Thursday, December 21, 2006

VoIP Problems Continue

I don't want to be known as the Anti-Skype but I still have very serious concerns regarding eBay's involvement in this business. I do not own shares in eBay and I am just a former seller who decided there was no longer any upside to doing business on eBay.
However, I do care about the current seller base and the issues they are facing and eBay's $2.5 Billion purchase of Skype, in my opinion, has diverted attention and resources away from eBay's "bread and butter"; the marketplace business.

Imagine what $2.5 billion in investment could have done for the Marketplace business. The ROI would have been much greater and achieved faster than will ever happen with Skype. Buying Overstock.com, StubHub.com and investing that $2.6 Billion in growing more TSE marketplaces (Tailored Shopping Experience) makes far more since than getting into a completely new business with tons of competition. eBay could have easily done a marketing deal with Skype rather than buying the company.

Om Malik writes on his blog today:
“As a reader put it nicely, VoIP business is no different than the long distance business. High costs of acquisition, and very low margins. In other words it is a sucker’s game. One IP Voice, learnt this the hard way, and had to file for Chapter 11 Bankruptcy protection as it tries restructures. Good luck! The company sells VoIP to small and medium sized businesses. Well good luck with the makeover, because selling VoIP to SMB is beset with precisely the same problems as the consumer market. Too many players, too little profit. We will see more of these press releases in 2007.”

Skype is not going to go bankrupt but faces the same issues this small player faced; too much competition and very low margins. (I faced the same issues on eBay) eBay has made the hard decisions before, see the store fee increase and eBay China, it is time for them to look for an exit strategy for Skype. Meg Whitman has said before; “it is okay to make mistakes as long as you fix them quickly.” Skype is a mistake that needs to be fixed so that eBay can concentrate on what it does best.

Wednesday, December 20, 2006

How eBay Sellers can offer Google Checkout!

This article is an example of how one eBay seller was able to utilize Google Checkout's $10 off promotion to more than triple activity on his website.

"Steven Grossberg, who sells video games online from his home in Wellington, Fla., recently sent an enticing offer to 20,000 customers: $10 off any purchase over $30 using a new payment service, Google Checkout.

Traffic on his site more than tripled, and best of all, he said, Google picked up the tab for the promotion."

Scot Wingo of ChannelAdvisor is helping his customers implement this Google Checkout strategy and makes a very astute observation "So ironically by banning Google Checkout on eBay, eBay is pushing sellers to promote it heavily off-eBay, so it's a double whammy (no eBay rev, no Paypal rev). It will be interesting to see how long eBay can go with this "GMV leakage' going on."

Wake-up eBay! The solution to turning your marketplace business around is right in front of you but you won't listen to anyone. Protectionism does not work, instead of fighting so hard to protect your marketplace you need to embrace the changes in ecommerce and facilitate sales wherever they can be made. eBay 2.0 needs to be a radical departure from the version we see today.

I feel sorry for Michael Linton as he takes over the fixed price marketplace business at eBay. Michael will soon be saying "Toto we aren't in Kansas (BestBuy) anymore." Michael certainly brings a different perspective to the position but can he mesh with the current eBay culture? eBay has had a difficult time meshing with Skype Management and obviously didn't have a clue how to make China work (to be fair very few people know how to make China work)

They are spending so much time bailing out water that they can't fix the gaping holes in the hull of the ship. I’ve often used the analogy of eBay as a ship without a rudder and now you can add that the ship is taking on water.

Former eBay Exec Surfaces!

Former eBay Chief Operating Officer, Maynard Webb has come out of retirement to take the CEO position at a leading Silicon Valley startup called LiveOps. This was to be expected as Maynard is a a well respected executive and still a young man (51 years old)

According to the article, LiveOps is a "Palo Alto-based company whose technology routes customer service calls to 9,000 work-from-home agents around the country."

I wonder if they will use Skype to route those calls? LOL

Congrats to Maynard on his new position!

Tuesday, December 19, 2006

Comprehensive article on the plight of eBay's Skype

Here is a great article on the plight of eBay's Skype. At some point it is going to have to start making some money. I still think this was a major blunder on the part of eBay and may never pay for itself.

Monday, December 18, 2006

More eBay China Rumors!

Take it for what it is worth. The rumors have been out there for months that eBay was going to sell its Eachnet business to Tom.com of Hong Kong. Now a disgruntled Eachnet worker has come forward to tell what is going on behind the scenes.

There is no way to validate this "employees" charges but it is interesting reading none-the-less. It is clear that eBay is making changes in their China Business but as for now there isn't any clear evidence what the strategy is going to be. Here is the memo from the alleged Eachnet employee.

Below you will see the first part of two press releases Ebay China puts out this week. I am sending this to you since you write about China and since you know China and since you should know the truth firstly.

EBay now abandons China and us, the loyal workers.

I am one of the many disgruntled Eachnet employee. I have suffered through the incompetence of Ebay leaders for many years. I admit I am greedy. I stay for money. But Ebay has screwed up our Company and in China.

Now that they abandon the market through partnership with Tom Online to be announced this week. The final draft of the press release headlines are below.

Not only are they being fooled, they are basically paying bribes to get the deal done. It is comedy and a travesty and should go down as the worst deal ever in Chinese history.

They have given Tom everything, and get nothing in return. They even have to "donate" millions of USD to Tom to get them to take the deal!

Everyone knows that Tom is controlled by a dragon lady named Solina Chou. What not all know is that Solina Chou recently invested in UMPay.
In order to get the deal done Solina tricks Ebay into making a huge investment into her crony-laden business, UMPay.
So, as part of the deal, Ebay's Paypal Company will invest $105 million into Umpay. This money will be used to buy out Solina Chou and other cronies including Winston Wen, son of Wen Jia Bao! Is this business or a bribe?

Meanwhile we employees suffer. We have to live through leaders who have failed us.

Since our founder Shao Yi Bo was pushed out by Ebay top management, we have had german, American, Taiwan and Hong Kong leadership: no real Chinese. No wonder we are beaten at every turn by Jack Ma team.

Ebay failed in China because it relies on one leader who did not understand the market at all: Meg Whitman. Meg Whitman is Ebay Mao Zedong. No one dare tell her the truth. She exports her cultural revolution and it dont work in China. She is clearly a smart lady but is a no-nothing about China, taken advantage of at all turns.

This deal will just put her down in history as China's worst businesswoman ever.

But its not just all her fault. Huge fault also lies with the USA born Chinese, Harvard MBA that work in Silicon Valley for her. Also the deal makers around her. They tell her what she wants to hear. They think they are smart. But at every turn they are robbed.

They did the deal with Eachnet on bad terms they fired our real leader Shao Yi Bo on bad terms they hired new people on Bad Terms

The only one who will laugh all the way to the bank is the Tom Dragon Lady.

Please see announcements below and I thank you for your help in telling the world about how we have been wronged.

I know everything on this deal and am happy to send you more.

eBay 2.0 - Marketing Vehicle

I found an interesting article on Auctionbytes.com this morning. It was another take on what I've been discussing for months: eBay as a Customer Acquisitions tool.

The article is entitled: The Challenge for eBay Sellers and is written by Allison Hartsoe of Internet Business Skills. She does an excellent job of explaining how eBay has changed for the sellers using the concept of software versions. She writes:

Classic eBay, or what I'll call eBay 1.0 was about creating an efficient market to liquidate goods and make money. Back in the late 1990's when the ratio of collectibles (i.e. beanie babies) to consumables (i.e. ink jet cartridges) was 80% to 20% of eBay auctions, this made sense. The collectibles industry lacked the ability to bring the Pez dispenser seller in contact with the Pez dispenser lover. Enter eBay and voila! Prices for hard to find items equalized with demand as sellers found buyers. And sellers made money.

Then in the early 2000's collectibles and consumables switched places. I'll call this eBay 1.5. Gradually, consumables become a larger part of eBay listings until it's 80% consumables and 20% collectibles. But the consumables industry doesn't operate like collectibles. Consumables require reliable suppliers with recurring products and price reductions driven by volume purchases. By manipulating factors outside of eBay, sellers still made some money.

And now we have eBay 2.0. The gap that allowed sellers to make money on eBay has steadily closed. Costs have risen in the form of eBay fees, external tools and competition. Sellers are screaming that they can't make money. Some feel they've hit a revenue ceiling. eBay has responded by purchasing 5x the volume of search terms from Google that they ran last year. They also rolled a completely new platform (Express) to attract a different type of buyer. The challenge for sellers is that no matter how many new buyers eBay brings to the platform, sellers still cannot make money if each product is purchased for the same miniscule net profit.”


She goes on to say that eBay 2.0 is no longer a sales channel but a marketing channel. I know eBay management would disagree with this assessment but they’ve been blind to the dynamics of the site for quite a long time.

EBay 2.0 is a marketing channel and with Sponsored links, Shopping.com, and Classifieds eBay 2.0 will be an entirely different place to do business. In its current form that is not a good thing for sellers. Maybe eBay 2.1 will be the right version.

Read Allison's entire article here.

Friday, December 15, 2006

Is Overstock a Takeover Possibility?

According to Eric Buscemi, in his Blogging Stocks blog, it looks like Overstock.com may be in play for a takeover. The potential suitors are the usual suspects: eBay, Amazon, Yahoo and Google. Amazon has the most in common with Overstock and a purchase would increase their market share. I don't see this as being eBay's cup of tea, they create virtual marketplaces and Overstock actually buys and ships real product but think of the possibilities if they merged Express with Overstock. How does OverstockExpress.com sound? Yahoo has too much trouble in-house right now and I don’t see a place for it in their reorganized structure. Google is an interesting possibility; Overstock.com could become their first marketplace venture and would cause some serious problems for eBay.

Thursday, December 14, 2006

eBay Related Links You May be Interested In!

The eBay Gulag! - I came across this article on Scot Wingo's eBay Strategies blog. Be careful who you associate with. They may put you out of business.

Here's a great Org. Chart on eBay management. It details where the new employees (Linton and Justus) fit in the scheme of things. Pay close attention to where Bill Cobb is placed. It seems to me everyone could report just as easily to John Donahoe as to Bill Cobb. (I found this on Ina Steiner's Blog).

Tuesday, December 12, 2006

eBay Just Doesn't Get IT!

You may be able to find "IT" on eBay but eBay, as a company, just doesn't get "IT".

Every morning I search the web, communicate with my sources and do my research on ecommerce and specifically eBay. I look for an interesting story or perspective to discuss with my readers. I try and find something positive but most often I find only negative. This morning was no different.

At the Cowen and Company Internet Conference last week four eBay Power Sellers spoke about the problems they faced on eBay. Todd Rath of Rock Bottom Golf, Jennifer Canty, of Dyscern, Dan Yen of Movie Marz (my former competitor) and Douglas Deist, the vice president of operations for Exel-I.

Each of these eBay sellers spoke about the troubles they experienced on eBay. These are not small hobby sellers; they do this for a living. Rock Bottom Golf has annual sales of $18 Million; Movie Marz reportedly does $12 million a year in sales. In most businesses your top clients get treated like royalty, there is constant communication; you definitely want to keep the big clients happy. This isn’t the case with eBay.

Here are some excerpts from the article:

“Mr. Rath is not happy with eBay, and did not mince words. His complaints include a lack of communication with eBay (he hasn't heard from his rep in 15 months), annoyance that eBay tries to maintain a "level playing field" for its sellers (and, he said, consequently caters little to its largest sellers), and frustration with ever-rising fees being charged on eBay.”

And

“Dan Yen, whose company Movie Mars offers more than 250,000 new DVDs, games, and CDs, was most upset with eBay's propensity to change its fees and rules without notice. In frustration, Mr. Yen began selling on Amazon (AMZN $39), where he said he quickly saw a jump in sales. Some of the panelists, though not all, said they saw greater profitability in selling on Amazon, and said consumers have more confidence in the company. Jennifer Canty, who was more supportive of eBay than her fellow panelists, nonetheless agreed that the company had not done enough to boost the image of its sellers.”

After selling on eBay for 5 years I came to the conclusion that eBay does not want large sellers and therefore has not addressed many of these issues. I thought I could make an all eBay business work and I was sadly mistaken. Sellers who want to grow must begin looking at eBay as a customer acquisition tool and budget their marketing dollars accordingly.

Monday, December 11, 2006

New Management at eBay!

Things continue to change at eBay.com. Last month Phillip Justus was brought on board at company headquarters to oversee the ebay.com CORE business and this week it was announced that Michael Linton the former Chief Marketing Officer at Best Buy, Inc. will be heading up eBay's Marketplace businesses (Half.com, Stores, Express, eBay Canada and Motors)

I think this is a smart move and hopefully will bring about some much needed changes in the eBay’s marketplace businesses. There may still be hope for the stores platform.

I have one question though, what is left for Bill Cobb to do? It seems to me that these two executives are taking over the two largest business segments on eBay.com and according to the announcements will report to Bill Cobb. It seems odd to me that ebay is adding to their management ranks rather than streamlining their business units. I can't help think this is a precursor to a not to distant announcement regarding Bill Cobb’s future at eBay. Of course that is pure speculation on my part.

More changes at eBay's Skype - It's been an interesting year for Skype managers as the tug-of-war between original Skypers and the eBay managers sent to mold Skype continued. Now it looks like the original Skype managers have won.

Thursday, December 07, 2006

Yahoo Management Shakeup! Is eBay Far Behind?

With Yahoo shaking up the executive suite can eBay be far behind? The plight of these two companies is very similar. Both stocks are trading way below their 52-week high. They are both #1 in their categories but slowing growth is a major concern. Yahoo has been criticized for not being nimble enough to compete with the much more effective Google while eBay has had an easier time with investors for at least acknowledging problems and attempting to resolve them. At this point eBay’s saving grace is they don’t have any real competition for their Marketplace business. There are signs that PayPal will experience some pressure from Google’s Checkout in 2007.

If eBay investors thought 2006 was a tough year just wait until 2007. My hunch is 2007 will be this current managements last year to turn things around. Maybe there is a "Peanut Butter Manifesto" being written right now by an eBay executive.

Wednesday, December 06, 2006

Google Checkout Revisited!

Google has extended their free transaction program for Google Checkout. Sellers using Google Checkout to process sales will pay no transaction fees through the end of 2007.

This reminds me of the “Browser Wars” between Microsoft Explorer and Netscape in the 90's. Microsoft gave away Explorer in an effort to take market share from Netscape and was successful in becoming the dominant browser. It looks like Google is taking a page from the same book, putting tremendous pressure on eBay's PayPal.

If PayPal's growth is slowed by this approach eBay will be in trouble. PayPal is the business segment responsible for eBay's growth at this point.

It wouldn't surprise me if this added pressure from Google ended up with eBay and Google making an agreement. Possibly adding PayPal to Google Checkout and Google Checkout to eBay.

Follow this link to see what some eBay sellers are saying about this extended promotion from Google.

Tuesday, December 05, 2006

Perception is Reality!

Click on the title link to this post for a recent eBay discussion board thread on why eBay isn't mentioned in Women's magazines as the place to shop this holiday season. There are some interesting takes.

Celebrities use eBay as a promotional vehicle, crooks use ebay for scams, Kooks use eBay to sell ad space on body parts but what is the perception of the nearly 700,000 regular folks who use eBay to make all or part of their monthly income?

They are hobbyists, stay at home mom's, handicapped, but they can't be real business people (that's the perception but it isn't reality) eBay has a perception problem and sellers need to be aware of that. My suggestion: I would take the eBay off of your business cards and begin calling yourselves online retailers. Perception is reality and how eBay is perceived in the world won't change.

Monday, December 04, 2006

Promotions and More Promotions!

I have been around eBay since 1999 and I have never seen this much promotion activity. Ina Steiner mentions three more promotions for eBay sellers this week.

It is clear to me that eBay has hit the wall or ceiling if you will. They must now prop up CORE listings by discounting not because of competition but because their marketplace is in trouble.

I could see this approach if there was a major competitior out there but there isn't. eBay controls the Auction business on the web. So what is the problem? Apparently there are some serious problems with the CORE marketplace. The 4th quarter earnings report will be very interesting.

eBay Revenue Growth vs. GMV Growth - Two Perspectives


A recent article on SeekingAlpha.com discussed the current trend in Revenue vs. GMV growth on eBay. This chart shows the comparison. As you can see Revenue is growing faster than GMV and it appears the Shopping.com purchase has a great deal to do with this (notice the separation between the 2 trend lines). This should be good news for investors because as eBay's marketplace business matures and GMV flattens out (or even declines) they can still see Revenue growth through other initiatives. Investors should be concerned though that slower GMV growth puts pressure on PayPal revenue and if eBay cannot get PayPal adoption across the web (see Google Checkout here) they will see a slowing of revenue growth from eBay’s star performer. EBay marketplaces are maturing, PayPal may not be far behind and Skype may never generate much. Where is the Power in “The Power of Three”.

As I said there are two perspectives on this data. Investors are happy in the short-term because they can see continued growth outside of eBay's CORE marketplace but Sellers should be very concerned as they see GMV growth slowing and in some cases declining on eBay's Core business. GMV (Gross Merchandise Value) is a key indicator regarding the health of the marketplace, as eBay's GMV growth flattens out sellers should be concerned.

As the eBay marketplace reaches its capacity to move product, sellers must reconfigure their business plans. In order to grow your eBay business you will need to grow your share of the eBay business rather than rely on marketplace growth. The problem with this approach on eBay is in order to increase share you will need to increase your listings/fees. Conversion rates will decrease putting even greater pressure on margins. Take it from me eBay market share comes strictly from having more listings than other sellers. This is not a strong business plan. I can attest to that.

My suggestion is that sellers seriously look at growing their businesses outside of eBay. This approach gives you greater control of your marketing dollars and makes you less dependant on a maturing marketplace. EBay is growing slower than ecommerce as a whole so if you want to grow look outside of eBay.

Friday, December 01, 2006

More on Overstock and Patrick Byrne's Message Board Post

I've read Patrick's post several times and honestly I feel his pain. So often message boards posters go over the line of decency when complaining. I've noticed it on the eBay boards, the local High School football boards, etc.

What amuses me is the post's following Patrick's. They are all cheery and thankful while those same members were not so kind when they thought Patrick wasn't listening.

At no time is it ever reasonable to attack someone personally. Whether they be Pinks on the eBay message boards, employees of Overstock or Customer Service Reps. at your vendor. It is completely unacceptable!

When I was selling online I occasionally had to do exactly what Patrick did "fire the customer" It was our company policy that if a customer used profanity the CSR gave them one opportunity to calm down and if they didn't they were encouraged to call back when they could be reasonable. Very rarely did I have to fire a customer. What happened to old saying "treat them like you want to be treated"?

You get better results with honey then you do with vinegar.

Patrick has posted a new message to sellers asking for suggestions.

Thursday, November 30, 2006

Is Overstock getting ready to pull the plug on Auctions?

My guess is they are not going to pull the plug in the near future but decisions they are currently making may force them to shutdown auctions sometime in 2007. Shutting down Auctions is not their intent but it may become the result.

New Auctions VP Stormy Simon recently spoke to Overstock sellers on the Overstock message boards yesterday.

"I write to address the changes that we are making to our auction program. I will preface this by saying that, while I’m sure all of you won't agree with everything I say, I do hope you'll respect my candor, and remind you that none of these changes are being made to discourage you from listing with Overstock or to damage your businesses: they are being made to save this program for all of us. "

They are trying to save the Auctions platform and truthfully some of their changes are needed. My take on this though, is that by backing off on their marketing and exposure for auctions on the main Overstock site they are setting the wheels in motion for failure. What is the old axiom? "If you don't grow you die" I experienced it with Glacier Bay DVD and I believe Overstock is experiencing it now. Their commitment to Auctions is waning, so even though they have recently broken even, they don't seem to have the heart to take it forward from here. It may die of neglect.

I don’t have a “horse in this race” and online sellers don’t need less competition for eBay they need more. I hope Overstock can right this ship and send it in the right direction.

Just my 5 cents!

More Overstock Auctions News!

It appears Overstock Auctions are falling apart at the seems. Two stories today from Ina Steiners Auctionbytes show a top Auctions exec Eileen Stout moving to Bid4Assets.com and a statement from Overstock CEO Patrick Byrne.

Eileen is a great person and Bid4Assets.com is lucky to have her on their team. I wish her the best of luck.

This is getting interesting. Let me know what you think. I'll pipe in with my thoughts shortly.

Wednesday, November 29, 2006

The UK Bans the Military from using eBay

What's the world coming to when eBay is considered a distraction for the British Troops.

"With Christmas coming, the decision has angered Our Boys. One soldier just back from Iraq said: “It’s a breach of our liberties. First they give us a tax-free bonus, then they stop us spending it how we want. Most of us only get the chance to use the net in our free time anyway."

Don't the UK Military Brass have more pressing issues than eBay?

Tuesday, November 28, 2006

Overstock Makes Changes to their Auction Platform.

Well, it looks like Overstock Auctions has begun to die a slow death (of course that is just my opinion, they believe they are making the correct moves). In recent months there have been numerous changes to Overstock's Auction offering. First they dropped the Trusted Merchant Program and recently they have reconfigured the site.

Stormy Simon the new VP of Auctions at Overstock has made a tough decision on the future of Auctions and I think it is the wrong choice. You cannot grow Auctions organically.

The only way to compete in the Auctions space is to make Auctions part of the main Overstock search rather than a tab on the home page. Let's look at some history. Yahoo auctions failed, Amazon auctions failed and both of these sites have unbelievable traffic. What is the common thread between the two marketplaces? Auctions are just a tab on the home page or an afterthought in their overall site plans. Overstock has the traffic to make Auctions work but it won't happen unless they find a way to make Auctions a part of the main search.

Amazon struggled to make their 3rd Party offerings (Z-Shops and Auctions) work but they were wildly successful once they created Amazon Marketplace and made those offerings part of the main search. Overstock needs to do the same thing. If they are not willing to do this then their auction platform will go the way of Yahoo and Amazon. At one point I had high hopes that Overstock would become a strong competitor to eBay it now looks like this will never happen.

Monday, November 27, 2006

"The State of Skype" from Ina Steiner

Ina, does a fantastic job on her recent article about Skype and it is must reading for eBay sellers and investors.

Click here to read the entire article

Google Checkout Keeps Chugging Along!

Interesting take on Google Checkout form Scot Wingo of Channel Advisor.

Google Checkout is getting very aggressive. They recently announced a $10 off promotion from selected sellers and they continue to offer free processing for Sellers through the end of the year.

They are also signing up more web retailers: Toy R Us, Dick's Sporting Goods, Buy.com and Zales Jewelry to name a few. Here is a more comprehensive list.

How will this affect PayPal during the holidays? I don't believe it will have much effect on eBay's PayPal this holiday season but if Google Checkout continues to get traction and finds a way to start signing up eBay sellers, who have launched their own websites, it may cut into the upside of eBay's Golden Child (PayPal). Based on the declining health of eBay’s marketplace business and the fact Skype is stuck in neutral, if the “Shining Light” (PayPal) of eBay takes a hit it could be “Lights Out” for eBay. PayPal was the biggest contributor (growth Y/Y) to eBay’s bottom line in the 3rd Qtr.

From a sellers perspective increasing checkout options will be beneficial and a solid competitor will force PayPal to reconfigure their fee structure and become more responsive to sellers issues. Where Google Checkout has the greatest chance of success is in the ecommerce world outside of eBay. This battleground (the world outside of eBay) is much more difficult for PayPal to get traction. My guess is Google plans to become the defacto standard for checkout on the web and with their $13 billion war chest who would bet against them.

PayPal has an advantage with eBay buyers/sellers because it serves as an in/out account (similar to a checking/savings account) rather than just an online wallet like Google Checkout. PayPal users often use their PayPal balance, which holds revenue generated from their sales, to purchase items rather than use the credit card or checking account that is attached to their PayPal account. This works well for eBay because of the culture of the marketplace but in the rest of the world, where buyers are not sellers as well, it has limited use.

EBay does not seem to be worried about Google Checkout but as my own online selling experience points out; if you take any competitor lightly you are primed for a fall.

Prediction: At some point I see the competitive landscape changing and PayPal being offered through Google Checkout. Of course the only way I see this happening is if Google were to buy eBay. A Google/eBay marriage would allow PayPal to continue it’s upward trend, would bail out eBay’s Skype purchase by putting it in the hands of Google management and it would invigorate eBay’s marketplace business. This makes far too much sense.

Tuesday, November 21, 2006

Food for Thought!

A buddy of mine has this saying as his IM message and I think it is an issue that needs to be discussed.

"If a man speaks and there isn't a woman around to hear him, is he still wrong?"

eBay 20 cent Listing Promo - Today 11/21

Wow! Another listing sale for CORE listings. I guess the only way eBay can increase CORE listings is by discounting substantially. Apparently raising fees on store listings didn't do the trick. I no longer hear the phrase "rebalancing the marketplace" coming from eBay. This sale is scheduled to end on "Cyber Monday" the busiest internet shopping day of the year so I can understand the reason for this sale but why have 3 sales over the last 4 weeks? Could it be that CORE no longer is the option of choice unless eBay discounts substantially?

Listings Sales are great in theory but they also have a negative effect on the marketplace as a whole (at least for sellers). Because of the increased number of listings in CORE, stores sales see a drop in unit sales of between 25% and 30% during the sale and CORE conversion rates decrease substantially becausee of the increased competition.

So far this year eBay has run 10 CORE listing sales on the US site alone(a 100% increase in listings sales over 2005) and my guess is they aren't done yet. With 3 sales in the last 30 days something must be up in eBay land.

eBay To Transfer Control of EachNet to a Local Company

In an email to eBay investors from Bob Peck of Bear Stearns, Bob states:

"According to SOHU, one of the largest online portals in China, eBay will transfer the operation of eBay EachNet to Tom Online at the end of 2006. The report states further that eBay will pay $200M-$300M for shares of Tom Online and drop the EachNet name. eBay EachNet is eBay’s Chinese platform and Tom Online is one of the largest wireless Internet voice and data companies in China offering services such as SMS, MMS, interactive voice response (IVRs) and ring-tone services."

This may be a positive development for eBay shareholders as eBay has found it increasingly more difficult to make the China operations work.

eBay Discussion Board Thread of the Day!

I have decided to post eBay discussion boards thread each day so my readers can get a feel for what some Sellers are saying about eBay. I would have thought the anger would have subsided by now but apparently every time an executive from eBay is quoted it grows again. Please remember only a small percentage of Sellers post on discussion threads and most don't post when things are going well so take that into consideration when reading their comments but don't discount their positions.

Today's thread is a discussion of the interview Meg did with the San Francisco Chronicle. Something I commented on yesterday.

One comment to highlight was from user clact and comment #10

Regarding Stores in Search:

"After hearing the "Cobb reports" of buying problems I checked all the board, I searched, scanned, asked everyone I knew, asked people taking my wifes ebay classes. I couldnt find ANYONE , NOONE having problems finding things or finding a "degraded experience".

Much to the contrary people were finding things they never found before that lay hidden in stores. The site was feeding on itself in a frenzy. Store owners ,with growing sales were responding with rapid inventory growth. They were also BUYING more than they ever bought on the site as they were flush with cash in their paypal accounts."


Just a taste of what sellers are saying.

Monday, November 20, 2006

ON THE RECORD: MEG WHITMAN

I came across this article while checking out Ina Steiner's Auctionbytes blog. It's a good interview with eBay's Chief Exec. Just a couple of points to make regarding her comments:

"Q: Even absent this problem, Wall Street has been increasingly skeptical about eBay's growth outlook. What is it like being in charge of a company when Wall Street is applying so much pressure?

A: What we do is focus on the company's strategy and try to fulfill the purpose we have. We help people be successful doing what they love.

Then, we try to make sure that we have the right strategy, that we are executing against that strategy and we have the right people in the right job at the right time.

You need to do more of that when the external world is not going as you had hoped. Fundamentally we run the company the same.

Q: Even if Wall Street is complaining, you don't care?

A: We care because they are absolutely a stakeholder. We want to make sure we understand what their issues are and we try to explain our point of view if we think it's different. "


First, regarding her comment about sellers. "We help people be successful doing what they love." There is a problem with this statement. There is a growing disconnect between eBay and it's sellers for this statement to be true eBay needs to address this immediately. A large number of sellers would say eBay’s first priority is Wall Street. In regards to Wall Street complaining she says "We care because they are absolutely a stakeholder. We want to make sure we understand what their issues are and we try to explain our point of view if we think it's different.

This is a valid response but eBay must realize there is another stakeholder involved. The Seller! Often times the investor and the Seller have opposing views but eBay, in my view needs to grant equal weight to each opinion. It’s a tough balancing act but if too much weight is given to either side the marketplace will suffer.

Thursday, November 16, 2006

A Crack in eBay's "Just a Venue" Mantra

It appears eBay can act, when they want to, against sellers who list Brand name merchandise. The example here is the PS3 Game Console. I got onto Google news this morning for my eBay news fix and virtually all of the stories on the first page were regarding PS3 restrictions on eBay.

The PS3 is available at retail stores starting tomorrow but eBay has placed restrictions on their sale through the auction site.

eBay's policy on Pre-Sales can be found at this link. Here are the highlights:

“Pre-sale listings are those that describe items for sale that are not in the control or possession of the seller at the time of the listing. These listings generally consist of items that are sold in advance of a delivery date to the public.

eBay permits Pre-sale listings only on a limited basis. The seller must guarantee that the item will be available for shipping within 30 days from the date of purchase (i.e., the day the listing ends or the date the item is purchased from a store front listing). The seller must also clearly indicate within the listing the fact that the item is a pre-sale item with a delivery date that indicates the item will be shipped by the 30th day from the end date of the listing. Additionally, this text must be no less than the default font size of the eBay Sell-Your-Item form. Currently, the default font size is HTML font size 3.”


I could find no specific restrictions on PS 3's but it appears there are further restrictions on the marketplace.

According to one source: "Only established eBay vendors - those who have racked up comments from at least 50 previous customers and have positive ratings of at least 98 out of 100 points - can list PS3s before Friday. Each vendor can list only one PS3 per eBay account.

The listing must include a photo of the pre-order receipt, and the seller must guarantee shipment within 30 days from the date of purchase. Before Friday, PS3s can be listed on eBay only in auction formats - not as "buy it now" items."


I have requested confirmation from eBay on these additional restrictions and will update my blog as soon as I hear back.

My thoughts on this are: eBay has always been able to restrict items from being sold on their sites. Up until now they have relied on users to police the site but in recent months they have been removing offending listings more proactively. I think this is good for the marketplace. What is needed is a more comprehensive listings policy that sellers are required to agree to so that they don't break the rules unknowingly. Also, a more restrictive marketplace will benefit all parties involved. Sellers will benefit by not having to compete against Fakes, Bootlegs, etc. Buyers will get the quality merchandise they thought they were purchasing. Rights holders will protect their brands.

eBay Seller Rewards US Version

The UK has its Seller Reward Program based on invoices and the US has announced their version for Power Sellers based on GMV. While neither of these programs got me all that excited, it is nice to see that eBay is doing something. Maybe these are the first fruits of the seller protests this summer. Sellers it is not the answer but it proves eBay is thinking about you. They have taken baby steps if they stop hear it is a joke but if they fine tune the program with input from sellers it could be beneficial. Scot Wingo spoke about it in his eBay Strategies blog as well.

It does look like the "level playing field" mantra is taking a hit and well it should. In the US the program is only for Power Sellers and does not include Store Inventory.

I've always had a problem with the "level playing field" in every other aspect of life if you achieve you receive benefits. My chief concern while selling on eBay was how could I scale my fees? If this rewards program is a baby step in that direction I am pleased. There still is a very long way to go.

Wednesday, November 15, 2006

No eBay Talk Today!

I decided to take a day off from discussing eBay, mostly because there wasn’t a lot of interesting stuff to talk about, so instead I spent sometime talking about YouTube, CBS, Sony and video sharing on my sister blog The Digital Napkin.

Check it out if you get a chance.

Tuesday, November 14, 2006

eBay Seller Rewards Programme (Program for the US)

Well, today has been a busy day in eBay land. EBay UK has just announced a seller reward program. I was turned onto this news by an email from Bob Peck of Bear Stearns and Scot Wingo wrote about it in his blog.

I'm not sure if this is a UK management decision (they do give each market some autonomy) or a decision from on high (San Jose)

It would not help the largest sellers on eBay much, they cap the program at 250 pounds ($474 US) While I would have gladly taken $474 dollars a month in discounts (that would have just paid for my phone bill). A more equitable approach would be a declining percentage with no cap.

Let's hope they roll it out in the US soon. My suggestion to eBay is; if you are going to roll this out on the US site then give your sellers a heads up. Many of them will be making decisions in regards to staying on eBay after the holidays and this info could help in the decision-making.

Maybe, eBay is actually listening. The jury is still out.

Questions and Concern Arise regarding PeSA!

I won't comment much on this as it is still a little confusing but Ina Steiner has written a 2-part article on PeSA that is very interesting.

I wasn't a member of PeSA, while Glacier Bay was in business, because I'm not a big "Joiner". I'm more of a Lone Wolf. I do see the benefit of an organization of sellers, and I don't think eBay cares either way. They don't really listen anyway.

I'm sure those eBay employees that still read this blog would think this last statement to be incorrect. They actually think they listen to sellers, but they are deluding themselves. EBay’s "Just a Venue" and "Level Playing Field" approach prevents them from really dealing with seller issues.

Read the article and let me know what you think.

eBay secures $1 billion credit agreement

Looks like eBay is getting ready for a major purchase. They've never borrowed before and they don't need a $1 Billion line of credit to make capital expenditures. (How many servers would $1 Billion buy?) Or is this preparation for a Poison Pill (Not likely)Let's speculate! What company out there would be able to make Skype a money maker, take PayPal to the level of a Mastercard or VISA group and lessen eBay dependance on their Marketplaces? Hum! Let's think!

Google! No, eBay couldn't buy them. Yahoo, no that would be a Merger of equals. Since it looks like eBay will be the purchaser who could it be?

Monday, November 13, 2006

Yahoo, Linksys Partner On Cordless VoIP Phone

"Yahoo Inc. and Linksys, a division of Cisco Systems Inc., said Thursday (Nov. 9th) they have partnered on a new cordless phone that enables calling on a landline and over a broadband Internet connection."

How will this affect Skype? After all eBay's Skype recently announced their own Linksys Cordless VoIP handset. Obviously Skype and Yahoo use different technology for thir VoIP services but if VoIP is going to be the future then the early winner winner is Linksys. They manufacture handsets for both services. It appears Skype has no huge technological advantage over Yahoo's service and I would guess there is more competition on the way.

When will eBay's $2.6 billion dollar investment in Skype actually generate significant ROI? As a former seller I never believed in the value of Skype as a tool for selling online. I would not have adopted it and you can bet most eBay sellers have chosen not to use the service. If you want to get a snapshot of how eBay sellers feel about Skype all you need to do is go to the Skype discussion board on eBay Since Sept. 6th of this year there are a total of 38 seller generated threads discussing Skype and only 3 have more than 7 comments. The most active thread is entitled Why I think Skype is not a good idea.

If I owned stock in eBay I would be very concerned. eBay speaks of the "Power of Three" eBay, PayPal and Skype. In my view it's more like a three legged stool with one broken leg (Skype) and won wobbly leg (eBay marketplaces) Try sitting on a stool like that. eBay would have been far better of with a step ladder (eBay and PayPal) and spending the Skype money on fixing the eBay marketplaces.

PayPal was a fantastic purchase in 2002 because it was already used by nearly 60% of eBay's user base and eBay's marketing power could maximize it's potential. In 2002 they spent $1.5 Billion for PayPal and boy what a success. Without PayPal's revenue growth eBay's stock would be even more in the tank then it is today. In contrast to the success of PayPal we have Skype a company that was never profitable, had negligible revenues, a new technology, and was not being used by any eBay sellers, oh yeah and they paid $2.6 billion for it in 2005.

If eBay still works under the mantra "it's okay to make mistakes as long as you fix them quickly" then they better make some changes in regards to Skype and fast.

Monday, November 06, 2006

PayPal offers $100 million in rebates and free shipping incentives for holidays

Wow! It is amazing what a little competition can do. Google announces no fees for Google Checkout through the end of the year and PayPal counters by announcing $100 million in rebates when you use PayPal.

It just goes to show you. If Google came up with a Stores offering like eBay has and linked it to their AdWords program eBay would follow suit and make eBay Stores more attractive. Competition is a good think for sellers and buyers not so much for eBay share holders. Google needs to step up with a stores offering to compete with eBay.

Multi-Channel Selling! or Free Yourself from eBay!

I'm still traveling so these posts have been a little less frequent than I would like but I did come across an article by Scot Wingo of ChannelAdvisor, Inc. It is entitled Developing a Multi-Channel Online Selling Strategy

Scot makes some great points about expanding outside of eBay. Your options are to increase your share on eBay or reach out to different marketplaces to grow your business. Check it out!

I should be done traveling this weekend and hope to get back to my daily posts.

Tuesday, October 31, 2006

Greg Isaacs Finally Lands with Leadpoint

Greg Isaacs, former Director of eBay's Developer program has officially announced his new venture. He was recently hired as Vice President, Marketplaces for LeadPoint a Los Angeles based leads exchange marketplace. Congratulations Greg!

Monday, October 30, 2006

Who wins the Race the Tortoise or the Hare?

Yahoo has been sitting on the sidelines while Google gobbles up some prime online real estate. Yahoo is just now launching their long delayed search application called Panama while Google announces a new application just about every week. What's the problem at Yahoo? I call it decision constipation. eBay and Google live by the Mantra "make quick decisions and fix the problems as they develop" While Yahoo takes the much more conservative approach of a traditional business.

Who has the best approach? The Tortoise (Yahoo) or the Hare (Google, eBay)I think both approaches have their positives and negatives. Yahoo's approach to software development is a negative. Software will never be perfect and if you continue to delay product launches you will fall behind the rest of the marketplace. eBay launches applications quickly and fixes them as they find problems. While this approach is occasionally bad for buyers and sellers it hasn't affected eBay in the marketplace. Google launches applications in Beta form while it continues to mold and form the program. This approach has been a big positive in the Marketplace.

On the acquisition front though, I believe the roles are reversed. EBay made a quick decision to purchase Skype and they paid heavily for a business that may never materialize. If you look at eBay’s purchase of PayPal though that was made after many years of trying to compete with them (more of a Tortoise than a Hare). Yahoo on the other hand hasn’t made a market changing acquisition since Overture, which in my view saved their business.

Yahoo would be better served to speed up their development of applications to compete with Google and Microsoft than to purchase online dinosaurs like AOL or infants like Facebook. The “Tortoise” approach to M&A is the right approach. Yahoo needs to be a developer first and a buyer only if a market changing application becomes available. They would be far better off buying 10 low priced technology startups and developing their applications than making a huge purchase like AOL or merging with eBay. But this approach requires them to speed up the launching of applications.

New Math! This is Where Bill and Meg got the 6% Increase.

This summer, when the eBay fee increase was announced, Bill Cobb mentioned that the average increase per seller would be around 6%. Most sellers laughed at this because actual listings fee's increased from 150% to 500%. Nobody could figure out where they got their 6% number from.

I came across this video while reading the eBay stores board and realized that Bill Cobb went to the Ma and Pa Kettle school of Math. Check it out for a good laugh.

Ma & Pa Kettle Math

Friday, October 27, 2006

eBay's Stock hits $33

eBay's Stock hit the $33 mark today at 12:31 EST. but what explains the increase from the 52 week low of $22.83 in early August? Overall eBay is sitting on a ton of cash $3 billion, is still generating large amounts of free cash flow, has zero debt, has been buying back it's stock, and appears to have survived the seller crisis that developed when they raised fees. The market as a whole is rising and eBay's peers are doing well. So there’s your answer.

Investors, lets not get over exuberant though, eBay lowered 4th quarter earnings targets as well as 2007 guidance so eBay's management isn't exactly feeling bullish going forward. While eBay may hit there revised 4th quarter numbers they will be experiencing more seller unrest after the holidays as the sellers that hung on through the holidays leave the site. Also January is when they always announce fee increases so get ready for a new round of seller unrest during the first quarter.

Now Randy Smythe from the investment firm of Smythe, Stern and Lippman (Tell the SEC I’m only kidding and if you follow my advise your nuts …. unless of course I’m correct in my analysis) is initiating coverage as Peer Perform with a year end target of $35. For you longs out there though the stock price will settle in once again around $30 for most if not all of 2007 so if you bought at anything under $35 pick your spots because $35 will be the high for the next 52 weeks unless eBay makes some significant changes.
See I can be an analyst too. I should be added to the list of Analyst's covering eBay's stock. I’m not the Motley Fool but I can make predictions with the best of them. I wonder if the press will cover my predictions. Tell your friends.

Tuesday, October 24, 2006

BuySafe offers Choice!

Since I am traveling this week. I may update the blog less frequently but I did see a short notice on AuctionBytes about BuySafe's new options. Since BuySafe was crutial in helping my customers when I went out of business (I am a little biased but this sounds interesting). They are offering sellers an option to bond all of their items or allow the customer to decide. I'm all for choices.

Thursday, October 19, 2006

Is StubHub the Business Model to Compete with eBay?

There have been a small numbers of rumors that eBay is planning to buy StubHub.com, while these are just rumors they do, in my view, point out a chink in eBay's armor. I recently wrote an article for my Associated Content site called: How do you Beat eBay in the Auction business? One Category at a Time! I wrote this before I spent any time looking at StubHub.com so I wanted to expand on my original article here.

StubHub is the poster child for the concept of "One Category at a Time!" or as my friend Graham says "Death by a Thousand Cuts" eBay is in the ticket business but it appears a young vibrant competitor like StubHub is cutting into their upside. StubHub is a ticket site that is doing all the right things and they are making some inroads into eBay's Ticket business. They have made one cut, who is going to make the next 999?

What would happen if others took the same approach as StubHub? It looks like many so called eBay competitors want to be as broad as eBay; that effort will fail. They should, instead, think more about becoming the next eBay Motors (or StubHub since they may be bought by eBay). eBay competitors should "Think Vertically"! Find a category they know well and make a success. Who knows when you become successful maybe eBay will buy you.

The Day After

I am digesting the eBay earnings report bit by bit and will post comments throughout the day. One of the first things that stuck out to me was regarding eBay Express: Quote from transcript: "During Q3 we continued to work on tailored shopping experiences that meet diverse buyer and seller needs and increase activity across Marketplaces. eBay Express, which debuted in Q2, offer buyers a great source to find new items they might otherwise search for elsewhere. Early results show eBay Express is having the intended effects. 89% of shoppers who have made a purchase on eBay Express say the experience met or exceeded their expectations. And buyers who shop both eBay.com and eBay Express are spending significantly more time, and nearly 25% more money with eBay, than those who have yet to try Express."

First, all of these "New" items listed on Express come from the eBay.com site so if customers search elsewhere wouldn't they search eBay.com. Or is the buying experience on eBay.com less satisfying then Express.

Second, eBay is touting an 89% Express satisfaction rating as if it is a good thing. On eBay you can't even maintain Power Seller Status unless you have a Feedback rating of 98% or greater.

Third, “buyers who shop both eBay.com and Express are spending more time and 25% more money.” Once again all of the product on Express comes from eBay.com listings so if they are spending 25% more money what is wrong with eBay.com. Could it be that customers prefer a fixed price marketplace to an auction marketplace?

Wednesday, October 18, 2006

Resources Related to eBay's Q3 Earnings Report

eI've tried to gather a number of resources dealing with eBay's earnings report on 10-18-2006. Read these titles carefully before you click on to the site and read the whole article. It looks like the consensus is "3rd Quarter numbers were great but....." I've made the point several times over the past month that eBay is a "Ship without a Rudder" and it certainly appears to be the case. If Management is not confident in the 4th Quarter of 2006 and FY 2007 why should investors be?
  1. eBay's Q3 2006 Earnings Call - Listen to a recording of eBay's earnings call.
  2. eBay Q3 2006 Earnings Call Transcript - If you don't have time to listen.
  3. EBay's Profit Rises, but Growth Of Core Business Is Questioned - Wall Street Journal
    (This is a Subscription Site) - Quote -"EBay's outlook for the rest of this year and for 2007 is mixed. The company projected a 17% to 21% rise in 2007 revenue over 2006 revenue to about $7.17 billion on the high end. That falls short of Wall Street's current 2007 consensus estimate of $7.35 billion in revenue, according to Thomson Financial."
  4. Soft Guidance at eBay - TheStreet.com - Quote: "eBay posted a 10% earnings gain for its third quarter but the online auction's guidance kept alive concerns about the company's core domestic business."
  5. UPDATE - EBay posts profit up 10 percent, cautious on 2007 - Reuters Quote: "But analysts said it is too early to say whether steps the company is taking to reaccelerate growth in its core business are working and the company forecast 2007 revenue sharply below Wall Street forecasts. "
  6. Auction Leader eBay Exceeds Q3 Views, But Its Outlook Lags - Investor's Business Daily - Quote: "EBay is still king of online auctions, but these days its crown is looking a little worn.
    The online auctioneer on Wednesday reported third-quarter results that beat analysts' expectations, but its outlook for the fourth quarter and for 2007 lagged views."
  7. eBay: Holding Firm, for Now - Business Week - Quote: The online auction site's third-quarter earnings just beat expectations,but can it live up to 2007 forecasts?
  8. Rock-a-Buy eBay - The Motley Fool - Quote: "It was another mixed quarter at eBay even though this tug-of-war found the optimists muscling a little more pull than the pessimists."

It appears PayPal has become the king of eBay, Inc. and Skype may be the lap dog. We still don't know which way Skype will go and it appears neither does eBay. From the earnings call Meg Whitman says in regards to Skype she's "cautiously optimistic and will give better guidance at end of Q4". In my view the words "cautiously optimistic" means she doesn't have a clue.

Now let's see how the Market reacts. So far eBay's stock is up 6.25% today as of 3:30 EST. I guess the markets have spoken

eBay Inc. Announces Third Quarter 2006 Financial Results

It looks, on the surface, like eBay had a good 3rd Quarter but I only gave the report a quick read. I will look at it more in-depth this evening and give you my view. In the meantime, please read this report and provide your comments.

eBay Inc. Announces Third Quarter 2006 Financial Results

Some Interesting Blogs on eBay and eCommerce in General

I've come across some interesting blogs recently and wanted to list some of them here. It's always good to hear different views.

AuctionBytes Blog - News, rumors and speculation about the online auction industry by Ina Steiner, Editor of AuctionBytes.com
Common Sense E-Commerce - Blogging about contemporary ecommerce business.
Blogging Stocks - Bloggingstocks.com covers some of America's most widely-held stocks deeply, analytically and obsessively.
Steve Woda's Blog - Steve is a Founder of buySAFE.com and writes about buySAFE, eCommerce, eBay, Economics, Entrepreneurship, Online Fraud, Trust and Safety, etc.
eBay Strategies - Scot Wingo's Blog on eBay related topics.

As I come across other interesting blogs or information resources I will list them.

Predictions Please!

Let's predict the outcome of todays eBay earnings call. If 28 different analysts can look at the same data and come up with completely different estimates why shouldn't we make our own wild guesses; one of us is bound to be right.

I'll go first:
I think ebay will hit their numbers for the 3rd quarter but reduce their guidance for 2007 which should send the stock price down.

If you want to follow the conference call but can't listen in Melly Alazraki will be blogging real time during the call. I'll update the link when it becomes available.

Tuesday, October 17, 2006

Questions the Analysts Should Ask eBay!

With the 3rd quarter earnings call just a day away I thought I would present a few questions, that need to be asked, for analysts covering eBay for their clients.
  1. How many current eBay sellers are using Skype?
  2. Why doesn't eBay adopt Skype as their own method for communicating with sellers?
  3. Are there any plans to spin off stores onto their own platform?
  4. Are their plans to change their business model and focus more on advertising than sales?
  5. Are they moving Half.com's free listings into CORE search in early 2007?

Just a few questions to start the debate. If you have additional questions let me know.

Monday, October 16, 2006

How do you Beat eBay in the Auction business? One Category at a Time!

Check out my latest article on Associated Content.
Colbert Demands Royalties From YouTube/Google Merger

eBay to Report 3rd Quarter Earnings on Weds. 10-18-06

eBay is set to report 3rd quarter earnings on Weds after the bell. According to this earnings preview from Business Week "Wall Street remains mixed on whether eBay's efforts to reinvigorate core growth are working."

I can't wait to see how the market reacts to eBay's numbers. Has the stock stabalized or is there still some downside to account for? We will have a better idea on Weds.

Make Sure you have Permission to Sell that Product.

Recently, two large eBay sellers were suspended for 7 - 14 days for VeRO (Verified Rights Owner) violations. These suspensions could have a huge impact on their business even putting them out of business.

If you currently sell or plan to sell on eBay please take some time to review eBay's guidelines on VeRO so that you can take the appropriate steps to avoid the same fate. It is important for you to have permission to sell specific products, use images and product copy. Be Careful What You (Re)Sell On EBay

Sunday, October 15, 2006

Will Participating in Discussion Boards Help your Business?

During the 5 years I sold on eBay I never once read a discussion/message board. I wasn't sure I would benefit in anyway by participating on those boards. Now that I no longer sell on eBay and have evolved into commentator/observer and blogger on everything eBay; I've spent a lot of time on these message boards. While I can no longer post because eBay banned me I can still read them. Sure, there is still a lot of anger but I also see many productive threads that reveal the ingenuity and creativity of American entrepreneurs. Most, of these users will never have large businesses but if they can reach their personal goals they will be successful.

A recent thread illustrates my point; the OP (original poster) is struggling with eBay fees in relationship to sales and is asking for help. The responses will surprise you. Please take the time to read the thread.

Thursday, October 12, 2006

Freaky eBay auction of the day!

Hundreds of thousands of people are trying to make a living selling items on eBay but what gets the press is freaky stories like this.

Mummified Remains Are Advertised on EBay

It looks like the Mummified remains are no longer selling on eBay but check out this site for more Bizarre Auctions

Wouldn't it be nice if eBay were a respected shopping site rather the butt of many jokes.

Wednesday, October 11, 2006

PS-3 Pre-Orders a No-No on eBay

With the street date of Sony's PlayStation 3 more than 30 days away (Nov. 17th), sellers who jumped the gun and listed auctions or store listings have seen their listings cancelled and according to this blog some have had their user ID's suspended (though I haven't confirmed this)

I did a quick search for PS3's on eBay and it appears T&S didn't get them all. Some listings are still going on. Is eBay once again removing listings only on those items that have been reported or are they doing a simple search like I just did and removing all of them. (Apparently eBay was able to get around to this and many other PS3 listings)

I have no opinion on listing preorders for PS3's I do want eBay to apply the rules to every seller. Now why is it they couldn't remove the Louis Vuitton fakes. Selective enforcement is useless eBay.

Is eBay's "Best Match" actually the "Best Choice"?

A story this morning from Information Week is getting a lot of attention. eBay announced on Oct. 9th that they would be introducing a new search feature for buyers called "Best Match" Esteban Kozak with eBay’s Finding team (why can't they just say search team) says "With Best Match, what buyers do on the site affects the order in which listings are displayed. In other words, if buyers running a particular search often end up viewing, bidding on, or buying, a certain type of item more often, this will be factored into our relevance calculations. These types of items might then display higher on the page in subsequent searches.”

My first impression is that this will have a limited effect on the Marketplace. As most sellers know, unless Best Match is a default search the number of buyers that will choose it is limited. So we will have to wait and see what the impact will be. While I don't agree with the introduction of this feature just before the 4th quarter buying season, I will reserve judgment on the feature until I can see how it works. It may be beneficial to sellers. I just don't know yet.

Tuesday, October 10, 2006

What’s happening to eBay’s top sellers?

According to a list of the top 10,000 eBay sellers as of September 2006, generated by Sellathon.com a site that tracks eBay sellers by their feedback, some disturbing trends are developing:
  • 25% (8) of the top 32 US sellers (129,714 feedback or greater) are either NARU (Not A Registered User) or are inactive (No longer sell on the site)
  • 8% of the top 500 sellers worldwide are either NARU (Not A Registered User) or are inactive (No longer sell on the site)
  • My former ID GlacierBayDVD is still #8 even though I haven’t been doing business on ebay since mid February of 2006.
  • The top 4 feedback sellers on eBay are the same company (Eforcity, EverydaySource, Itrimming, and AccStation)

Some more facts:

  • The top 10,000 eBay sellers range from 8333 feedback at position #10,000 to 410,805 at position #1
  • 9594 ebay sellers in the top 10,000 have less than 50,000 feedback.
  • 2 Top sellers have recently been suspended for 7 - 14 days due to VERO violations. Both sellers are long term Power Sellers.

I believe that if we check this list again in February of 2007 the number of top Power Sellers NARU or no longer active will more than double.


Monday, October 09, 2006

If you sell on eBay and have a Trust and Safety story either positive or negative, I believe my readers would love to hear it. I’ll start:

I have several stories but the issue that had the most impact on my business happened in Sept. of 2003. We were running 5,000 auctions at that time and doing very well. One morning I got into the office and checked my account and found that sales had dropped like a rock. I was very confused. After researching the problem I found that eBay’s Trust and Safety had cancelled all 5,000 of our auctions for a supposed violation of their mature items rules. Since I was a Power Seller I had a contact phone number (If I had not been a PS I may never have resolved the issue) When I spoke to the Trust and Safety representative I was told that the offending title was Old School Unrated and because this was my third violation (I have no record of ever having one violation) they had cancelled all of my auctions. I was quite upset. I said, “Old School is an R rated movie and the Unrated designation is a marketing ploy by the Studio to increase sales. It just means that this version of the movie has not been rated by the MPAA (Motion Picture Association of America)” I went on to explain “we had been selling R-Rated movies on eBay since we began”. I was getting nowhere so I asked “if she could give me a standard from which I could post items in the future”. I wanted to know the rules. She stated that “eBay does not set disclose any standards”. “Well than how am I supposed to know what to list? I asked. She replied, “If you can’t watch the movie with your 13 year old daughter, you shouldn’t list the item” I went ballistic. “That’s is completely subjective how can you have rules that are subjective?” I asked for a supervisor and eventually resolved the situation though even the Supervisor would not give me a standard to list by.

The drop in 5,000 auctions put us in a major cashflow bind as it took up to 7 days to bring sales back up. I later came to find out this behavior from Trust and Safety was not uncommon.

Lets hear your stories!

Sunday, October 08, 2006

Weekend news bits you may not have seen:

Rumors: Google-eBay Click-to-Call Marriage On The Rocks?

It appears now that this was a hoax. Hacker Cracks Google Blog

That's why I called this information a Rumor.


Articles: Can you earn a living on eBay?

As a former seller, who for many years earned a living on eBay, I have a contrary point of view on this subject. I think the title of this article should have been: Can you earn “some income” on eBay? In my view it is getting increasingly more difficult to earn a living on eBay but I believe you can certainly still make some extra cash. If you are looking for eBay to be your path to riches you might consider looking elsewhere. The cost of doing business on eBay increases every year and while it is true that there is a lower cost of entry than other traditional businesses making a living on eBay will not come cheaply. Entry is easy growth is expensive! Go into this with your eyes wide open.

Friday, October 06, 2006

Marketwatch - 10-6-2006 - Sell rating hits eBay; Google takes a breather

Quote - Among the sector stocks that were the most active in early action, eBay
EBAY 30.15, -0.31, -1.0%) , stood out, trading down to the $30 mark as investors digested news that analysts at Cantor Fitzgerald & Co. initiated coverage with a sell rating. Analyst Derek Brown also set a price target at $25 for the online auctioneer's shares.
"We find that eBay's core franchise and primary engine growth has weakened materially in recent years, as buyers and sellers alike have shifted their behavior in favor of alternative commerce platforms," Brown noted.

Another day another price target for eBay.

Thursday, October 05, 2006

Well, it appears the Pinks -- Pinks are eBay employees who participate in board discussions and are identified by their pink border -- are back in force on the EBay Stores board. What do you think could be the reason for that? For 3 months they pretty much stayed away and let the board run amok. What could be their reason for coming back? Is it to clean up the board before the 3rd Qtr. earnings report? Are they just trying to take the board back? Are they slapping boardies for their comments and deleting offending threads? Are they checking to make sure I'm no longer on the board? Inquiring minds want to know.

What are your thoughts?
I thought I would use the first post on my new blog to address a comment from one of my Associated Content readers. Here Goes:

P. Cook "Randy, it would be of great benefit to publish a structured book to help eBay sellers handle the challenges concerning eBay. As an eBay-related book author myself I feel I can advise you to not write about what's wrong with eBay in a book or otherwise without also giving your readers clearly stated methods for overcoming those problems. People want answers with immediate application. If you indulge in what's wrong with eBay without providing solutions, the value of you message will be lost. Your message is worth broadcasting - do it well. "

Hi P. Cook - I thought long and hard about your comment and agree with it in theory. The articles I am currently writing are meant to identify the problems facing eBay sellers. They are more about the future of eBay. They are meant to help sellers think more independently. I hope this approach serves many purposes, one of which is to keep the debate alive. At present I am left to offer only my interpretation of eBay's future because eBay remains silent on what their plans are. I agree with the need to offer solutions and I plan on doing that as soon as the “New” eBay is revealed. Trying to make the “Old” eBay work seems to be a fruitless exercise.

I have decided though to make a small change in how I proceed based on your comments. (Who says I can't listen and learn) In the future I will be posting articles on Associated Content that Identify problems and if possible offer solutions, please realize that the current state of eBay in many cases does not allow me to make concrete suggestions. Case in point. I have often stated that eBay should be used as a Customer Acquisition tool and feel if I had a firmer grasp on eBay's plans I could offer some concrete suggestions instead I am left with discussing principles and suggesting strategies that may or may not work in the "New" ebay.

As far as a book is concerned my goal would be to tell my story rather than teach. I really believe my story could be used as a case study on e-commerce for the small business.

Associated Content is better suited to the types of articles you suggest so I have launched this blog to continue my comments and criticism’s of eBay. I would love to hear further comments.

Thanks!
Randy