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.

3 comments:

Frank Ross said...

Great post, Randy. Over the last two years, I have become increasing disappointed in Overstock and their flip-flopping. Your comparison to the Yahoo! and Amazon auctions is a great point. Yahoo! Auctions aren't even linked from the main page anymore (you have to click "More Yahoo Services" to get a roll-over that shows auctions). On the Amazon main page, a person has to scroll to the bottom, click "Directory of All Stores" to go to a site-map like arrangement that then shows Auctions (although there may be other ways to get there). Those certainly don't seem like ways to give auctions exposure and do not show much commitment to the auction platform. Yahoo's relationship with eBay may have something to do with their relegating their auctions to the back field. I'm not sure what Amazon is thinking - they obviously aren't trying very hard to compete in the auction market at all.

Randy Smythe said...

Frank, I think Amazon and Yahoo both conceded the market to eBay. Overstock never fully commited to Auctions either. For better or for worse we are stuck with eBay and they know it.

Anonymous said...

This stormy person apparently has no clue how to manage an auction platform.

Also, how can anybody be taken seriously with a name like "Stormy?"