Tuesday, November 06, 2007

2008 - eBay's Year of the Seller!

In 2007 eBay management said they were going to concentrate on the buyer experience and called 2007 the "Year of the Buyer", well I can't actually find any quote where they said that but 2007 was considered the "Year of the Buyer". Here is Bill Cobb's State of eBay announcement from January of 07'

2007 - Year of the Buyer:

  • Reinvest in eBay's core by simplifying the site, improving finding, and accentuating the things that make eBay fun and unique. (Finding 2.0, Widgets, eBay Desktop, Bid Assistant etc.)
  • Take a more proactive approach to Trust & Safety to protect our members from fraud. (Safeguarding Member IDs, etc.)
  • Improve the buyer experience on the site by holding sellers to higher minimum standards (T&S Crackdown, Feedback 2.0)

Many of these changes greatly affected sellers who were still reeling from the fee increases of Aug. 2006. There is some evidence that a large number of sellers have left the site or moved large portions of their inventory to other sites, with Amazon getting a large share. So what does eBay do for an encore? Well, I'll help them out.

They should make 2008 "The Year of the Seller". I would look for Bill Cobb or whomever is in his position (sorry couldn't help it) to announce initiatives that benefit the top eBay sellers, category specific pricing, free gallery etc. We are already seeing movement in this direction as management tests what type of pricing will give them the most bang for their buck (three extended promos since Sept. 1st, each very different from the next)

The only question I have is: Will this new focus on the seller be "a day late and a dollar short" The seller/management relationship is tenuous at best.

I would like to add a few suggestions to their list:

  1. Allow sellers to link out to their own websites from Core listings. That would make the expense of CORE listings more palatable.
  2. Include Store listings in search (now that they supposedly can handle it with Finding 2.0)
  3. Provide FVF discounts for return customers.

I'm sure I can come up with about 100 other suggestions but these will suffice for now.

So what happens in 2008 for Investors? Well, IMO, much the same as happened to Sellers this year. Investors will probably not be too happy with the changes. Bob Peck of Bear Stearns has already suggested that there will be margin pressure in 08' due to the need to improve seller economics and Jeetil Patel of Deutsche Bank says the margin pressure combined with problems with demand will cause further pressure on the company's profits. I would look for real volatility with the stock in 08' but that is just a layman's opinion.

So, we can already see what these changes will bring in 2009 "The Year of the Investor" when eBay once again focuses on the bottom line and investors. (Can investors wait that long?)

In theory, these changes should right the eBay ship and make all three constituents (Buyers, Sellers and Investors) happy come 2009. IMO, 2008 is the key year for eBay management. If their efforts on improving buyer experience take hold with buyers and they can keep sellers on the site then improvement will be evident towards the end of 2008 and eBay can once again concentrate on investors. If these changes do not accomplish what management wants then by the end of 2008 Investors will be jumping ship.

Lastly, as I wrote this post I thought, "this is actually a very nice plan" and hope that it works out for each group involved. Sellers will come back to eBay when it once again becomes a viable marketplace for their business. Investors may sell their shares as margins are pressured but will come back when things improve. The jury is still out whether buyers will come back. Let's hope they do for everybody's sake.

Just my 5 cents!


Scott said...

Interesting blog Randy!

I agree that more needs to be done by eBay to promote selling. eBay seems to have forgotten its role in the process and with huge growth comes bureaucracy and bloated management.
If you wouldn't mind I would like to insert your post and a link to your blog in our new eBay blog http://allbusinessauctions.wordpress.com/. Maybe as sellers we can all share interesting insights and information "outside" of eBay.
All Business Auctions

Boycott Ebay said...

You left one thing out, Randy. Unless Ebay does something major to plug up all the security holes and scams on its site, many buyers and sellers will never return.

Randy Smythe said...

Thanks Scott!

Boycott eBay
Yes, management does need to fix the security issues and stop the fraud. This effort will probably result in more control over sellers which will just increase the exodus.

Anonymous said...

2008 is way too late. Every week I'm helping another powerseller get off of eBay and onto their website. eBay needs what every healthy marketplace needs...competition. Bring in Jack Ma and let him work with Google to bust eBay's doors down.

Scott said...

Highest sales figures in the history of retailing. Over 230 Million registered Users...
The highest levels of security of any e-commerce destination...
Sells more automobiles than all of the other online auto sales sites combined...
That's eBay...
Tell me, all of these off eBay websites your designing... Where do they get their traffic?
A smart online retailer should take advantage of each and every opportunity presented, including using these and any other online destination websites.
Lets be less reactionary and more realistic, use what is available as a tool to attain the goal of adding to your sales numbers.
eBay is the biggest and baddest tool in the box... Use it with skill and it will pay you well. Use it carelessly, and you may get hurt.

Anonymous said...

Well durrr, of course we're utilizing flow through traffic from eBay sales. It's just that eBay is no longer a profit center anymore. It's a marketing tool that is dispensable. Also, if you understand advanced SEO and how to generate quality traffic inexpensively, you will be very surprised just how trivial eBay is. One of my clients is getting 5,000 hits per day on natural search from SEO. That is quality traffic. In my opinion, he would need to spend perhaps $10K/month in eBay fees to draw the same traffic with the service, support, and margins from the eBay part of the sale being fairly burdensome. But yes, we do the eBay part anyway, it's just becoming less desirable every day.