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 Overstock.com 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).

4 comments:

Biddy said...

As an owner of two (and soon to be three) eBay stores, it just breaks my heart that eBay don't seem to understand how they work. Though eBay deliver less traffic to the front of my stores than this time last year, because of changes I've made myself, my page views are up, my sales are up, my profit is up: there *is* still money to be made through eBay stores. But if eBay would work with us, we could all make a whole bunch more!

Randy Smythe said...

Hi Biddy!

Yes, it is sad that eBay cares less about store/shop sellers than it does about investors. (BTW, I always refer to eBay in the singular rather than plural in case my grammar seems improper)

Only time will tell if this is a faulty strategy. Right now the most vulnerable area on eBay is the Stores/Shops. If Google decided to get into this game that is where they should start. Forget auctions! Stores/Shops are the chink in eBay's armor.

Christy's BookNook said...

I agree with your comments about eBay and other venues stepping in to "one up" their so-called business model. eBay seems to shoot themselves in the foot as they struggle to be relevant in a changing market.

I left eBay when the price of Stores went up so dramatically. Check out Wagglepop.com. While still in its infancy, the sellers and buyers are wonderful and the price is definitely right! It's another type of business model that, I believe, will work.

christy

Anonymous said...

I have to agree with Christy in regards to wagglepop.com. The price is definitely a good deal and buyers are finding the stores on wagglepop.

Ann