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.