyses the success factors of early-eBay and relates them to today’s eBay competitors. He makes a particularly strong point about traffic-feeder systems such as search engines and affiliate programs. eBid (see story below) should also note the part about a global marketplace.
On Friday, Randy Smythe made me chuckle. He’d run a post looking at ebay’s latest site monetisation wheeze for seller advertising (good selection of comments by the way), and followed it up immediately with a post about Oprah pimping the Amazon Kindle. Randy, in best Randy style, jumped on the discount available by using the coupon code that spun off from Oprah’s endorsement of the product on her show - read Randy’s post - it’s a classic marketing leverage.
Amazon Strategies (nice site template - wonder where I’ve seen it before 
) ran a worrying review of a new policy from the river - they’re applying the whip to 3rd-party sellers’ photography skills with threats of suspension for not being a David Bailey or Lord Lichfield. It’s a little out of order in my opinion, but as we say about eBay, it’s their playground and you have to play by their rules if you want to be in the game. here on BuildaSkill we’ve had photgraphy sections in the blog and the forums since day one - they continue to be the most under-read and under-commented sections of the site. You’ve now got a reason to use them.
Blog quote of the week
Honours this week are shared between Randy Smythe in his Blog Utopia post on Tuesday, concerning eBay’s Diamond PowerSellers (well worth reading in full), and Skip McGrath’s summary review of ProPay’s new offerings for eBay sellers.
Randy said, “There is not enough demand on the marketplace for the existing group of sellers plus Buy.com, what makes eBay management think adding another 20 large retailers will do to the marketplace … If anybody from one of these Internet 500 retailers reads this blog, do yourselves a favor, contact me and get the real story before committing the resources to selling on eBay.”
And wonderful visualisation from Skip, who said, “If I have learned one thing being on eBay, don’t rush into new services until they have had some time to percolate on the site. Jumping right into ProPay now, would be like taking a cake out of the oven five minutes before it’s finished baking. It will still be a little soft and mushy in the middle. I also want to see what the other services will be and how PayPal integrates with PayMeLater whom they just purchased.”
Sage wisdom indeed from both of them.
Discussions & Forums
“The Best Match for eBay is the one to light the demolition charge fuse” said one of our readers recently (on another site) and it set me thinking. I pondered all that has happened on eBay this year, and remembered the purchase of StumbleOn. “Ping!” - enlightenment dawned. Secretly eBay have been replacing product categories and a functioning search system with StumbleOn logic. Think about it. Consider all those notices and announcements about stripping the best of eBay Express for integration into the main site, and the recent announcement concerning how the purchase of the Danish Pastry shaped like Mother Theresa classifieds site would yield additional technology to enhance the core site. Well, maybe that’s exactly why they bought StumbleOn? It’s certainly how search and browse have been behaving lately. If eBay manage to sell StumbleOn, will search return to normal? Here’s hoping so.
In last week’s Sunday Paper’s, I mentioned how AuctionBytes ran a blog survey of who should replace John Donahoe as CEO of eBay. I’m sad to report that no-one nominated me for the job. However, I have since learned of an online petition to have him removed from the position. If you’re in favour of that as an option, add your name and comments to the petition here, then drop back here and add a comment to keep us updated on the number of signatures accumulated.
Online Channels & Venues
One of the most under-reported hot topics this week has been the new policy on eBid. As any regular reader knows, I’ve long promoted eBid as the prime alternative to eBay as a traditional all-comers auction site, especially in the UK. With 18 sites open around the globe, they have a larger presence than other single-site competitors with larger user-bases or numbers of listings, yet despite this global growth, eBid have now decided to block all visitors not resident within their site-countries.
This news reached me via an email forwarded from eBid Customer Support mid-week. A long-standing eBid user had, like me, been querying why they could not access the site and there appeared to be a server level block in place. The response from eBid CS (and this is a direct quote from the email) said -
Hi xxxx,
Thousands of users around the world are blocked from using eBid depending on many fluid and every changing criteria. Location being one.
Please confirm that you would like to close your account with id : xxxxxxx
Best Wishes
eBid Support Team
That is one aggressively anti-customer email. Even eBay has not been dumb enough to block users from countries in which they do not have sites, although PayPal used to do that about 5-6 years ago. Could this new policy have been born from an arrogance caused by so many eBay UK sellers migrating to them under the new eBay regime? Discuss eBid in our eBid forum. I can’t help feeling this will be a self-defeating move by the boys from Surrey, UK, especially with former contender CQout making a resurgence.
Six months ago, when I had a nosy at CQout, their listings total was down to around 250,000 and the place was like a ghost town. This last week, I revisited them and noticed total listings had surged to 880,000+ with a very strong showing in Books and Clothing. Also, for the first time in a long time, I noticed listings with multiple bids on them. I’m not saying to shift all your inventory to CQout, but it may be worth having a dabble on there again, and watching how things go - they’re obviously fast catching up with eBid, and could regain their advertised status as the UK’s 2nd largest auction site. Discuss them in our CQout forum.
Bonanzle is starting to get mentioned all over the Internet. There’s a real buzz about the name, and it helps that founder Bill Harding is also out and about posting on the blogs instead of leaving it all to the site’s users. Whilst BuildaSkill had our own traffic ranking milestone this week, Bonanzle also crept into a seriously high ranking position too - only a couple of months after official launch. Check the Bonanzle news in BuildaSkill’s forums.
Webifying
We’re playing with an Open Source (OS) free software called OpenX. It’s a specialist server software for managing affiliate banner advertising across multiple websites. I have to say that so far so good, though I was peeved to discover a security upgrade was released days after we installed it, and we had to upgrade - but one learns to live with such incidents when using OS software. I’ll be back to review the application later in the year once we’ve got it fully up and running.
Watch for improved advert-serving across the BuildaSkill site, delivering advertising more relevant to page content, including geo-targeted offerings, and a much bigger range of advertisers, including offers specific to BuildaSkill readers. We hope to start serving the ads fully from OpenX around about Halloween - it’s not a quick implementation, nor is it for the technologically faint-hearted. The ads you’re seeing within the blog today are coming from OpenX - post a comment if you’re seeing any not relevant to your location, it’ll help us to fine-tune the system … next step is bidding for the ad management contract on eBay (snigger).
World Affairs
eBay announced on Monday that from the New Year, the sale of ivory products will be fully banned on all sites, with the exception of 100-year or older “antiques” whose composition contains a minority percentage of the material. Richard brewer-Hayes of the eBayInkBlog scooped the official eBay Announcements Board with news of the ban - eBay seem to be using that channel more and more often for breaking policy news to users. The International Fund for Animal Welfare claimed the credit for pushing eBay into this decision.
The story was picked up very fast by the New York Times and by the International Herald Tribune (”Bummer!” thought I, “It could have been my late-autumn freelance project”) but I decided to do some quick research, and storage for the future, anyway. I came across this wonderful story from Africa - it’s completely off topic, but a “must-read” for anyone with any degree of fondness for elephants, especially baby elephants. I’d also like to credit GazLanNaThai for introducing me to the topic of “Vegetable Ivory“. It comes not from mentally subnormal pachyderms, but from a specific palm tree nut … there’s a cue for a pun there, but I can’t think of suitable one for linking eBay policy and nuts - post yours in the comments below ;).
Did you know? GazLanNaThai lives in the home town of Thailand’s ousted prime minister Thaksin Shinawatra, and that the ex-PM was convicted of abuse of power and sentenced to 2 years imprisonment this week - in abstentia. The former Manchester City soccer boss is currently in exile in London. Here’s hoping there’s no repeat of the mass riots and casualties from Bangkok a few weeks back, on Gaz’s doorstep, especially considering some of the things he’s previously posted in his own blog. Ties in nicely with the 2 years that Thaksin’s wife was sentenced to, for corruption, days after they supposedly went to Beijing for the Olympics, and because of which she’s also in exile with her husband. Maybe they could be given a twin cell if the extradition currently being sought is approved by HMG?
Looking Ahead
The hammock beckons - happy reading everyone.
Ed
It should be clear, I am a wholesaler and not a good writer or a stock expert, but I have a first hand inside look having been a powerseller almost from e bay start, for over 10 years, 1.7 million per year sales and account for $156,000 paid to e bay per year for seller fees, this is the bases in which e bay shows profit or loss in a great way for there core business, this does not account for paypal fees charged, seller manager pro, e bay stores. Buyers and sellers are leaving e bay, this can be proved by http://www.sellerdome.com/
It is interesting how the 1500 employee lay off received so much attention, however, OVER 10% of total powersellers were laid off/suspended because of flawed aggressive policy poorly implemented has not had a placement. This is proved by http://blog.sellerdome.com/?p=16 between 15k-30K e bay powersellers who account for $3000-$20,000 in seller fees paid each month for each of those sellers. This seems a larger story than a simple layoff of e bay employees. Ebay saves money by laying off paid employees, but e bays profit takes a hit by getting rid of partners who contribute to e bay profit. For example: 20,000 powersellers/partners laid off/suspended that account for an average of $5,000 per month seller fees = $100,000,000 each month in seller fees not received by e bay. That is $1,200,000,000 per year in revenue given up for aggressively flawed policy by current management. The idea current ebay management had was by getting rid of 10% of its selling partners was going drive back 32% of its buyers, however, that has clearly not been the case, because the policy change was flawed and implemented with such aggression over a short period of time, 6 months total, 3 months aggressively. Ebay seems to have driven away buyers by this and the new search method that sellers or buyers don’t like with no concern of management. The company has managed to drive its investors away in the same motion as stock prices show a drop since new management put in place 6 months ago, before market crash. Ebay management charged its sellers/partners for decline in its core business and seems not to have taken into account the increased competition of walmart, best buy, circuit city and many others putting marketing dollars into the online sector of business. Ebay pushing away its partners, sellers and buyers, is only going to make profit softer and push away investors. With 70% more competitors in the market e bay only dropped 30% seems a strong market hold for e bay and a reason to support its partners in a currently working policy rather than place blame partners and will prove to decline its future market share which is pointed out by many market analysis.
Ebay, through the wild west style new management, took a look at itself and realized it had a drop in the number of sellers buying on its site. It decided it was because of bad “buyer experience” and immediately, it seems without full thought of backfire, decided it was the sellers fault. In some cases, this may be true, but it is most likely because of the additions to online retailers such as walmart, bestbuy, circuit city and the lis t goes on that were not competitors before and had not sunk the marketing dollars into the Internet sector of there business plan before. The more big sellers the less customers for ebay. It is widely known that e bay has blamed sellers rather than external forces for the slow in sales. Instead of working within the community, that once believed that people are basically good, took on a policy that made its community fell like criminals and strong feelings of dislike for the symbol that was once regarded. Ebay has aggressively pushed away its partners will prove to decline its future market share and a relationship that may go un repaired when new management is called upon.
Ebay has withstood the .com storm because of a superior system and its ability to hold steady to the working core business policy. Its customers fell that is no longer the case and many companies like bonanzle.com and OLA.COM (onlineauction.com) are rushing to try to meet seller and buyer demands that ebay seems unwilling to meet. Many small auction sites have tried to compete in the past but been successful in driving traffic. Now a once complacent audience of e bay buyers and sellers are seeing the changes and the likely hood they are being driven away through aggressive, unfair, flawed policy changes and are taking note to change to someone with the old values that made ebay a community that worked. You can see from the chart below the demand that is being driven to for example.
http://www.quantcast.com/bonanzle.com
This is a small amount of buyers and sellers compared to e bay, but it does show a market who is hungry to meet the demand of current buyers and sellers, and what is maybe most important that buyers and sellers are finding the ability for change.
When e bay was a “venue”, now it is felt by many of its sellers that it acts as an employer or landlord by design of new policy, it was profitable for sellers and a great value for buyers. Sellers drove traffic to the site because buyers knew they could get many of the items for a large percentage below retail, at or below wholesale. E bay is a follower now and is trying to make itself like Amazon and other .com retailers. Ebay sellers who use Amazon report little to no sales. E bay has a niche (wholesale products) and Amazon has a niche (books, CDs with unmatched distribution etc) and both worked independently of each other, this is why Ebay sellers are not successful on Amazon and Amazon sellers are not successful using ebay. New ebay management has had a hard time realizing Amazon is a different market plan. Many e bay sellers are leaving to do Amazon but it is feared this will not prove successful for them. The e bay system worked and most were satisfied, buyers and sellers could realize other bad buyers or sellers.
Buyers and sellers are not happy anymore and the numbers will continue to show as long as this management stays. Economy will play a roll, that is why ebay can’t afford to gamble with management that has proven to drive its partners, sellers and buyers, away. The company is large enough it will be around for a long time, maybe not in the online auction sector effectively as it was before, but it is still a mystery to many who use or used to use the site why this management has been allowed to make this aggressive of a change. If this is where they wanted to go, it would takes years to change a company this size effectively, it can’t be done in 6 months times and certainty not given a slow in the economy.
Things are not happy under new management/John Donahoe management has made no one happy, sellers or buyers or its investors. It has been a 6 month meltdown since new management fumbled a working system.
I talked to the owner of onlineauction.com 1-800-900-2828, Rowen Grisham, a previous e bay powerseller who seen improper change coming long before many sellers and buyers realized. He said he had seen a flood of sellers and buyers calling to learn about the site in the last 4 months. Rowen Grishamw says they are about to roll out a goggle search program that will make it more visible. This is just one example of where e bay buyer and seller base is going. Grisham seems to want to supply its sellers and buyers with a fair service, as when the ebay site was born and acted as a venue rather than an employer. Small companies that are hungry and taking advantage of a situation where ebay is not satisfying its demand.
Anyone considering investing or putting time into future sales may want to take a look at the aggressive, flawed policy’s they have put in place, there are little to no direct policy as there has been. Sellers, buyers and investors wouldn’t be leaving if there was any good reason to stay.
E bay has done a poor job or emplaning the new changes to its buyers, sellers only after a few months of effect, some loosing there e bay business because of improper, unmonitored data, is still learning and it seems no one knows the answers even at the top account managers level. Its buyers do not realize that the DSR DETAILED SELLER RATING, the 5 stars under the feedback rating is not based on a 100 point scale like every other system in the free world. For example, from 1 to 5, 1 is poor, 3 is average and 5 is excellent. With e bay, 4,5 is average and 5 is good, I am glad they didn’t have my math teachers in Collage. So many times buyers rate a 3 when they don’t realize they are giving the seller a unacceptable rating that could potentially suspend his/her account from e bay as so many has been suspended in the last 3 months because of improper data that has been now used as the bible of e bay to rate seller performance. It should also be noted that a flaw in the data of the 5 star DSR is that if a customer is happy, they fell that leaving positive feedback served its purpose and they have caused a positive vote to the seller, e bay has not educated the buyer, so they do not leave a star rating at all, and are not required to and a large % do not, but leave a positive feedback as it is not required. But the buyer who is mad and is leaving hasty feedback will be more than motivated to leave a 1 or 2 for all stars. For this reason, good sellers offering great service and products are being suspended from e bay by record numbers, this cuts the life cord of the seller as well as core business at e bay and the reason buyers come to the site and investors invest in the company.
Ebay may have ruined their market flair for both buyers and sellers forever. Too many restricting rule changes, increased charges, paypal demands, seller ratings. This has ultimately destroyed their bottom line.
Don’t think eBay and its payment system engage in unfair, at the very least unethical or even illegal business practices? Retailers are asking for congress to crack down on organized computer crimes, but eBay, said “they would be unfairly targeted in the proposed legislation” Read article from link below:
http://news.moneycentral.msn.com/ticker/article.aspx?Feed=3 DAP&Date=20080922&ID=9174700&Symbol=EBAY
http://www.ronpaulwarroom.com/?p=1751
Many sellers, buyers and investors alike have a dedicated special interest and hope they turn themselves around, but it is going to take some quick and correct policy change back to the system that worked to undo what has been done in what would be considered by many as well as a powerseller account manager in a telephone conversation said that this is “the most aggressive change e bay has ever done” it is costing sellers there business and driving buyers away from the site. The Best Match search is fatally flawed and $0.35 listings are not going to fix that.
Sellers of the unique items that made eBay famous (and who paid listing fees) are leaving in droves, while eBay brokers deals with corporate sellers of new stuff you can get anywhere who don’t pay listing fees deteriorate the profits. And their buyers are following them. Watch the Q4 and Q1 figures. A company of this size can keep up appearances for some time, but its customers, its customers customers, that is sellers and buyers, are speaking up and cannot be ignored in the long term, the leader of these policy’s are and continue to drive away the core business of e bay and investors are taking notice.
E bay bought Bill Me Later, I would have been surprised just 6 months ago, but I am unhappy to report that I am not at this time, the reason is this management has taken down the tread that holds e bay together as can be seen by its buyers and sellers everywhere complaining about the flawed aggressive policies that have taken place over the last few months, maybe you have heard some of them or are one of them. Every comment citing that the previous system was not broken. E bay has had community and trust, this 13 year trust has been violated and has failed both sellers and buyers in just a few months of unfair, faulty policy change that has taken a ship this size and turned it so fast that it is out of control and is facing a challenge to bring the ship back to course as it was before in the core business, although still ignored by management at this time, this is just in the core business, this shows the danger of a lateral move like credit right now. Take into account there could’t be worse timing as the world economy will not view this favorably given recent events. This policy change was over a short aggressive period, but the negative impact will make it difficult to navigate back in position, if this venture is not successful, it will be even worse for ebay, its investors, and20the management that follows. The core business has taken a great hit world wide, now it is committed to a market that is new. A new market during the time when its core business is in jeopardy due to flawed policy and a slowed economy with management proven only to drive away customers. This will prove a challenge that may take years to repair relationships of its sellers and buyers when it has been realized by investors concerned on top of unpopular credit service. Migration back to the system with effective proven 12-15 record, built by previous management over 12-15 years, seems to be the only way to save the future profits and stability the company once enjoyed.
So, e bay wants its investors to trust it in a huge risk buy, when the investors are clearly concerned and most can see that e bay can not run its core business in a way that is satisfying to its customers, causing them to leave, look for other suppliers that will eventually be able to meet demands of the once complacent sellers and buyers. Sorry, it would be hard for anyone with basic knowledge of the problems with recent policy of the core business to buy this, having been a seller and buyer for 10 years, it makes it even harder to buy. I can say, I am happy to report my family, who bought stock when they=2 0seen my success on e bay, sold there stock when I explained the new managements flawed, unfair, and aggressive policy handed down. The stock has followed since this and many are betting with there dollars fell it will continue to fall. Maybe Jim Cramer, hyper as he is, has a point when he said he could not get behind the company, and that someone should buy the company “and put them out of their misery.” It is hard to argue with him, stock sold back in march, when these policies were being talked about, not yet implemented agressively, sold ebay seems to be the smart move. Stock was $30-$32 per share at that time, March 2008, it dropped every since as can be tracked from any stock quote chart. Yes, the economy took the abrupt hit, stock price had already plummeted by 1/3, $19-$22 per share, before it happened that our country was in trouble from bad credit/debt. Some say they wouldn’t want to touch this a credit market at this time. I would also not want to answer to shareholders when they learn what long time sellers and buyers have seen in the past few months. Good thing for golden parachutes I guess, maybe that will soften the fall?
I think this report on NYtimes has some good in site of the problems facing the company with the current buy:
http://bits.blogs.nytimes.com/2008/10/06/ebay-plays-warren-buffett-buys-online-lender/#comment-55807
There’s many great reasons why Bonanzle is getting mentioned over the net! It has the soul of old Ebay. The sellers are in charge of their own business. You have people like Bill Harding and Mark Dorsey that are working with us day and nite. They actually respond to our emails! IMAGINE THAT ! Human Contact. Buyers have the ability to choose their form of payment . We could go on and on… check it out for yourself and you’ll know why we are all becoming happy campers again!