eBay appear to have rolled out the 18-inch naval guns to shoot their own feet again.

This month sees the switch from being reliant on Commission Junction (CJ) for management of their Affiliate Marketing scheme, to taking it in-house with the eBay Partner Network.  Last month’s announcement was full of hype and spin about improved benefits and flexibility for affiliates, but already long-standing CJ members are complaining of being refused admission to the new Partner Network.

Universally, those refused membership appear to be marketers who are also eBay sellers that at some point have crossed swords with eBay, and been labelled “bad boys & girls”.  This includes sellers and PowerSellers who have disagreed with eBay staff in the eBay forums, then been “sanctioned” (banned from posting in forum) by eBay’s 3rd-party forum moderators “LiveWorld”, through to marketers whom eBay regards as having either competing or “eBay-unfriendly” websites. 

Additionally, “good” marketers whose status of registration falls under “3rd-location” residency are being denied entry to the Partner Network.  These are affiliates who have business and banking registration in one country, but reside and operate in another.  One would think eBay would be thoroughly comfortable with this concept, especially with all their European subsidiaries owned and financially managed from a holding company in Luxembourg, but nope, what’s good for the goose is not good enough for the ganders.  Swathes of ongoing CJ affiliate marketers are being locked out of the eBay Partner Network.

All of which creates a chasm of opportunity for eBay’s competitors, but which, based on historical evidence, few are likely to grab …

The thing I’ve noticed about online sales venues is that mostly they break the mould of traditional income:expense financial modelling.  It’s a peculiarity of the Internet.  Apart from eBay, most of the long standing competition are those with “effectively free to list” fee models.  It’s the ones who jumped straight in with across-the-board fees in place, that have disappeared, and it’s the ones who embraced affiliate marketing that have most benefitted in recent years.

The most successful and long-standing eBay competitors are those that eschewed listing fees in favour of success fees, however, with one exception, they mostly have suffered from site names that are not memorable, and in the case of the exception, their name is too close to eBay’s, and I’m sure that’s damaged them in marketing with message-receivers diverting to the larger site due to household-name syndrome.

Another area that has caused slower growth in the smaller sites individually, seems to be that most of them are founded by technicians, not marketeers.  By this I mean they seem to spend too much of the growth phase focussing on the site features and structure, and not enough on getting the message out to would-be users.  TazBar seemed to break that mould, but I think they mistimed.

If TazBar had not launched in mid-2006 (on the back of the “shops in core” debacle on eBay) they could have aimed for a more propitious launch-point, which may have gained them more sustainable initial momentum.  As it was, there is an underlying thinking that TazBar was yet another angst-competitor similar to the many we’ve seen launch since late January this year.  The very fact they seem to be “doing an eBay” causes support for that line of thinking.  There is little to differentiate them from eBay, and a lot of that must lie with the founders’ origins in ecommerce (being all ex-eBay powersellers).

eBay competitors need Unique Selling Points to differentiate themselves - here’s some examples -

Niche sites

delCampe - Philately and postal memorabilia only.  By far eBay’s largest competitor in this field, and actually far bigger than eBay in it.  Unlike eBay, they leave it to sellers to choose if they want to be seen across all sites, or only on their home site, and this without an International Listing Visibility Fee.

Etsy - Crafts and handmade items - rapidly overtaking eBay in this product area, but becoming a little image-conscious in the buyer complaints arena.  They seem to be becoming a little too influenced by eBay policies in failing to allow buyers to take responsibility for the buyers’ own decisions, and have been reported lately as punishing sellers for buyers unwillingness to exercise due diligence when purchasing, and for buyer-impatience regarding shipping conditions clearly laid out by sellers, that the buyers refuse to read or comprehend.

WargamesMarket - has “stolen” 90%+ of eBay’s sellers (and listings) and is growing rapidly with buyers - they founded within the last year and have already destroyed eBay’s marketplace for these products.  (average UK list count in (one example) 15mm tabletop down from 7000+ daily average, to 600-700 daily average).  Also, they are doing what eBay was never able to do - they are pulling the home-industry wargames manufacturers into trading online (other than on their own websites), and are receiving approval, and listings, from the larger, international, wargames companies too.

Non-Niche

eBid - Lifetime memberships and free multiple shop identities per seller account, with automatic cross promotion between the shops.  Something eBay have been asked for, for years and have failed to provide.  Also, each listing is available on all sites by default if the seller selects this - something eBay used to offer, but is rapidly removing in order to gouge yet more fees.   Additionally, sellers have a much more detailed choice of which countries they will and will not ship to - they can exclude the notoriously bad Italian market while keeping other European countries for example. 

eBid has always been held back by lack of a good, offline listing tool, now it’s under development, eBay should be very concerned and look again at their business model.  Tazbar (and others) could be finished off when that eBid tool goes live, leaving eBay UK with a single, focussed, general auctions competitor, and a far bigger threat because of it.

Amazon - no chargeback risks to sellers, multiple account types to fit most sellers business models, universal presentation style for the company’s own products and 3rd party sellers’ products provides a unified image, with most buyers not differentiating between Amazon stock and 3rd party stock.  One monthly subscription option with no further up-front fees (ideal for volume listers).  It’s no wonder that Amazon have been capturing eBay market share (and buyers & sellers) hand over fist recently.

At the end of the day, Amazon’s model is a little different to all the others - Amazon itself trades product on its site, in competition with its 3rd party sellers, and that doesn’t harm them.  eBay, TazBar, et al, could be doing the same - they could leverage marketing muscle and market position by taking up with (for example) software companies on a drop-shipping basis.  The profits from such trading could be used to stall fees growth, or even to partly offset fees and cause a reduction in them.  I suspect that currently, both etsy and wargames market are doing similar - they’re both enthusiast marketplaces and for the owners to get into them, they must have an interest in the sector’s products and be trading them, though whether on the owners’ accounts, or on the sites’ accounts is another story.

It’s impossible for any non-global (and by global I mean the likes of Yahoo, Virgin, Microsoft et al) to create a start-up to take on eBay head-to-head.  What they’ll all do is nibble at the edges, fragmenting and diluting the marketplace, and causing even more panic reactions (fee increases and seller punishments) from eBay.  I’ve said it before, and I’ll say it again, new entrants MUST go niche.  They cannot succeed with a general marketplace against eBay.  It’s too late to attempt that, and they’d be better off supporting the existing players if they want to go down that route.

The likes of TazBar, CQout, QXL etc fall into what I refer to as 3rd tier markets.  Right now, there are very few 2nd tier players - eBid is just edging into it this year, OLA in the USA have just entered it, and there are a couple of others, mainly in the USA.  Up in the first tier it’s eBay vs Amazon and that’s it.

However, the more that eBay continues to segregate its national marketplaces, the greater the risk of each dropping from 1st tier to 2nd tier or lower (most of its Asian markets are actually 3rd tier on their own, and only get 1st or 2nd tier ranking due to the global identity of the parent).  When looking at individual eBay countries, only the UK, US, and Germany are tier 1.  Many of the others, including Canada and Australia are tier 3.  Tiny little Belgium, is actually a bigger market than France right now, and both of those are still tier 3, about on a par with TazBar - way smaller than eBid.

eBay New Zealand was effectively killed off and shut down, several years ago, by independant all-categories auction site TradeMe.co.nz - however, TradeMe pulled a lot of revenue from online dating and property location services integrated to the site (there’s that niche angle again).  eBay never did get more than a little finger into the NZ market and ended up pulling their site, keeping only a portal there that redirects into the US site.  Australia is in serious danger of going the same way due to the avalanche of competitor sites opening up down under, especially the reverse-auction sites (where buyers pay to place a bid, but it’s the lowest bid that wins - the site then shares the buyer fees with the seller), but Oz is too valuable a test bed for eBay - look at all the policies announced there, that I predicted would go global, then did so.

I still feel TazBar is still trying to be too much “same same” as eBay, and that they’re going the same way with fees too.  They don’t have the membership mass, or momentum, to be “doing an eBay” - and if they don’t take care, they never will.   This is the opposite of eBid’s free-to-list strategy, and it shows when comparing growth between the two sites.

In my book, TazBar should try a brave move such as cutting back fees now (to gain growth and momentum) but announce (for example) a five-year plan for fee introductions/increases, and stick to it.  That way, they can attract memberships, build volume and trade, gather fees at future points that sellers can plan for, and avoid the “greedbay” tagging that the big site generates.

For several years, eBid have offered an affiliate program via ClixGalore, which has been very much an on-off-on again one.  Very recently they bit the bullet and began offering affiliates a higher share of the revenue from CPA adverts via the Google Adsense Referrals program.  It seems to be paying off for them.  The power of marketing replication via an easily accessible affiliate program really does work.  eBay seem to have forgotten that fundamental.

The new eBay Partner Network is not only being extremely picky about who they accept (reducing their marketing network) they also are earning the reputation of requiring affiliates to have active eBay accounts.  Whether this reputation is founded correctly or incorrectly, early online discussions off-eBay are reinforcing this and it will cause a great many CJ affiliate to simply delete eBay from their program list and not bother attempting to join the Partner Network.  This will create large holes in many websites that will be crying out for replacement ads and advertisers.

Now is the time for all af the tier 2 auction sites to make the marketing push to have programs with CJ and fill the voids eBay have created this month.  It is also the time for the larger tier 3 sites to do the same.  Leveraging the marketing multiplication effect of affiliate programs is critical for the smaller sites too. 

In-house marketing and SEO efforts can only go so far.  As some of the newest sites are discovering, personal member blogs in site (similar to eBay myWorld blogs) are essential marketing tools for social networking.  Many continue to rely on member-support forums alone, which is better than nothing, but for those without blogs, an affiliate advertising program is now more essential than ever, to take advantage of eBay’s alienating many of its longest-supporting ad publishers.

Ed

 The BuildaSkill Affiliate Agencies List
 The BuildaSkill Affiliate Marketing Forums -
  ClixGalore, Commission Junction, Shopping Ads (3rd party route to eBay affiliateship)
 The BuildaSkill Online Selling Forums -
  Amazon, CQout, delCampe, eBay, eBid, Etsy, QXL, TazBar, WargamesMarket

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Whilst the seller community still reels at the changes introduced by eBay this week, competitor sites have not been slow to react.  Many are directly marketing to eBay’s paying and non-paying customers in the hope of cashing in on the predictable upset and anxiety caused by some of the most radical policy shifts to ever come out of San Jose.

In the UK, where sellers have displayed not just angst, but anger, exasperation, and despair, several established home-grown sites have been quick off the mark.

eBid Auction Site” height=”53″ style=”width: 63px; height: 53px” title=”eBid Auction Site” /> eBid.tv are traditionally the biggest UK winners whenever eBay upsets its sellers.  The site received huge membership boosts every summer between 2003 and last year, and in 2007 introduced the facility for each seller ID to have up to five shops without charge, directly in response to seller requests.  eBid have long been regarded as the site most responsive to member requests and the fact that their founders and CEO regularly participate in the community forums demonstrates a hands-on and open-door approach to management often said to be lacking at eBay.

For eBid to be the biggest winners is strange, as they rarely conduct any off-internet marketing.  Instead they concentrate on on-internet finadability, and encourage their members to market the site for them.  Although often accused of generating too little traffic, it is a formula that seems to work, and frequently the traffic levels are masked by a high level of Buy Now bids, due to that feature being free to add to auction listings. 

Their January newsletter stated that from mid-2007 to late-2007, they saw an increase of sold item value (eBay calls it GMV) of over 50% in the UK (their largest market) and over 220% in the USA (their second oldest market).  They have also recently expanded to now possess 14 country-specific sites around the world, and introduced a business seller programme, which does not invade home-based seller’s privacy, in the way that eBay’s new rules changes do.  I can’t wait to see what their February newsletter has to say about eBay machine-gunning their own feet, particularly as their community forums are already seeing an influx of new buyers and sellers equally feeling disenfranchised by last month’s policy shifts.

 Meanwhile, new kid on the block, Tazbar have been quick to react.  Their scheduled Feb 1st newsletter, originally intended to reinforce the handover of ownership back to the original development team (of disheartened former eBay PowerSellers) and leads with a statement to that purpose.  It also continues with a multiple point comparison between TazBar as an online auction site of traditional methodology, and how thay have not deviated from a known-good system in the way that eBay has.  Further, it also reminds readers of the new TazBar Fundraisers (charities) program that we blogged about here.

It’s going to be interesting to watch these two sites battle for the eBay disaffected, and it is to be hoped that they do not lose out to Amazon and other larger sites that are rumoured to have gone on the offensive since the announcements in Washington DC.  We’d like to hear your thoughts and news about them, in our forums.

Over in the USA, Auctionbytes have been in the thick of reporting and analysing the announcements and the fall out from them.  Ina Steiner, the editor at AuctionBytes has also been monitoring the competition circling the eBay wagons, picked up on the TazBar news above, and blogged about epier.com’s initial manoeuvres. 

ePier? They’re a new one on me.  Their announcements board goes back as far as March 2005, and includes mention of newsletter #28 - it would therefore seem they’ve been around for at least 4-5 years.  Their site has the good old traditional look that eBid threw out about 18 months back - lots of stuff on the front page, that makes it a little confusing to the novices, but is “quaint and intriguing” to old-hands at the online auction game. 

When looking at an online venue for the first time, I like the costs to be upfront and in my face.  If it takes me more than six clicks to find them, regardless of the viability of the site, it gets ditched.  ePier’s fees are not quite where I’d expect them to be - in the main FAQ’s or root of the Help pages - they’re in the ambiguously titled “Sellers” section.  That name, at first had me thinking it would be some sort of mySpace, or eBay myWorld, gallery of members, maybe something for them to think about?  I then had to click another two times before finding the fees.  Basically, they are free insertion fees, and tiered final value fees, and a very short list of enhancement fees.  ePier is intriguing enough that I’ll go back and have another look, then blog more, once the dust has settled on the eBay changes.

Craigslist has been getting more and more mentions around the online selling world this winter.  If you’ve never heard of it, it’s now a global phenomenon and a charitable foundation that’s free to use for classifieds style listings (listing duration is from 7-30 days in major US cities, 45 days elsewhere, or until event expires for events listings).  The site appearance is effectively “plain text” and some have described it as “godawful on the eye”, but it works, is free of the graphics-led slowness (except within adverts, which can include pictures), and is truly global.  It’s extremely popular with people on the move due to the plethora of cities within the short-term and holiday accomodation categories.  I rate it as an essential side-channel to other marketing channels, and a primary additional line for any accomodation, real estate, or vacation type selling.

Amongst specialist sites anticipated to make a move to capture user and market share from eBay’s latest news are the likes of delcampe.com Delcampe are philately and memorabilia niche specialists with auction/buy now sites localised for 10 European countries in addition to the main US home site and a Canadian local site.  A quick nosy revealed 250,000+ members on dot com with over 13 million listings.  They have a slightly unusual fee structure, in that there are no insertion fees, and rather than an FVF per sale, they total all sales in a month and apply a 2%-4% fee (tiered and based on total volume).  They also offer “club memberships” which affect the cost of listing enhancement fees, including the interesting “last minute extension” option.  The delcampe site has a fresh, clean, and crisp visual appeal, that is not graphics intensive, and responds quickly to clicks - a refreshing change compared to others.

CQout are another veteran multi-national site, at least 5 years old and with 5 localised sites flagged in their page headers.  They’re running the no insertion fee model (in exchange for a once only GBP 2.00 sign-up fee) with the home page of the dot com site showing 600,000+ listings active.  They do have final value and listing enhancement fees, with FVFs ranging from 1.5% to 5.5%.  It’s been a while since I visited them, but I seem to remember they had quite a small allowance for number of characters in the listing description (text plus html counting towards the total), but the listing interface was quite fast for “list similar” repeat entries, and the overall site layout is another crisp and clean format.  

In common with eBay and eBid, they run an affiliate program.  CQout’s is run completely within site and is currently paying GBP 0.50 per click-through that registers and becomes an active user.  They also have quite a nice collection of animated and static artwork for affiliates (visible only after registration).

I’ll back regularly, for most of this month, with looks at more alternatives to eBay, and will soon be adding a comprehensive series of daily articles for those wanting to build their own websites, but who have never done so before.

Ed