Tuesday, July 31, 2007

I Feel Like A Real Journalist!

A few days ago, I wrote a post regarding the upcoming changes in fees on eBay France. I was slightly confused by the announcement, so I requested some help from eBay's PR department. In the past, eBay PR has not been very cooperative, when I've requested information but I have to say, I'm thankful and pleased that this appears to have changed.

Yesterday, I received an email from eBay spokesperson, Catherine England (is that what I'm supposed to call her?) She referred me to her eBay France counterpart for help regarding my questions. BTW, if you are reading this, thanks Catherine.

Today, I received an answer from eBay France spokesperson, Esther Ohayon. My question was regarding the changes in fees now that Gallery was being required on every listing. I thought it was a great idea for those already using gallery and that it certainly would help out the buyer experience but I felt it would be a huge fee increase for those sellers who did not use gallery currently, due to the increased expense. Of course my major concern was regarding media sellers. I wanted clarification regarding media items. Here is Esther's response.

"Books and Music categories benefit from a specific pricing in France, at 0.05 euro insertion fees and 9% final value fees for fixed price and auction, and at 0.01 euro insertion fees and 12% final value fees for store format. The new pricing starting Aug 28 will include gallery at no additional cost.

Store format - for all applicable categories - will also include gallery at no additional cost."

This is great news! Now that I have this information, I can join Sue Bailey, of Tamebay in applauding this move. The requirement of gallery for each listing will improve the buyer experience and the fact that store format and media items will get Gallery at no additional cost will greatly benefit sellers in these two areas. Media sellers are already squeezed enough with their margins.

Now, I hope that this will be a very successful change and it will soon find its way to other markets including the UK and the US.

Wow, first I was allowed to attend eBay Live as a member of the press and now I am getting responses from eBay PR. My Journalism Professor Dad, will be so proud.

PS. eBay France appears to be very aggressive with their changes right now. Here is a recent post from Tamebay regarding additional changes.

"Best Match" made default on eBay France

Google's PPA (Pay Per Action) Is Here!

Konica Minolta Dimage Z3 4MP Digital Camera with Anti Shake 12x Optical Zoom

I know, I'm not supposed to point out the advertisements on my blog as part of Google's TOS, but now that Google has launched the PPA network through adSense, I'll take a chance by pointing them out this one time.

For bloggers (publishers) the ad units are called Google Referrals and on My Blog Utopia you will find them on the right sidebar, just under my subscription links. Feel free to click on them and and look around the advertisers site because they are no longer paying Google (and me) for the click, instead they are paying for a completed transaction (of course if you you do like what you see make sure to purchase something). In effect, they are removing any chance of click fraud.

This helps the advertiser control their ad spend, by tying a dollar amount to an action, (subscriptions, purchases, etc.) and it helps the publisher by paying a higher dollar amount for the referral. In essence, Google has created an affiliate network.

I wouldn't suggest that publishers get rid of their PPC (pay per click) adSense ads completely but this allows them to diversify their advertising inventory and should be a win-win for everyone involved.

This also represents an excellent opportunity for online sellers to manage their Google advertising dollars, by tying the advertising amount to a completed result. For example, let's say an eBay seller is currently paying eBay $2.50 for a completed sale, that amount can vary depending on conversion rates for that item. With Google PPA, a seller can sell that same item on their website and say they will pay $1.75 for a sale of that same item, give the customer a 25 cent discount on the sale and still make 50 cents more for the sale than on eBay. For media sellers, this is a savior because they can now afford to advertise with Google and draw traffic to their own website. Had this program been available in 2005 when Glacier Bay was trying to convert to web sales, I would have chosen to stay in business.

I'm really looking forward to this as a publisher and if I was still a seller I would be all over this.

Monday, July 30, 2007

Lazy Days Of Summer!

It's that time of year when the kids are out of school, the weather heats up, the last Harry Potter book is released and so is the next big Blockbuster Movie. Is it any wonder that ecommerce sales are flat, Internet usage slows down and fewer people read my blog.

Facebook Fanatic: Explode Your Popularity, Secure Your Privacy and Buzz Your Band on Facebook

Since this isn't a political blog and eBay hasn't raised fees or made some other huge move that I can rant about, I sometimes have to stretch to find something interesting to write about. Today is just one of those days. I spent my regular morning surfing time looking for something interesting and nothing, zip, nada.

Sure I could write about eBay adding Experian Ads to each active eBay listing, that uses the free page view counter but Ina Steiner has covered that real well. I'm sure this is not the last ad we see on eBay, soon we will see sponsored ads on MyWorld pages, blogs and guides. It is clear eBay is trying to hedge their bets with Non-GMV revenue because they cant stop the bleeding in their GMV businesses.

I was going to write about a possible eBay purchase of Facebook but I don't have the energy to make my case in full. It would be tough to justify the cost of such a purchase but it would expand eBay's reach and help them continue to move away from the GMV based business. Meg, attended the Allen & Company 22nd annual conference in Sun Valley recently and strangely enough Facebook founder Mark Zuckerberg was in attendance as well. Sure, eBay's name has not been mentioned as a suitor for Facebook (until today) and the reported price could be in the range of $7 to $10 Billion but the company certainly seems to be a fit for Meg's new "Social Commerce" strategy. Sure, I have no actual information and I'm just relaying a hunch but I would look for the eBay name to be linked with Facebook in the not too distant future.

Well, that's all for now. I'll be back tomorrow with some more speculation on what's happening in ecommerce, social networking and eBay in particular. In the meantime why not subscribe to my Google Bookmarks "What Am I Reading?" for the latest news and info about the web.

Friday, July 27, 2007

More eBay Store Board Wisdom - This Time About Amazon

I occasionally spend some time on the eBay Stores Discussion Board and try an glean a sense of what the eBay Store seller is thinking. With Amazon announcing stellar earnings results and great 3P seller growth, eBay sellers have some thoughts.

One user that stand out for me is Gamerbiz - Here is an example of the wisdom in his posts. (even though it doesn't mention Amazon)

"Ebay is an auction site. I personally believe customers who come here like the thrill of trying to get a deal. [from previous post]

This is the key. Ebay is an AUCTION site. That is what separated them from everybody else on the internet.

Now, if you make your living as an ecommerce retailer, you should NOT have a store here. It is THE MOST EXPENSIVE retail operation on the internet. Ebay structured the fees for the store based on the auction format. A listing fee...for each item, in an ecommerce retail operation? That's NOT how internet ecommerce is structured.

THERE IS NO SEARCH. If you are smart, you would recognize this as pine 2x4 upside of your head. Search...is the most crucial element for ecommerce. No search = no sales. Hello, McFly?

Every week, there are posts by those who have no or low sales for your eBay stores, disbursed among the posts from those that have a TRUE ecommerce Elsewhere, and their sales are good, great or on fire. Week after week, "where are the sales in here" questions, followed up with reports that sales are fine outside of here. Do you need this painted on a roadside billboard?

If you are serious about having an ecommerce biz, an eBay store SHOULD NOT BE YOUR PRIMARY ecommerce site. It should be a small marketing gimmick. It should be part of your Squidoo, myspace, YouTube, Adwords marketing campaign. Now, if you are a small part time seller, than eBay is really your only choice. However, if you have any decent inventory and are trying to MAKE A LIVING, change your business model today. "

I agree completely with Gamerbiz on this point.

Wednesday, July 25, 2007

I've Been Kijiji 'ed

So that's how they spell it!

I got my first email ad from eBay for their new US classified site Kijiji. It was well done, the site was nice and clean but I noticed some things.

The Kijiji TOS won't let you create a classified ad specifically to drive traffic to a website, even eBay. I thought this was quite odd since they are owned by eBay and traffic to eBay means buyers on eBay. I really don't have a problem with that, I would just suggest sellers profile one or two items in their ad and suggest the viewer visit their website/eBay store for more information.

One other thing I would like to see them do; accept HTML from Vflyer -- Maybe soon.

I wanted to post a Vacation Rental ad for a friends cabin but found out Kijiji only allows basic HTML. Here is what the ad looks like on Kijiji.

Here is what the ad looks like on Craig's List. Which one do you like better?

BTW, this one email ad from eBay is more advertising than Craig's list has ever done. I can't see eBay remaining quiet very long. Look out Craig!

eBay France is Making some Changes!

eBay France, announced today that they were making it a requirement for core listings to use Gallery. The message is slightly confusing (my French is very rusty). They say they are getting rid of the separate Gallery Fee but the new modified listing fee appears to be the same total price as the old insertion+gallery fee. If this is truly the case, the change definitely helps the buyer experience but is a major fee increase to sellers who chose not to use Gallery (and many do because of the cost)

In the US, very few Media sellers use Gallery in their CORE listings because the cost in prohibitive with their already squeezed margins. Sue Bailey of Tamebay.com has posted about this and has a different take. I'm slightly confused. To me, this looks like a huge fee increase to sellers who currently choose not to use Gallery because of the cost.

If anyone here has some insight, I would love to hear it. Many thanks to one of my readers for pointing this out and providing me with the announcement translation into English.

Amazon Eats eBay's Lunch!

Amazon, has turned their 3P (third-party seller) business into a company saver, in fact 3P sales now represent 30% of Amazon's business, with a much more desirable profit margin. Their stock is going through the roof and they are raising estimates for the rest of 08'. Meanwhile, eBay's share price is stuck in the mud.

What is the big difference here? eBay management concentrates on milking the "cash cow" while Amazon grows profit by growing the top line as well (which is all GMV related). eBay's GMV business is stagnant or falling and Amazon's just keeps moving upwards.

Amazon understands retail, eBay doesn't. Current eBay management is more concerned with managing the bottom line than fixing the problem or even worse, they don't know how to fix the problem and should bring in someone who does.

There is absolutely no reason for eBay's Marketplace businesses to be stagnant while Amazon's grows leaps and bounds. Amazon continues to grow at a rate close to ecommerce while eBay doesn't grow at all. No wonder investors like Amazon over eBay.

eBay sellers, that I have spoken with, are seeing their Amazon sales grow, while their eBay sales are flat-line. This is not a problem with the seller! Let me repeat that, this is not a problem with the seller, since the same seller sells on both marketplaces.

Amazon, invests heavily in marketing because they realize traffic generates sales. eBay manages their marketing spend like Mr. Scrooge with a Christmas bonus. Amazon makes $78 million in profit for the quarter and the stock jumps 20% from an already lofty stock price, while eBay generates $375.8 million and their stock drops. What's wrong with this picture?

eBay continues to diversify away from their marketplace business while making half-hearted attempts at fixing it. Would the stock price really take such a huge hit if eBay announced they were increasing their marketing spend to reinvigorate the marketplace? Let me clue you in - Sellers will stop complaining about high fees when eBay starts delivering buyers - its all about value for their dollar. Sellers will start listing in core again, when there is a reason to.

Its time to stoke the fires and go get the buyers! Use some of that $3.8 billion war chest to split the marketplace up -- eBay Classic (auctions) and Express (fixed price). Take BIN and FP out of auctions and add 7 day FP listings to Express. Use Stores to feed both marketplaces and give sellers the tools for multi-channel sales. Sure each marketplace might not generate your beloved 18% take rate but you know what? They would start to grow again. Oh yeah invest in marketing!

Hard choices need to be made or Amazon will continue to eat eBay's lunch.

One additional thought I came up while taking my morning constitutional (sorry for that). With Amazon, you have three majors groups pleased with their performance: buyers, sellers and investors. With eBay, not one of those same groups is happy. So tell me, which strategy is working?

Update: I guess someone else thinks the way I do. Wouldn't you know Scot Wingo would be involved in the story.

Tuesday, July 24, 2007

The Harry Potter Effect

I was looking at the box office numbers from the weekend and was amazed to see that the debut of "I Now Pronounce You Chuck and Larry" took the first place crown away from "Harry Potter and the Order of the Phoenix" in its 2nd week. Adam Sandler has a huge following, so I certainly thought it would do well but conventional wisdom had picked Harry Potter in its second weekend, so this was a huge upset.

Normally, that first paragraph, is about as much time as I would take thinking about this topic, until I started reading the coverage about the release of the final book in the Harry Potter series. It appears, the release of the final installment Harry Potter and the Deathly Hallows, had a dampening effect on the Box Office prospects of the "Order of the Phoenix", in fact:

"Deathly Hallows was so popular that Warner Bros. acknowledged it took away business from the Phoenix movie; fans were too busy.

"They wanted to get that book Saturday, lock themselves in the house and read it," said Dan Fellman, Warner Bros.' head of distribution.

Hype over the release of Deathly Hallows had just the previous week helped "Order of the Phoenix" to a Box Office record.

Here is the mind-numbing impact of one 4,000 page book:

Harry Potter and the Deathly Hallows
, the final volume of J.K. Rowling's seventh-book fantasy series, sold a mountainous 8.3 million copies in its first 24 hours on sale in the United States, according to Scholastic Inc.

No other book, not even any of the six previous Potters, has been so desired, so quickly. Deathly Hallows averaged more than 300,000 copies in sales per hour - more than 5,000 a minute. The $34.99 book, even allowing for discounts, generated far more revenue than the opening weekend of the latest movie, Harry Potter and the Order of the Phoenix, which came out this month.

"The excitement, anticipation and just plain hysteria that came over the entire country this weekend was a bit like the Beatles' first visit to the U.S.," Scholastic President Lisa Holton said in a statement Sunday.

"This weekend, kids and adults alike are sitting on buses, in the park, on airplanes and in restaurants reading Harry Potter and the Deathly Hallows. The conversations the readers have been waiting to have for 10 years have just begun."

Those are amazing numbers and to have Warner Brothers acknowledge the impact the book had on the box office take of "Order of the Phoenix", is very interesting.

I wonder if the "Harry Potter Effect" had any impact on weekend Internet traffic. I would imagine it might even have been measurable; if you take several million internet users away from their computers for a day-and-a-half, it's bound to have some impact. I personally noticed lesser activity on my blog this past weekend and several sellers I spoke with said their Amazon and eBay sales were soft. I would imagine it has some effect.

Thanks for reading, we now return you to your regular blogging rants about eBay

Saturday, July 21, 2007

I Finally Have Something Contructive To Do!

As many of you know, I've been a Squidoo user (lensmaster) since March of this year and have enjoyed it immensely. I've created a personal lens on my life, a lens on being a single dad, published my Dad's first novel (we call it a Squidovel) and created a gallery of wonderful photography, travel destinations and video clips that I've Stumbled Upon. I was recently honored with the title of "Squid Angel", along with several others, a role that charges us with promoting the best content (lenses) on Squidoo and I've also become a Jurist in a monthly "Top Lens" contest. You would think that would be enough to keep me busy but I still had too much time on my hands.

As of last week, I have a new title (drum roll please). I am officially the Community Manager for the eBay Seller Community on Squidoo a wonderful group of sellers who use Squidoo to promote their eBay Stores, Websites, and online content. This community reminds me a great deal of what eBay was like in the early days. The community is very strong and active, with over 200 eBay sellers already taking part. Meg! This is the real "Social Commerce"

Now, here is the best part, this is not a staff position, I am a volunteer. I am committing my time and energy to make this a success because eBay Sellers need every bit of help they can get. As you know, I have not always spoken kindly of eBay's decisions over the years and I've done what I can to encourage sellers to open their own websites and diversify their businesses. I've said over and over again, "stop calling yourselves eBay Sellers" and begin to think of yourselves as online merchants. I'm still going to continue to do that but at Squidoo, we've created a community for online sellers to promote their businesses, it just happens that we are gearing the community around eBay sellers. It doesn't hurt that I have many years of experience with eBay.

eBay sellers, understand the role that community plays in their success and they get excited about finding ways to reach new customers (especially when they are free). What Squidoo allows them to do, is build their own brand and develop their own expertise, sharing that experience with a whole new group of customers on Squidoo. Sellers are the experts on their particular product and they can drive targeted traffic to their listings, blogs, lenses and WebSites. In fact many of them are already doing that. Several sellers get over 10% of their eBay Store traffic from Squidoo. I get a growing portion of new visitors to my blogs from Squidoo and I know of one seller who is doing very well driving traffic to her own website; see it can be done. I'm very excited to be a part of this.

The power to succeed, is in the will of the individual, not in the marketplace. Being an eBay seller provides an instant connection with over 200 other sellers and my job will be to harness that power and channel it into a community that I hope to grow exponentially.

If you are an eBay seller and are interested in more information on Squidoo, please visit the eBay Seller headquarters or my new eBay Squidoo Blog for more information.

Squidoo, is the Web 2.0 tool I've been looking for. It is much more community oriented than MySpace or Facebook, it empowers the individual to speak about subjects they are the experts in. It rewards users (lensmasters) as it grows, by sharing the revenue with them and it provides eBay sellers a vehicle to promote their products, on or off eBay.

For my faithful Blog Utopia readers, I will continue to share my views on the world of ecommerce and of course more rants about eBay and I certainly have plenty of time to discuss other issues surrounding ecommerce so please continue to visit My Blog Utopia -- I'm not going anywhere. I've just added some new tasks to my day.

Thursday, July 19, 2007

Why Can't eBay's Stock Gain Any Traction?

eBay, once again announces excellent earnings in its 2Q, 2007 Earnings Call and the stock still tanks. As of this writing the stock is down over 2%, while the market as a whole is up nicely.

What could be wrong? Management must be pulling their collective hair out wondering what they need to do to right the ship and get the stock going in the right direction. Especially since their compensation is so heavily dependent on stock options.

eBay Inc. is developing a nice portfolio of properties that are growing but the Core business is not. Imagine where the stock price would be if they weren't buying back millions of shares.

The market wants to see growth in eBay's Core business not just profit. In order to re-invigorate the CORE business they need to provide incentives to sellers. Right now, they are milking the cash cow instead of breeding it to create more cows (I'm not sure the analogy was that clear but I think you get my point).

Amazon's stock continues to perform well because they are growing. They still make a lot less profit than eBay does but their business is vibrant and growing and investors are rewarding them. eBay's Core business continues to struggle while management squeezes out as much profit as possible driving customers to Amazon.

Meg, stated in the conference "We also have a strong eBay Inc. portfolio with PayPal and Skype, two rapidly growing businesses that are very well positioned for the future. We also have the strongest senior management team that we have ever had at the company and we have talented, experienced employees that know how to get to the right strategies and also execute in an ever-changing environment in all of our businesses."

What happened to "The Power of Three"? It looks to me like they have two growing businesses, not three and one is an infant (Skype) that has a questionable future. I keep saying maybe they should change the name of the company to PayPal because unless things change soon PayPal will be the "New Core"

Why is Amazon growing very close to the pace of ecommerce, while eBay struggles to grow their GMV business? It's because they understand retail and eBay does not. While I agree this current management team is great at hedging their bets with Non-GMV acquisitions and growth, I don't believe they are the right team to grow the GMV business. Is that too harsh? Maybe they are the right team but need to change their focus from managing the downside to growing the upside.

I've said it before and I will say it again, they need to separate the Auction business from the Fixed Price business (eBay Classic and New eBay). Manage the Auction business which has matured and grow the Fixed Price business at the rate of ecommerce. Hard choices need to be made. Is this the management team to accomplish that? Sure this will cost money but investors will applaud the decision and so will sellers because they will see the ceiling raised.

Just my 5 Cents!

Wednesday, July 18, 2007

eBay Q2 Earnings - No Surprise.

They beat estimates, again. Meg, said the same things she always says. Yawn! Some things I did notice that should raise questions.

  • There was absolutely no mention of eBay Express. It appears Express is an experiment that has failed. They will either put it on cruise control or shut it down. Look for a reorganization shortly in the Express group. (Pure speculation on my part).

  • Non-GMV (Shopping.com, classifieds, Advertising) growth is out-pacing GMV growth, which is a continuing sign that the core marketplace business is declining. Look for eBay to add additional Non-GMV properties to their portfolio in the year ahead.

  • Craig's List - Meg, said they will continue to own the 25% stake in the classified service and grow Kijiji organically. I don't imagine this will be the case for very much longer.
eBay management has proven that they can manage the bottom line but investors and sellers want more. Maybe sellers should just stop listing on eBay and advertise with Yahoo and Shopping.com to bring customers to their own websites.

Distributed Commerce - A Glimpse at Web 3.0

"Distributed Commerce," is a term that is gaining steam these days in discussions of the future of ecommerce. It is a concept that will certainly be fleshed out over the next several years and in my view will usher in Web 3.0.

I may define "Distributed Commerce" differently than most, to me it is simply taking the successful business development methods used in the physical B&M world and applying them to the web. In simple terms "Taking the product to the customer rather than trying to get the customer to the product". It is much easier to get a customer to buy your product, if it is available where they spend most of their time. Banks have started to recognize this by placing branches in Grocery Stores.

Retailers have been very successful over the years in taking the product to the customer by opening up multiple store locations. WalMart started as a small chain in Arkansas and became the #1 retailer in the world by taking the product to the customer.

With today's online retail, the opposite is the case. Online retailers try to bring the customer to the product through Google AdWords, Affiliate Programs, etc. rather than develop systems and tools to bring the product to the customer. This is where Web 3.0 comes into focus. The "widget" has become the cool app of Web 2.0 but is still mostly geared towards bringing the customer to the product. What happens when the Widget becomes a full-blown store that a content site can integrate with the rest of their content. What happens when E! Online is able to sell DVD's, CD's, Celebrity Memorabilia from eBay or Amazon directly on their site rather than sending their users away through an affiliate link. Or what if Best Buy created a Store that could be integrated into Facebook or MySpace rather than rely on links from those sites, which is the current mode of operation.

Amazon, is the first marketplace to venture into distributed commerce with their A-Store, though it really is just a souped up affiliate program, it is at least an attempt to get the product to the customer. eBay is dancing around the idea as well by launching San Dimas but the execution is clumsy.

Small sellers are already beginning to recognize the need to get their product in front of the customer by developing multi-channel selling opportunities, but they are largely dependent on today's online marketplaces like eBay, Amazon, Overstock, etc. They realize that the majority of eBay customers prefer to purchase their items on eBay and the same goes for Amazon, so in order to get their product in front of those customers they need to be on each site.

eBay's auction business is struggling. Most people who want to try eBay have already tried it (at least in the US, UK and Germany) but what would happen if eBay were to integrate their auctions into a content or social networking site therefore introducing auctions to a completely new market. That same auction that struggles to get enough bidders on eBay currently would now be introduced to a complete different customer base therefore increasing the likely hood that a bidding war might ensue and the fun would return.

There are a number of content sites out there, that get a steady stream of user activity and most are not equipped to create their own ecommerce solutions. I mentioned E! Online. Their online store is, in a word, pitiful. They are publishers not retailers, they need to partner with the retailers or marketplaces to create solutions for them that will help them monetize their sites.

Who will it be? What happens if a large retailer like Best Buy decides to take this approach before eBay or Amazon, then Best Buy can grab a foothold on that site before others and negotiate a deal that keeps Amazon and eBay on the sidelines. Soon there is a land rush to stake your claim on an Online Publishers site or a Social Network. Imagine the possibilities!

It's Kind Of Quiet Around Here!

Not much of interest is going on this week. The earnings reports for Yahoo, eBay and Google are being released but nobody expects any surprises. Yahoo has 100 days to turn their ship around -- well, Jerry Yang has 100 days. eBay is in the midst of what is traditionally the slowest quarter of the year and Bill Cobb is still on Sabbatical. Google seems to be still hitting on all cylinders.

Hopefully something interesting will come out of today's eBay earnings report but I feel it will be more of the same. Some things to look for in Meg's Conference call are:
  • How Skype is doing (see how many times, if any, she says "The Power of Three".

  • Is there any indication how Express is doing?

  • Are their any hints as to what they are going to do about their Craig's List Stake?

  • How much of their Quarterly Marketplace revenue came from non-GMV related business (Shopping.com and Sponsored Links etc.)
Here's a preview of the conference call from The Streets Vishesh Kumar
TheStreet.com Senior Writer

"eBay's tougher posture comes amid concerns that the company's core auction market has martured. More-abstract efforts to reignite growth, meanwhile, don't seem to have panned out. Buying the popular Internet telephony service Skype in 2005, for example, was supposed to help the auction marketplace by making it easier for buyers and sellers to communicate.

Skype continues to show impressive growth, but it's questionable whether the $2.6 billion that eBay shelled out in 2005 has really helped the company's bottom line enough to make the deal worth it.

Going after the local commerce market, on the other hand, offers the company a much more direct way of finding new growth. And many of the skills that eBay has honed over the years -- and not to mention the observational perch it has enjoyed thanks to its stake in Craigslist -- will give it a leg up over other big Internet companies in capturing the market."

Online Sellers Take Stock
This would be a good time of year for online sellers to take stock of their situation and make the necessary moves to lessen their dependence on any one marketplace. If you are currently only selling on eBay, now would be a good time to look at other marketplaces like Amazon and certainly your own webstore.

Monday, July 16, 2007

Attack of the Verticals!

They're coming! Those wonderful little niche sites that are taking little bits and pieces away from eBay. StubHub was the first to see eBay gold, who's next?

My bet is a little site called Etsy.com "Your place to buy & sell all things handmade" Etsy, is hitting on all cylinders right now and gaining traction. Handmade items of all kinds have been selling on eBay for years but Etsy has taken a good portion of that business, in fact many bloggers already call Etsy the eBay for handcrafters.

This appears to be the model to compete against eBay. Target a segment of eBay that is not performing well, build a community of loyal buyers and sellers and grow it organically. At some point eBay will realize they've been beat and move to buy you. My guess is that Etsy's payday will come sooner than most think. Perhaps by the end of the year.

Of course they could take the approach of Craig Newmark of Craig's List fame and rebuff eBay at every turn but my guess is Etsy management is not in this for their health, so at some point they will want their payday. Update: I came across this nice article in Business Week regarding Etsy and its founder. It makes for an interesting read. Etsy may be too small for eBay at this point but so was Stumble Upon and StubHub at one time.

First StubHub and soon Etsy, what other site out there will be the next to mine eBay gold by following a simple business plan?

Any startups out their looking for their place in line follow these simple guidelines. Target an under performing segment of eBay, build a solid group of loyal sellers and soon eBay will be knocking on your door.

IMO, eBay can't create anything on their own anymore (see Express) they have to buy it now.

Sunday, July 15, 2007

What's On Tap This Week?

It's earnings season again and this is a big week for some of the companies I cover on this blog. Yahoo announces 2nd Quarter earnings on Tuesday, eBay announces on Weds and Google announces on Thursday.

Look for each of theses companies to meet or slightly exceed analysts estimates but pay close attention to their forward guidance for clues to how each management team sees the upcoming quarters. Of course Yahoo seems to be in the worst position.

I'm not a stock guy, so I don't have a clue which direction share prices will head, for each of these Internet Behemoths but it should still be an interesting week. If I get some insight into the numbers I will make sure and pass it along.

Friday, July 13, 2007

Google Announce PPA (Pay Per Action) Launch

Here is the press release in its entirety:

A New Way to Pay – Google Expands Pay-Per-Action for Google AdWords™

Google announced today the worldwide expansion of its pay-per-action advertising beta. Pay-per-action is a new pricing model that allows advertisers to pay only when a pre-defined action is completed on their site, such as when a user makes a purchase, signs up for a newsletter, or completes any other clearly defined action. Since the initial launch of the pay-per-action advertising beta in March 2007, many advertisers who have used the new pricing model are pleased with the opportunity to have more ways to promote their products and services online.

The Dip: A Little Book That Teaches You When to Quit (and When to Stick)

"Pay-per-action advertising helped our company make the most of our marketing budget," said Alexandre Douzet, Executive Vice President and General Manager, TheLadders.com, the leading $100k+ job search web site and an early adopter of Google's pay-per-action advertising model. "At TheLadders.com, we are big proponents of marketing efficiency, so the ability to supplement our existing cost-per-click campaigns with a model that rewards qualified leads makes a lot of sense to us."

Starting today, advertisers in the beta will see an alert in their AdWords account informing them that they can now create pay-per-action campaigns. Going forward, advertisers who have enabled AdWords conversion tracking and received more than 500 conversions from their CPC and CPM-based campaigns in the past 30 days will be automatically added to the beta on a rolling basis.

Pay-per-action ads are only shown on publisher sites in the Google content network, also known as Google AdSense™ for content sites. Publishers in the Google content network who want greater control over the ads shown on their sites may select between individual ads, a shopping cart of ads, or a specific keyword that is relevant to their site's content. These publisher-selected ad units contain only pay-per-action ads, and therefore, they do not compete in the auction against CPC or CPM-based ads, which are served in separate AdSense for content ad units.

With this new pricing model, both advertisers and publishers gain more precision and control over their efforts to effectively spend advertising budgets and deliver relevant ads to related website content. Pay-per-action advertising is now available to qualifying advertisers worldwide.

Google, AdSense, and AdWords are the trademarks of Google Inc.

Now You Can Search My Blog Utopia and What I Link To!

Blogger has just released a new search tool for blogs, hosted on their platform, that allows readers to search the blog they are reading and also the the content it links to. Now you can search on a term once and get all of the related links to that term.

I've added the search to the top of the sidebar. It will search My Blog Utopia and then you can use the links at the top of the results to search my Blog Roll or content I have linked to in my posts. Just click each link and pull up info on that term from the blogs I link to. It's very cool!

Take it for a test drive.

Update: It is quite interesting how a straight Google search differs quite drastically from a search of the sites I link to in this blog. This new search tool serves to surface posts and articles that are buried in Google Natural Search but are still news worthy for my readers. Here is an example: Search on the name John Donahoe (eBay's Man Behind the Curtain)

Check out the results: The first results are of my own links to John Donahoe from this blog. The next tab is Linked From Here and it surfaces a completely different set of posts that complement or add to my own posts. Finally, choose The Web tab and you get the Google main search results for John Donahoe, which are less bloggy and more corporate but still very valuable. I believe the combination of these 3 searches provides a boat-load of information on the search term. Try it for your own search term. Please let me know what you think?

This is still in Beta so there may occasionally be some issues.

Thursday, July 12, 2007

New eBay Stores Hub (Home Page)

Early this week eBay users began seeing a Stores link appear next to Express on the eBay header, as was promised by Bill Cobb at eBay Live! While some people believe this is "much ado about nothin'," it does mean a great deal to Store Sellers.

The fact that eBay is once again considering stores, as a vital part of their business, has brought a glimmer of hope back to Store Sellers. I see it as a sign that eBay is changing their perspective on stores. But, just having a link is not sufficient to prove that Stores are once again a focus for eBay -- a new Stores Hub is a step in the right direction.

I saw the new Stores Hub for the first time today. It is nothing to jump up and down about but it does look cleaner and more up-to-date. Just the fact that eBay has redesigned the Stores Hub shows that they are at least thinking about stores again. Maybe eBay Stores are no longer "The Red Headed Step-Child" of eBay (my apologies to any red-haired step children.) Of course, this could just be a PR move to placate Store Sellers (I'm so cynical.)

I like the direction they appear to be headed but I hope it doesn't stop here. While I still believe Stores should be a separate platform from CORE and include a shopping cart, I realize that is a major change and will take time. I would, at the very least, like to see a Stores marketing campaign directed at buyers not Sellers. This would prove to me that Stores are back in the mainstream thinking of eBay management. They would achieve a much greater ROI on a marketing campaign for Stores than they did for Express.

eBay should be the #1 online shopping destination in the world, not just the #1 Auction site. Help sellers create their own niche on the web and then give them the tools to promote their items. It certainly makes sense to me.

Just my 5 Cents!

Tuesday, July 10, 2007

eBay Classic and eBay 2.0

With eBay recently launching The Playground, to test out eBay 2.0, it occurred to me that they don't really need to change eBay.com, when the testing is complete. Once they figure out the new look, feel and "finding" experience they want for eBay 2.0, why not just give buyers an option? They certainly have the technology to do this -- Give buyers a choice - eBay 2.0 or Classic eBay.

Existing buyers and sellers, who like things the way they are and are comfortable with the way eBay works currently, can continue to use the eBay they grew-up with -- I'll call it eBay Classic -- the new generation of buyers, that eBay is trying to attract, can select the new wizbang eBay 2.0.

Why throw the baby out with the bath water? Coca-Cola found this out the hard way, when they came out with New Coke and stopped making the original Coca-Cola. While they did reach out to Pepsi drinkers with the new sweeter version of Coke, they caused an uproar with their regular customers. Do you see any parallels to the current eBay situation? That decision by Coca-Cola was one of the biggest debacles in the history of marketing.

I'm sure there are technical issues with running two auction platforms but they are doing it right now with "The Playground". Why not have two separate sites, after they finally decide on what works for eBay 2.0?

This is obviously not what they have planned as Meg Whitman recently said, "You'll see more changes in the next 12 months on our site than you've probably seen in the last three or four years,'' Whitman said in an interview. ``EBay was so successful that we did not keep up with the user experience that was required.''

In order to appeal to the new Internet user, eBay needs to reach out and change but they don't need to leave their existing users out in the cold. Isn't that ultimately what a good buyer experience is all about? Tailoring the shopping experience to the customer. eBay currently has millions of customers that like things exactly the way they are.

Note to eBay: Don't make the same mistake Coca-Cola made or they will be writing books and creating courses at Business School's to discuss your bone-headed marketing move. "Those who cannot learn from history are doomed to repeat it." George Santayana.

I think my Windorphins just kicked in.

Just my 5 Cents

Monday, July 09, 2007

Kijiji meet Craig!

I went through my normal morning routine today, surfing the net for tidbits, stories, gossip involving ecommerce, eBay and whatnot and the big story seems to be the eBay announcement of the launch of Kijiji classifieds in the States.

Most articles are very similar, saying that eBay is challenging Craig's list and the consensus seems to be that eBay will lose in this challenge. I'm not so sure.

Craig's list might have the mind share right now but as a business, it is a bare bones operation with a cheesy site that appeals to a small segment of the web (60's radicals). Okay, it actually appeals to a wider group then that but it would not be able to withstand even a small push from eBay's marketing machine without taking on investment, which is contrary to the goals of owner Craig Newmark. If eBay chose to, it could flex its muscle and marginalize Craig's List's in short order.

Now, why would eBay do this? They own 25% of Craig's List, wouldn't it be better for their investment if they didn't rock the boat? Unfortunately, they are a Public Company and management doesn't have the luxury of waiting until Craig decides he wants to cash out. So a little old fashioned pressure is in order. By announcing that Kijji will launch in the US eBay has put their foot down and given Craig notice. Either sell us the rest of the company or we will go after you. Of course this isn't the message coming from eBay and true to "eBay Speak" they are saying all the right things.

"EBay spokesman Hani Durzy said the company didn't launch the site with much fanfare and has no plans for mass marketing or advertising. Instead, eBay — one of the biggest online advertisers — will try to drive traffic to the site through keyword searches on Google, Yahoo and other huge sites.

Durzy emphasized that Kijiji in the United States will likely remain free for most users — but eventually the company may charge for display ads or premium services."

Source USA Today

Of course eBay launched the site without much fanfare but make no mistake it was a shot across the bow of the Craig's List ship. eBay doesn't have much patience and they won't wait too long before they "Pump it up" with the marketing. eBay wants to rule each market that they enter and that has been the operating mantra for managers ever since Meg Whitman came on board. Second place is not an option. In the not too distant future, I would look for Craig to relent and sell out (not likely because he has principals that he lives by) or most likely eBay to ramp up their marketing efforts and try to take over the classifieds business. Investors seem to think this is what's happening as they began bidding up the companies stock shortly after the announcement.

Just My 5 Cents!

Sunday, July 08, 2007

Why Do You Sell Online?

Most online sellers, whether they sell on eBay, Amazon, Half.com, Overstock or their own website, have a story to tell about why they began selling online. I'm sure many of them were motivated by just wanting to make more money but I think for a great many sellers it goes deeper than that.

Many of you have heard or read my story before. It was 2001 and I was preparing to sell my business. While I lined up potential buyers, I began to look for my next adventure. My son was collecting Pokemon cards at the time and wanted to complete his collection. So, being the great dad that I was, I set out to help him do that, even though I had no clue what a Pokemon card was.

I had been on eBay since late 1999, so I was familiar with the site but I really hadn't sold anything. I began checking out Auctions for Pokemon cards. Some of the cards, he needed, were getting pretty expensive and actually had small bidding wars going (those were the days). Now, I wanted to help my son out but I wasn't going to spend $50 on one card, so instead I decided to just buy a few packs of cards at the local store and see if maybe he would get lucky and get the card he wanted. Low and behold, that's exactly what happened saving me roughly $50 and making my son's face light up.

That's when the light bulb went off in my head. I could buy a pack of cards at the local store let my son pick through the deck for the ones he needed and then sell the others on eBay. I could help him put together his collection and possibly even make some money on the deal.

Well, I was soon buying cases of Pokemon cards picking through them with my son and then selling them on eBay and Amazon. I didn't get rich but it did get me thinking. What would happen if I found a steady source of product at a great price, would I be able to sell it at a profit on eBay and Amazon?

I began to look for items to sell, since my background was in TV production I thought I would seek out independent video producers who were trying to get their videos sold. Several of my friends had boxes of videos sitting in their garage, that they were unable to sell, so I told them I would take the videos on consignment and when I sold them I would pay them the agreed upon amount. I was doing this on the side while I ran my other business and it brought in a little extra money, at least enough to tell me there was potential with the idea.

About this time, the DVD began to rise in popularity, so I began looking for a source for DVD's. I found a surplus supplier and began buying all of the product he had. I was selling it as fast as I put it up and Glacier Bay DVD was born. eBay was my new selling venue and I sold $400,000 in DVD's the first year while I tested things out. The problem was, I didn't have a steady flow of product. Some weeks I would get 500 pieces and others nothing, before I could make this a full-time business I needed to get a steady supply. One day while surfing around on the Internet I came across a local DVD and CD distributor in my same town and soon I was in business for real. I sold my other business and incorporated the new eBay business in 2002 as Glacier Bay DVD. I was in heaven.

I had been an entrepreneur for most of my adult life but mostly in service businesses like video production, web design, computer consulting. The income I made depended a great deal on how many hours I had in a day. With this new business, it was unlike anything I had done before. I could be asleep at night and wake-up to 30 - 40 orders making me $4 - $5 each. I had found business Nirvana.

I won't go any further with this story now but it contains many more highs and lows over the next 4 years. My point for bringing it up, is there are many sellers out there with similar stories and I would like to hear them.

I recently met an eBay seller named Suzanne at eBay Live in Boston and she briefly told me her story about surviving divorce and single parenthood by creating her own eBay business. Those are the stories I want to hear. If investors, analysts and industry watchers wonder why eBay sellers are such a vocal bunch its because eBay opened the door to a bright future for many of them and over the last few years appears to be working hard to shut that door.

Once you give someone hope for a better life they are going to fight to keep it. I would like to hear your stories. Please use the comments section of the blog to tell me your story. If it is too long for the comments section please email me at rksmytheatyahoodotcom and let me know if I have your permission to share it.

Update: Store like this from B.K. in St. Louis.

"Hey Randy - I started out back in the mid 90s selling things on the internet newsgroups. Sold collectibles with no photos, had to be very descriptive and be sure and find the right newsgroup for the item I was trying to sell.

Have been an eBay member since 1998. And that EBAY word kept cropping up in the newsgroup titles and I kept thinking, what in the heck is that???? Seems like a long time ago now that eBay has taken on such a life of it's own.

I am a widow with 2 kids and have used eBay all those years to support us. It was not always my main source of income, but I sure have sold many things over the years and certainly remember the cozy community it started off as.

I still do it mostly fulltime and not much has changed for me. Don't like some of the changes, but Stores and Paypal have enhanced the selling experience for the better. It does allow
me to scrape by and stay home, which is what I like about it the most. " Thanks, B.K.

Sunday, July 01, 2007

eBay Trust & Safety Bringing Down the Hammer.

As I wrote a few months ago, eBay traditionally has had three levers available to them to mold seller behavior. Price (fees), Product (Finding 2.0 and Decreased Store Visibility) and Policy (Trust & Safety). Well, over the past 18 months it appears they have pulled all of those levers. First there was the store fee increase to re-balance the marketplace (Price), then there was the S&H crackdown and Feedback 2.0 to improve the buyer experience (Policy), then they came up with "Finding 2.0" in an effort to control product, or at least the product the buyer sees (Product) and finally they use policy in the form of Seller Non-Performance to restrict the "bottom 2%" of sellers. (Product and Policy)

Why don't sellers do what eBay wants them to do? Because they are all independent business people, entrepreneurs, and individuals. eBay created a monster when they gave regular people hope that they too could have a better life selling on eBay. They trotted out sellers like myself (GlacierBayDVD) as shining lights to the community. Look what you can achieve! They talked the talk over the years -- The Power Of All Of Us! Social Commerce! and more catch phrases. Management doesn't understand that once you give someone hope they sure aren't going to give it up without a fight. Instead of embracing sellers as the fuel that propels their business they treat them as pawns in a high stakes chess match.

What is the result? Seller discontent is at an all-time high. The anger that began with the Store Fee increases has not subsided but turned into resolution. Sellers are actively looking at their off eBay options. Multi-channel has become the rallying cry of vendors all over the Web. All because eBay doesn't realize who their partners are. Maybe this is the nature of online marketplaces and there is no real solution but the results of eBay's behavior modification tactics has driven their once loyal sellers to the edge.

In my view, the only solution for sellers who want to grow their businesses, is to create an independent online presence. Throw off the shackles of the marketplace and strike out on your own. Use Marketplaces like eBay, Half.com, Amazon and others as segments of your business not the entire thing. Don't wait until you are restructuring for the 2nd time on eBay before you make the move. Don't make my mistake of waiting too long to launch your website.

Many sellers are dependent on eBay and their anxiety increases as they see other sellers fall to eBay's T&S policies and wonder if they are next. Many are afraid to venture outside their comfort zone and look at creating their own online presence. I know it can be difficult but you owe it to yourself to at least look into it.

As we celebrate our nation's independence this coming week take some time to plan your own independence from the marketplace.