Monday, August 27, 2007

Is eBay Trying to Become Amazon?

I spend a great deal of time reading message boards, blogs, articles and emails from readers, some would say way too much time. With the launch of eBay's new home page and the redesign of the look and feel of search, I've read a number of comments and analysis that eBay is trying to become more like Amazon. I believe this is true but not because they are changing the look and feel of the site.

While I believe eBay is trying to be more like Amazon in many ways, eBay's changes to the look and feel of the site are more of a response to the changes in ecommerce. If eBay doesn't improve the UI (User Interface) then new buyers won't even bother to shop there. So, these changes are long overdue. BTW, I like the changes to the look and feel.

Where, I believe, eBay is trying to become more like Amazon is in control of the marketplace; T&S initiatives and Finding 2.0. For so many years eBay has ridden the coattails of their mantra "We are just a venue" which gave them tremendous legal wiggle room, when it came to fraud, counterfeits and the negative side of online commerce. The SOP (standard operating procedure) was not control of the marketplace but supervision. Those days are long gone.

In order for eBay to deal with a maturing marketplace they need to exert control over the marketplace and mold it into their new vision. They must control the buying experience and by exerting that control the eBay seller will face the brunt of any changes. Change is not fun, especially when it is being forced on you. Is it any wonder there is some friction in the eBay vs. Seller relationship?

eBay Sellers are independent types with small operations, even the biggest business on eBay is small to the rest of the world. For many of these small businesses even the smallest change or restriction can have a major impact on their business. So you can imagine the ulcers that are being created by eBay's new rules.

One major difference between eBay and Amazon, in this regard, is that eBay is forcing change on sellers who were used to running their business in a certain way, while Amazon is enforcing the rules up front. It is always easier to control the seller at the beginning of the relationship rather than many years into it. eBay must make these changes to survive (I know that sounds ominous) but the future of the eBay marketplace business, requires them to exert control over it. Where eBay is failing miserably is in the execution of these changes.

Rather than partnering with their very loyal sellers and being up front with them that serious changes were needed, they basically said "this is our marketplace and if you don't like it go someplace else". Well, up until recently there was no place else to go. Amazon saw this void and expanded their 3P offerings, benefiting from the unrest in the eBay marketplace. A migration began that is still in its early days. Many large sellers have moved a substantial percentage of their business to Amazon with plans to make eBay nothing more than a marketplace to recover some of their investment in inventory, that doesn't move elsewhere. In short, they will sell their crap on eBay to get some of their money back.

Substantial change is needed to turn around the eBay Marketplace, but due to eBay's poor execution they've pissed off one of their most valuable assets; the seller. They once had an emotional hold on sellers that they have since lost in great measure. The hammers of control have landed too many blows. Shortly, the only move left for eBay will be the Carrot of incentives and how will that go over with investors?

In all my years being involved in ecommerce, I never thought I would see eBay moving more towards the Amazon model rather than the other way around. Amazon sees a wounded opponent and is ramping up to reach out to the best of eBay's sellers leaving the newbies and poor sellers to fight for what's left of the eBay marketplace.

It is imperative that eBay make some of these changes but they must include the seller in the process or Amazon will continue to take their best and brightest. A quick note to Amazon management: Make sure to partner with your sellers rather than manage them so you don't have to deal with these same issues down the road.