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”.


Jobvoices said...
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Biddy said...

We'll be there, Randy - we'll bring you some tea from jolly old England if you like ;-)

Randy Smythe said...

That would be nice Biddy, thank you.

Hopefully we can meet up.