Monday, April 30, 2007

eBay Town Hall with Bill Cobb Today!

If you are interested in what is happening on eBay these days, listen in on the eBay Town Hall meeting today. Bill Cobb will answer sellers questions. Most of the time the questions are screened so they generally are not too interesting but if you get a chance to ask a question, how about asking this? Are you planning on disadvantaging SIF for eBay Express listings? Make sure to ask about SIF rather than Stores because there will be less wiggle room on the answer. Here is the info.

Sunday, April 29, 2007

Caiman Buys Tower Records Brand

Caiman, was recently a large seller on eBay until the store fee increase drove them off the site in Sept. pf 2006. They came back for the holiday season and it appears have left eBay for good. It now appears they have purchased the Tower Records Brand and website for $4.2 million.

Here is the story.

What is eBay Doing Now? Testing! Testing!

A friend of mine suggested I search on the word "twine" and see if I came up with the same result as she did. The screen capture above is the result I received. It may be difficult to read but this result showed more than 30 CORE items (in fact there were over 200 items in CORE )and then directly below the Core listings on the first page of search were Express listings. No store listings were to be found. It was indeed a test because I asked some other sellers across the country to do the same search and they received normal results.

Now, what are we to make of this test? It appears that eBay wants to determine the most productive method for displaying Express items in search and this was one attempt. I would imagine this approach would not go over well with either Core Sellers or Store Sellers.

It is hard to figure out what they are doing. They certainly have a commitment to growing Express so it is possible that Express listings will replace SIF listings from stores. Of course that approach will not go over well with Store sellers who are paying good fees for limited exposure as it stands right now.

This is just a test, but it does provide a glimpse into their plans. With the addition of the Express tab to the new header on it is evident they are making a huge effort to drive buyers to Express. Is this there next move?

Click here to see Scot Wingo's take on this testing.

UPDATE: Here is eBay's response to the Stores Community on the Store Discussion Board.
It looks like, according to this statement, Express items are not replacing Store items but that Express items are getting much better exposure than Store items. In essence this picture represents EIS (Express in Search). Question for you, if SIS (Stores in Search) was so bad for the buyer experience how does EIS improve the buyer experience?

Friday, April 27, 2007

A Look Behind Amazon's Q1 Numbers.

I came across a interesting summary for Amazon's Q1 results and how Wall Street has bid up the stock substantially.

"the company said it sold $3 billion worth of books, home electronics, groceries and other items between January and early March, but came away with only $115 million in profit. "

Hey, when you are a retailer of that size, low single digit (percentage wise) profit is to be expected. My question is where would they be profit wise if they didn't have the revenue from their marketplace business, where the only costs are marketing costs? My guess, somewhere way south of $115 million.

I would love to see their results when you take away Media and the 3P (Third Party)Marketplace business. Would the market reaction be a little more muted, perhaps even bearish?

Thursday, April 26, 2007

eBay Feedback 2.0 is Here!

I've written about this before at The Seller Evangelist but since the change is imminent for the US site I figured I would revisit it.

Here is eBay's announcement regarding Feedback 2.0

Here is Scot Wingo's View after speaking with UK Sellers who have had Feedback 2.0 for about 8 weeks. "So far everyone has a 4.5-5.0 stars on their DSRs so how will this help eBay differentiate sellers from each other."

Here is Biddy's view from the Tamebay Blog.

Now my view:
I don't think Feedback 2.0 will have as much impact on sellers as many think. Most buyers are lazy and if the transaction was favorable they will either not make the effort to rate the transaction further or give it all fives. The negative people are of course going to be negative regardless. If as Scot said everyone has a 4.5 to 5 Star rating this new Feedback is as pointless as the old.

Take it from a guy who had 267,000 positive feedback and maintained a 99% rating until the month I closed down, feedback is pointless after you get 1,000 or more positives. Look at the Media Category, Movie Mars is the largest media seller on eBay and they have a 98.1 feedback rating but has that affected their sales? Not in the least. They are the lowest price so they get the sale most of the time. It may impact smaller sellers with under 1,000 feedback but those sellers are usually the ones doing everything right.

So, adding star ratings to feedback is not going to have any affect. Most, if not all, sellers will rank 4.5 to 5 stars in each category. This is a huge PR move for eBay to reach out to buyers and nothing else.

Wednesday, April 25, 2007

eBay Still Buying Google Keywords for Glacier Bay DVD

I thought it was pretty funny when I searched for Glacier Bay DVD on Google and saw a sponsored ad from eBay. I shut down Glacier Bay in January of 06'. Most likely they just haven't removed the words from their keyword program but I was flattered none the less.

If you type glacierbaydvd (my old user id) or Glacier Bay DVD you get sponsored ads on Google, Yahoo and MSN - The power of branding! "Long Live Glacier Bay DVD."

My Blog Utopia - Morning Briefing.

I realize since I am on the West Coast that its only morning for a small % of my readers but my friend Kevin Harmon of Inflatable Madness occasionally gives me a morning briefing about what's happening in the world of online media sellers. So I thought I would try to provide a regular morning briefing post on the blog.

Amazon News:
  • Amazon showed strong revenue and earnings for Q1 - 1) North Amer. & Internat’l media segments (books, music, video) each did $26MM+ more than expected, showing no slowdown (22%+ Y/Y growth) in AMZN’s most "mature" segments.
  • Amazon announces new Shipping credits for Sellers

eBay News:

Google News:

Tuesday, April 24, 2007

Ebay Seller Unrest based on "Implied Customer Contracts"

I wish I had come across Will Hsu's blog a long time ago. I just referred to his blog in my previous post and included a link to another of his posts called Implied Customer Contracts

This is one of the best posts I have read dealing with the problems facing eBay in a changing Internet. Please read his entire post. I just want to make a couple of comments in regards to eBay.

Will says, "The overlap between the user bases of the various companies is intriguing. This is not about the brand preferences of different users segments; but that given the same person he or she has different expectation from different companies on the way they conduct their businesses. I call this expectation - “implied customer contracts.” Brand is more about preference, value, and choice. Brand rarely illicit uproars unless something seriously goes wrong. “Implied customer contracts,” on the other hand, is much more. It limits (or opens up) the strategic options of the company whether it is a new product, a new acquisition (MSFT buying Claria), or new strategy. Customers seem to believe that there is an unspoken contract between them and the company on how the company is “allowed” to behave. Anything outside the implied customer contracts, huge displeasure is voiced as if a contract was breached. In many ways, customers are running the show more so than ever before. "

The bold font is mine. This is exactly what is happening at eBay right now. Sellers have an "implied customer contract" with eBay and I would guess that eBay doesn't believe there is any contract, implied or otherwise. The friction begins to build between sellers and eBay management until the change, fee increase, "glitch" has run its course and then the cycle repeats. Unfortunately at some point, one party "sellers" or the other "eBay" gets tired of the friction and a separation begins. Sellers eventually get tired of the "implied broken contracts" and eBay gets tired of sellers and starts to look at non-GMV businesses that don't have this friction.

Will goes on to say, "Companies need to be exceeding aware of the action it is taking today and how that action and future actions will accumulate to create customer expectations that might be a strategic weakness or strength later on down the road. Careful planning and communication is needed to really create a coherent “implied customer contract” that allows for flexibility and goodwill from its customers. It is much harder now for incumbents to change the way their customers expect them to behave. Like real contracts, I believe this “implied customer contract” could eventually become a liability. For many ‘net giants this expectation could become their Achilles heels. Clayton M. Christensen concept of “innovator’s dilemma” could become more acute than ever. "

Again, the bold is mine, this is the state eBay and Sellers are in right now. It would be in eBay's best interest to address this "implied customer contract" while there is still Seller "Goodwill" to give.

eBay 2.0 - Coming Soon to a Computer Screen Near You!

I spend a lot of time surfing the nooks and crannies of the Internet trying to gleam some insights into the future of ecommerce. During my recent digital travels I came across a blog called Hitchhikers Guide 650 by Will Hsu a former Product Manager at eBay. Will, had an excellent post on eBay Motors 2.0 and the eventual changes coming to Rather than muck up his post with my comments please read it and add your comments.

Based on what I read in Will's post:
I will say this, with the number of "glitches" that have been occurring on the .com site over the past year or so this move to A/B testing (not everyone gets it when they login) is having some impact on the buyer/seller experience. In fact "glitch" in eBay speak appears to mean, "we tested it, the test was a failure - so we are calling it a glitch". So, while Adam did say the problem with search, I posted about this weekend, was a "glitch" that is because he was told that by the "finding" team. From my cynical perspective the more likely scenario was they were testing an approach that had a major impact on sales so they rolled it back and called it a "glitch". Adam just relayed what the finding team told him. I just think eBay has a different definition for "glitch" then the rest of us do.

Update: I had asked Adam to respond to my "theory" and his response did clear this up for me. I really do want to fair with my assertions. Here is Adam's response.

Hi Randy,

It’s a thoughtful post, but I assure you, we never describe a test as a glitch, even when it doesn’t go well. In fact, part of the expectation with testing is that some tests won’t go well – if every test went well, there wouldn’t be much need for testing, right?

Glitch & bug are the same thing – eBay is a very large site with literally millions of lines of code. The site is made up of thousands of features, and sometimes, when we change one feature, we introduce bugs in another. This actually happens relatively rarely given the size of eBay, but obviously, we work as quickly as possible to fix them when they occur.

In this case, the missing items from the Store expansion was a bug, not a test.

You can usually tell when we’re testing something because you won’t be able to get anyone else to see it. Most of our tests are done on a small percentage of users (like 1%).

So chances are, if you can see it, and everyone else can see it, it’s not a test.

Take care,

I also gleaned some perspective into why eBay is A/B testing on the .com site.

Here is a comment from Will's blog.

"As I always said, “better” doesn’t always mean “better” . . . users are creatures of habit, and an “implied social contracts” drives the interaction between a company’s website and its users. For example, conversion rate goes up when Google simplifies its homepage but down when Amazon simplifies theirs; given huge overlap in user based, there is no way to predict actual user behavior by blindly following any mantra (2.0 or not). And thus, the only way is to test repeatedly and slowly roll out any changes. Make no doubts about it, any small percentage change in conversion rate will impact the bottom line. This revamp is a necessary and inevitable for eBay (in search of growth and fending off new competition), but it is a gamble nonetheless . . .

eBay is(I know it really should be "eBay are" but I write the way I speak, so deal with it) testing eBay 2.0 a little bit at a time.

Monday, April 23, 2007

Yahoo's Response to Google Purchase of Double-Click!

We pause from our rants about eBay to bring you this news from Yahoo, CEO Terry Semel.

Mr. Semel says "Yahoo's mission has long been "to be the most essential global Internet service for consumers and businesses." Translation: Yahoo has hoped to rule every facet of the Internet, from search, to publisher portals, to e-mail, to mobile applications, to social networks, to everything else. It's a vision of winning by controlling the most real estate. "

The problem is that Yahoo is becoming the equivalent of the old saying "Jack of all trades, master of none"

How to Invigorate eBay's Core Business!

Today, eBay announced a .20-cent auction-listing sale for the US site with 24 hours notice, which is a significant change to past listing sales. It looks like eBay is adapting to the changing marketplace. Previous listing sales were announced the day of the sale.

Ina Steiner suggests the change may have come from a Q&A session at the Channel Advisor conference in March but I think it is more likely that it was a combination of factors. eBay sellers have been complaining for years that they need more notice on listing sales but until eBay UK began giving several days notice on listing sales last year eBay never had any metrics to provide basis for a change. EBay is a “slave to the data” as former Senior VP and General Merchandise Manager Michael Dearing once said. I believe they only make changes when the data suggests it. So, I would suggest that the changes made in the UK provided sufficient data to make the change here in the US.

As stated in eBay’s Q1 Earnings report, the UK site has been performing exceptionally well, which would suggest that many of the initiatives launched in the UK might make their way across the Atlantic to the US site. eBay management allows Country Managers to make changes they feel will help their market grow and the UK managers have done an excellent job in reinvigorating the marketplace with category specific pricing and numerous other changes. Perhaps it’s time for the US managers to adopt some of those changes.

Saturday, April 21, 2007

Update to Problem with Search on eBay This Week!

According to Adam from eBay, the problems with search this past week were due to a glitch in the system, not the result of a test of the new "finding" system. Here is Adam's response to my blog post.

Randy, this is not an eBay test. eBay is testing many new search improvements, but showing the stores expansion header without items below it is not one of them. This is a bug, and one that eBay is working to fix as soon as possible. Take care. Adam

I know Adam very well and he is a trustworthy individual. He truly cares about what he is doing and if he says it was a glitch I believe him. I did tell him that communication between management and sellers has to improve. Maybe the upcoming PESA conference will help in this regard.

Friday, April 20, 2007

With eBay Its Always Something!

Apparently, the "finding" tests that eBay has been running this week that have limited exposure for Stores even more, are being called a "glitch". I have a suggestion for eBay; until you figure out what you want to be when you grow up why not change your logo to represent exactly what's going on. See my example. All of Google's BETA apps are free. If you want to play with the site don't charge the sellers.

eBay's New Search - Death for Stores!

Please see my update to this post here.

I thought I was seeing things for a second but nope it was really happening. eBay must be testing their new "exciting" search. Here's a picture.

It is happening site wide, according to the discussion boards. Store sellers are emailing me telling me their sales have been non-existent for most of the day.

Maybe this is the answer to all the clutter on the site -- don't show anything -- that will improve the buying experience. Store Sales are in the Toilet.

Take a close look, notice the Yahoo Sponsored ads are still showing up. But not the store item. Wouldn't you think they would want to show the one item available. Remember the slogan "Whatever IT is you can find IT on eBay. IMHO Store sellers should call eBay and ask for credits on their store fees. This is absolutely rediculous. eBay should experiment on their own dime not the hard earned money of store sellers.
This is almost too funny! Apparently eBay is now calling this a "glitch". This was no glitch! I have confirmation they have been testing the the new "finding" capability (why can't they just call it search like everyone else in the world) According to this stores thread the eBay Stores Team came back with this response.

"Thank you for writing in to the Stores Team. We apologize for the inconvenience this may have caused. Please note that we made the Finding Team aware of this issue and they quickly corrected it. Regards, eBay StoresK3"
Store owners there may no longer be a fee increase in your future but there will certainly be less exposure.

Thursday, April 19, 2007

No eBay Fee Increases through 2009!

Not to start another controversy but it appears that eBay has made a statement regarding fee increases. Ina Steiner of Auctionbytes had this title to a post this morning. eBay Announces Quarterly Financials, Says No Fee Hikes this Year.

She pulled the following quote from the Conference Call transcript . Meg was asked a question by Bob Peck of Bear Stearns, regarding fees and this was her response:

"As we think about fees, as you know, we typically do something once a year. January would be the time that we would do something, and we have not made any decisions at this juncture. I would not be putting fee increases necessarily into your model for 2008 and 2009. I think it is really our job to drive revenue per listing and GMV growth through conversion rates, successful items and ASPs.

I highlighted a section that I think is key for sellers. If she is telling analysts not to put fee increases into their models through 2009, I would see that as throwing a bone to sellers.

There is enough wiggle room in the statement for that to change at any time. This has been one eventful Conference Call.

Follow Up - To eBay Getting out of the DVD Biz!

I was able to get an actual transcript of the conference call over at Seeking Alpha and found the section where meg was speaking about the problems with the US and German sites. Here is the actual quote Meg made.

"First, as we told you last year, we continued to focus heavily on improving the buyer experience by advantaging our auction listing and discouraging lower quality, poorly-priced listings. This is absolutely having the desired effect of a cleaner site; however, as expected, this is putting some pressure on our listings and GMV growth in the U.S. and Germany; but, we still think this initiative will continue to substantially improve the buyer experience.

Also, in line with the evolution of the Internet and the changing environment around trust and safety, we have aggressively stepped up our efforts around the identification and removal of bad sellers with a variety of new measures. Some of these initiatives are impacting GMV growth, but based on feedback we have heard from our buyers and rights owners alike, they are having an overall positive effect on the health of the marketplace. "

There is no specific mention of DVD's, books or any other product category. It appears the Business 2.0 blogger I referenced added those product types.

I am seeking clarification from eBay that they are not singling out the Media category in there references to "unproductive listings"

UPDATE: Here is a response I received from eBay. This did not come from the PR department.

The question I asked was, is the quote from Business 2 accurate? Here is the response.

"I did not hear the quote or know the context of what she was communicating. As a part of improving the buyer experience though we are looking to improve the quality of the inventory on the site. What this means is removing low ASP BIN items with high shipping. Since most of this product is concentrated in media categories, her quote seems in line with where we are concentrating this effort."

Wednesday, April 18, 2007

eBay is Getting out of the DVD Business!

This subject is near and dear to my heart. I made my living selling media items on eBay for several years until I saw the writing on the wall and shut down. During, eBay's Q1 Earnings conference call eBay's CEO Meg Whiman made the following statement. (The source for this is here).

2:07 p.m. Pacific: CEO Meg Whitman is going over why eBay's sites in U.S. and Germany aren't growing faster. Two initiatives to improve the quality of the marketplaces - getting rid of commodity listings like low-priced books and DVDs, and booting fraudulent sellers off the site - are holding back growth in gross merchandise value, Whitman says. France and Italy, by contrast, are "success stories in their own right," she adds.

I've felt this was their intention for quite awhile and believed the stores fee increase was meant to accomplish this, unfortunately when your business is selling DVD's you aren't just going to close up shop because of a fee increase -- I of course closed-up because I didn't see any upside in the business on eBay. No wonder they didn't put up a fuss when I told them I was shutting down GlacierBayDVD.

There are 1000's of sellers on eBay right now that should be shaking in their boots after hearing this statement from Meg "getting rid of commodity listings like low-priced books and DVDs"

eBay will just say that Media sellers should move there product to but many sellers are already there and their sales will be cut in half (pun intended).

This kind of statement in a public forum like a conference call is irresponsible and wrong. I’ve spoken with several media sellers this evening and they are all scared to death that their businesses may be finished.

EBay, needs to immediately confirm what their plans are and allow ample time for sellers to find a solution for their business.

This is a sad day among many sad days regarding eBay.

EBay 1Q Profit Up 52 Percent!

According to the Associated Press eBay's 1st Quarter earnings grew by 52%. The share price gained 5.57% After Hours: 36.37 1.92 (5.57%) as of 4:30pm ET on 04/18/07

Here is a nice take on the earnings report from Business 2.0 If you look at the numbers, eBay should maybe be renamed PayPal as PayPal is the one leg of "The Power of Three" that is working on all cylinders. Skype generate a dismal $78.5 million in revenue. Ouch! How long will it take to make that $2.6 billion purchase price back.

eBay May Stumble Upon New Acquisition!

According to Michael Arrington over at the Techcrunch blog, eBay is rumored to be in talks with Stumble Upon to buy the company. He says sources put the price at between $40 to $70 million.

Maybe eBay has learned their lesson in regards to buying early rather than waiting (ala StubHub) until the price gets too high. Wait a year and the price will be upwards of $200 million.

An interesting recent development at eBay, to lend creedance to this rumor, is that eBay's Jim Ambach just announced that eBay would be allowing sellers to link to video hosted on approved sites. Video stumbling has been the driving force behind the huge growth at Stumble Upon!

BTW, I regularly Stumble (see my recent stumbles at my squidoo lens) and this will be a nice addition to the eBay fold. I think we will be Stumbling Upon some shopping in the near future.

Monday, April 16, 2007

eBay on Oprah!

I saw that eBay Trust and Safety “Czar” Rob Chestnut was interviewed on a recent Oprah show regarding online fraud. BTW, thanks to Scot Wingo for posting this because I’m not really an Oprah watcher.

The show dealt with online fraud and the transcript can be found here. If you are an online buyer or seller this would be a good article to read.

As Scot said in his post “Unfortunately it's never a positive when there's someone with Oprah's reach out there associating eBay+fraud so I think it was a net negative.”

eBay, faces a very difficult PR battle both with Buyers on the fraud front and with Sellers on the glitch, exposure and fees front. The only eBay group that seems to be happy right now is investors. Going on Oprah is a major move by eBay in this PR war -- the eBay brand is tarnished right now.

Wednesday, April 11, 2007

How Do You Beat eBay in the Marketplace Business? One Segment at a Time!

eBay will face death by a thousand cuts not by one fatal blow.

I am revisiting a subject I wrote about back in Oct. of 06'. It is becoming increasingly obvious that the way to compete against eBay is by attacking them a category or business segment at a time -- death by a thousand cuts. Google checkout is trying to take the non-eBay business away from PayPal, StubHub cleaned their clock in Tickets so eBay paid over $300 million to buy them. Various other sites are making in-roads and eBay is finding that in order to grow they have to reach out to the Social Networking sites like MySpace, Bebo, etc. It is my firm belief that eBay has and will maintain control of the Worldwide Online Auction business, so would-be competitors should learn from the likes of Amazon, Yahoo and and not focus on the Auction biz. Rather, they should follow the StubHub model and compete in an underserved category on eBay or if they are well financed they should attack the eBay Stores business segment, which eBay can't seem to figure out. There are 500,000 eBay Stores/Shops worldwide and eBay is “pissing off” those sellers on a daily basis

Many of the 500,000 sellers would leave completely if a well-healed competitor would dare to challenge eBay in this space. Stores are the most vulnerable area on eBay at this time but it's going to take a big guy to wrestle that business away from them.

Google seems ideally suited for this type of business but they seem to be stumbling with their ecommerce offerings. GoogleBase remains a classifieds site and Froogle has been in Beta for many years. If Google wants to get traction for Checkout they need to go after those 500,000 disaffected eBay Store Sellers. Don't try and compete in auctions instead go after the Stores business. eBay doesn't want the "Long Tail" any longer because it just doesn't move fast enough. Imagine if Google worked AdWords and Checkout into their own stores marketplace. They could write their own Stores ticket all they would have to do is whistle and the eBay Store Sellers would come running.

Just my 5 Cents! (Adjusted for eBay economics).

Monday, April 09, 2007

EBay Stores R.I.P.

Late last week eBay launched their new header. Immediately Store sellers began voicing their opinions on the Stores Discussion boards. The most frequently asked question was. Why isn’t there a Stores Tab?

I think the fact they put Express on the header and left Stores out just didn’t sit well with most Store Sellers.

Is this new header a signal that Stores are dead? I can’t get a good fix on that. eBay has communicated such conflicting messages, about Stores, over the last several years.

Here are the messages, see if you can see the Ping Pong effect that I do:
  • Last year they launched SIS (Stores in Search) Many store sellers saw a huge increase in sales but eBay management quickly made an about-face and removed Store items from search. According to eBay, SIS impacted the buying experience negatively – My opinion is it negatively affected core listings and that’s why they removed it.

  • During SIS they once again promoted Stores -- not to buyers but to sellers.

  • eBay Express was launched stating that it would include store inventory that qualified.

  • We all remember what happened last summer when eBay announced SIF fee increases of 150% - 500% and stated that Store items would be disadvantaged in search and also in Express -- Core items with BIN and Fixed Price listings would get preference in Express.

  • In March of this year they began Promoting Stores again (to sellers not buyers) – Are they committed to Stores again or are too many sellers closing their stores that they need to promote them? EBay never provides this information so all I can do is speculate. How about promoting Stores to buyers?

  • In the 1st Quarter of 2007 the Stores Team launched new Promo Boxes and Markdown Manager, not really a sign that they have thrown in the towel on Stores is it?

  • On April 1st -- listings were added to Express further disadvantaging store inventory. sellers do not pay listing fees.

  • In the last several weeks Scot Wingo of ChanneAdvisor predicted a new Store Fee increase because of the messaging he was hearing from eBay about “unproductive listings” and the trends he was seeing in SIF growth. eBay quickly stepped in to say there was no planned increase in store fees. Many Stores Sellers just laughed at eBay’s response. It is inevitable that there will be a fee increase - We're talking about eBay here.

  • Now they launch a new header that appears on Basic Stores (Featured and Anchor Stores can remove the header) as well as every other page on the site. It includes a link to Express but not to Stores.

What, is the plan here? I’ve looked at this over and over and I can’t figure out what eBay is doing. Why is it so difficult for them to clearly articulate their plan for Stores? If Stores are to be a vital part of the eBay marketplace then promote them to buyers don’t just encourage more sellers to open stores. This isn’t rocket science here. Store items are the IT that eBay touts in their slogan. “Whatever IT is you can find IT on eBay” but they don’t promote those listings because they are "unproductive" they don’t move fast enough, instead eBay disadvantage those listings and wonder why they don’t sell. Store items are clearly the “unproductive listings” eBay is talking about. Hello McFly! If you just promoted them naybe they wouldn’t be unproductive. Buying keywords on Google for the Long Tail terms shouldn't be expensive there can't be much competition for those keywords besides what is the 10% FVF paying for if not marketing.

Note to eBay Management:
Until, you come out publicly with your plans for Stores, Store Seller discontent will continue to get worse and you will burn through any good will you have left. Why would you piss off 500,000 customers (Store Sellers)?

My suggestion for eBay management, stop looking at Stores as the albatross around your neck and start looking at them as the solution to your problems. You don't even need to make a public proclamation that you are still committed to Stores just include a flippin' tab for Stores on the new header. That small effort would show sellers you want Stores to be a part of your marketplace.

Thursday, April 05, 2007

MySpace Still Can’t Figure out How to Make Money!

I’ve written about this before but it appears the folks in FIM management haven’t been reading my posts. I saw a great article on Business week today about the trouble MySpace is having growing revenue.

“As numbers go, this one's a whopper. Last year MySpace users called up an average of 31.5 billion unique page views per month. That's as though everyone on the planet visited the site once a week. And yet, the big kahuna of social networking racked up a paltry $90 million in ad sales.”

Now, it wouldn’t be fair to say they are not growing revenue, according to Merrill Lynch & Co. analyst Jessica Reif Cohen “This year, if everything goes according to plan, MySpace could generate ad revenues of some $271 million.” I wonder where they would be without the Google Deal.

Some of their plans seem to be developing nicely “they are also working on an eBay-like service that visitors can use to sell tickets and merchandise from their personal pages. Plus, they're busy signing deals with cell-phone companies like Cingular Wireless (T ) to put MySpace on handsets. The company gets 70% of the $2.99 monthly fee that Cingular charges for its MySpace service.”

In my view there should be one focus for their revenue generating efforts, they should find a way to share revenue with the millions of users that provide the content for the site. Can you imagine millions of very active viral salesman working for you? Look what Squidoo is doing on a much smaller scale; imagine Squidoo’s revenue numbers with MySpace’s traffic.

FIM management needs to stop thinking of generating revenue in the traditional ways and include their users in their success. This will build loyalty for the site and help millions of users worldwide earn some cash. Just my 5 cents (Adjusted for eBay economics)

Monday, April 02, 2007

EBay Live 2007 – Boston Tea Party - Part Deux

There is growing evidence that store sellers are fed up with eBay management and aren’t going to take it any more, a sentiment that has historically brought about passionate protest and ushered in labor unions and government regulations, etc. In the case of veteran eBay store sellers they are protesting by moving large portions of their business to other marketplaces or their own websites/stores. Some are yelling for a boycott of listings, which IMO will have little to no impact. Some have even suggested boycotting eBay live. While that might be much more effective in getting the message out – could you imagine Meg and Bill doing their Keynote address in front of 500 people most of them employees and the press? – Boycotts have little effect if you don’t have a clearly defined list of demands and a focused plan.

Several longtime sellers have made comments on message boards over the last few days that illustrate the sentiment.

From eBayVet in response to Scot’s fee increase post: “In 2005, Ebay was 89.7% of my business. In 2006, Ebay was 55.7% of my business. In 2007, Ebay was 21.5% of my business. My business continues to grow, and each year ebay is a smaller and smaller part of it. Ebay can go ahead and raise their fees. It will have an impact, but not nearly as it would have a year or more ago for me.”

And this from OldSpartanTrader on the eBay Store Discussion board “I think eBAY still has value --- How much carp one is willing to put up with should be taken within a context of how important eBAY is to one's overall business. In our case eBAY is less than 5% of our volume --- BUT -- 12 - 15% of our time -- and 25% of our headaches.”

I recently attended the Channel Advisor Catalyst conference in North Carolina and spoke with some old friends that represent a sizable portion of eBay’s total GMV and they made similar comments. I was also struck by the impression that eBay was in the background at the conference even though Bill Cobb and several other eBay managers spoke; a huge change from past conferences. When Bill Cobb, in answer to a question about seller’s ability to scale fees, basically said that was always going to be a problem, it was clear from the responses by the audience that eBay was not the future for them. At the conference the focus of sellers was on multi-channel strategies. The overriding theme was “we are moving more and more of our business to Amazon or our own website. We are looking at eBay mostly for customer acquisition.”

As I observe the marketplace I see that most of the protest is coming from Store Sellers because, in my opinion, eBay Stores had become immensely successful for sellers and the fee increase of 2006 had a major impact on the growth of their business. In my case with GlacierBayDVD I had spent the entire year of 2005 restructuring my business for a store model and had finally turned a profit again though sales dropped by 25%. I did have a profit in the 4th quarter of 2005 but there was no hope that my sales would increase enough to make staying on eBay viable so I shutdown my business. At the time 90% of my business was coming from eBay. Fee increases had nothing to do with me going out of business. Let me be clear, fee increases in themselves are not the problem. The problem is fee increases in conjunction with reduced visibility. When you tell a seller it is going to cost you more money to sell the same or less product then you did the year before when increased visibility in conjunction with a fee increase would increase your sales and improve your growth potential, is it any wonder sellers were upset.

The recent uproar over Scot Wingo’s blog post is evidence of the open wound that still exists between store sellers and eBay management. Ebay’s lightning fast response to Scot’s prediction is evidence that they are very sensitive to the criticism, maybe because Q1 numbers will be announced shortly.

So, what is a seller to do, to get the point across to eBay management? Organizations like IMA and PESA try to lobby for seller benefits but unfortunately are not very effective. Boycotts and threats are very ineffective and almost laughable. It is clear to me that the only thing a store seller can do is what many have decided to do already -- move their business elsewhere. Ecommerce is still growing very fast but eBay is not keeping pace and competition increases each and every year. Also, “Googzilla” continues to chip away at various aspects of eBay’ business.

Where does this leave eBay? They can continue on down the road they been traveling or they can actually listen to sellers, most of whom don’t want to leave eBay. I personally have pitched a plan to them that I believe would solve their Store dilemma and though it was met with some acknowledgement I came away believing it would never happen. I hope that is not the case. I wouldn’t be writing about eBay if I didn’t believe they still had the ability to be the world’s best online marketplace.

So, if you are going to Boston to take part in eBay Live this year make sure to bring some tea with you. Who knows, maybe you can even have a “Tea Party”.