Monday, August 20, 2007

One Difference Between Amazon and eBay!

While there are many differences between Amazon and eBay, one does stand out to me: Amazon communicates better than eBay does.

eBay began a crackdown on sellers, back in June of this year, without making that information public, nor did they reveal to sellers what the rules were. They just restricted them if they fell within the bottom 2% of sellers. Sure they worked with some of the larger sellers, but for the most part the smaller sellers had to fend for themselves. The rules and guidelines were very vague. It took eBay until last week to announce what the rules were and that announcement came with an apology from Phillip Justus, Senior Vice President Auctions.

"It’s also clear we need to do a better job communicating with sellers on these issues, and helping them understand what to do to avoid problems, or resolve them after they’ve occurred. My hope is through better education and communication, those sellers who are impacted can change their practices quickly and as painlessly as possible for their continued success and the good of the whole marketplace."

I'm sorry if I consider this apology disingenuous (I love using that term). I've been around eBay since 1999 and this is their "modus operandi". They only communicate when there is sufficient stink around their decision or action. I've heard eBay management say over and over again through the years. "We've heard you and we need to do a better job at that" yet they continue to operate the same way. See my post eBay Live! - Let's Walk Down Memory Lane!

Amazon, on the other hand, announces that there will be restrictions in place for the the Toys & Games category in the 4th quarter, giving sellers enough time to adjust their business. Auctionbytes has coverage of the announcement. Amazon Places Holiday Restrictions on Third-Party Toys & Games Sellers

"Effective September 19, 2007, will not be accepting new sellers to sell within the Toys & Games category. Effective November 19, 2007, existing sellers who do not meet certain performance criteria will be unable to sell products in the Toys & Games category during the period beginning November 19, 2007 and ending January 7, 2008. The Holiday Selling Guidelines for the Toys & Games category are the following:
  • Seller must have been selling in the Amazon Marketplace for the 60 consecutive days preceding November 19, 2007.
  • Seller has processed and shipped at least 25 orders total during the lifetime of seller’s account (does not need to be in the Toy & Games category).
  • No greater than 5% negative feedback rate for the last 90 days.
  • Must have feedback received on at least 5 orders for the last 90 days.
  • No greater than 0.5% seller fault claim rate for the trailing 90 days."
The difference between the two approaches is that eBay sellers must react to the changes eBay makes while Amazon sellers get to prepare for the changes. Is it any wonder eBay sellers are working hard to transition their business to Amazon?

Now, there is one caveat to this discussion. Sellers should not be dependent on any one marketplace and I would suggest that they not delay their own web presence just because sales are good and they communicate better at The River" (Amazon). A marketplace is going to look after their own interests first, which means, when times are tough (see eBay) Sellers will get the shaft. Much the same way employees get laid off during down times in a business.

Sellers need to grab as much control of their business as possible so that they are not dependent on any one marketplace but at least for now it appears Amazon wants your business.


Anonymous said...

"but at least for now it appears Amazon wants your business."

"Effective September 19, 2007, will not be accepting new sellers to sell within the Toys & Games category."

It sounds like they want less "of your business".

Snarkiness aside, it's really interesting to see Amazon directly get involved in the supply vs demand equation.

eBay's reaction to a flooded marketplace is to crank up fees to discourage the supply side of things, while Amazon simply shuts off the hose. Both can be really frustrating for sellers but are aimed at long term health of the marketplace.

It's quite a leap from the old thinking of "more items = more selection = good".

Randy Smythe said...

Yeah, Amazon still controls their marketplace, they just give sellers notice. I believe Amazon allows new sellers again in the first quarter.

Sellers need to control their own destiny, open a website, market to their existing customers and work hard at bringing in new customers.

It certainly isn't as enjoyable a business as it used to be. New sellers beware.