Saturday, March 31, 2007

The Great Migration - The Meltdown

Wow, that was fast! You can always tell when some event (in this case a blog post) is having a major impact on eBay because eBay spokesmen and women will be all over it. eBay Spokesman Brad Williams (that's the first time I've heard that name - Where's Hani Durzy?) spoke with Ina Steiner of Auctionbytes to quash the rumor that a Store fee increase was imminent. Also in a post on the Stores Discussion board thread Is Scot Wingo right? Is this coming soon? Lori from eBay wrote the following:

“Hi All - For those of you that may not have attended today's Stores Brown Bag Lunch, I thought I would reiterate our comments on pricing. Scot Wingo's speculation on Stores pricing is wrong. We do not have any plans to increase eBay Stores subscription or Store Inventory fees at this time. As always, we will continue to communicate any such changes to the Community in a timely, comprehensive way. “

What is telling, is that the pain of last years Store Fee increase is like an open sore and it just hasn’t healed. If you read the comments to Ina’s blog post and to the discussion board thread after Lori’s post you can see that eBay has/have certainly burned some bridges. Basically, as I read it a large segment of the seller community no longer believes anything that is said by eBay as the image on post number 107 of the Scot Wingo thread illustrates.

I’ll continue to write about the inevitable fee increase and encourage sellers to expand to other marketplaces because there are not sufficient reasons to count on eBay for long-term viability.

What I would like to hear from eBay is: “there will be no Store Fee increase through the end of 2007” - that I would believe!

Thursday, March 29, 2007

The Great Migration Has Begun!

Here’s a question for you: Where do you put half-a-million eBay store sellers when they leave eBay? The Answer: Yahoo Stores, Amazon webstores and about 25 more webstore solutions available right now. My suggestion to those solution providers is prepare because the “Great Migration” has begun. This is eBay’s version of “Ice Age”

It all started simply, with a blog post by Scot Wingo on his eBay Strategies blog, where he predicts a sizable fee increase for stores coming down the pike. What is different from this year’s possible increase to last years you might ask? The answer is Google and their PPA profile for AdWords. Now even a small seller can afford to advertise using AdWords with PPA (Pay Per Action)

The funny thing is just the rumor of a fee increase has caused such a stir that sellers are frantically searching for an off eBay solution. My take, even if eBay doesn’t follow through on a fee increase – which I think is inevitable – the mere idea that they would do this again, so soon, has forced sellers to realize that their long-term viability requires them to get off of eBay for all but their high velocity sales.

My advice to sellers – start looking at other platforms. Also, you might look at increasing your prices incrementally over the next several months in preparation.

Tuesday, March 27, 2007

Google AdWords PPA will Save the Long Tail!

Can you tell I like Google’s new PPA idea? When I was selling with Glacier Bay DVD and was trying to increase search activity to my website I looked at Google’s AdWords as an option but quickly came to realize that with my limited resources it wasn’t a viable solution. I couldn’t take 6 months to fine tune my ad campaign and I didn’t have the cash to take a chance on the program. Had PPA been in existence that would not have been the case.

With Google's PPA program, an online seller is no longer limited to finding the perfect keyword list, since they can choose a set fee ($1) for a specific action (sale) a seller can now list all of their keywords and need not worry about click fraud or spending too much on clicks that don’t convert -- the Long Tail will now be available in search. I had over 200,000 SKU’s but could only afford to advertise a small number of keywords; with PPA I could list all 200,000 titles knowing that I will only pay if there is a sale. Imagine the opportunities!

For eBay Store Sellers they now have options: they can move off eBay to their own webstore and advertise through AdWords PPA or they can now afford to advertise their eBay Store products through Google AdWords. They can use eBay's referal credit (75% off the FVF) to drive buyers to each of their items, for example, on a sale of a $10 item they would normally pay eBay $1 in FVF, with the referal credit they would get a credit of 75 cents. As long as their fee for PPA was less than 75 cents per sale the seller would save money over a sale made directly through eBay.

The world just opened up to the online seller and the Long Tail just opened up to the World. Good job Google!

Google's PPA is truly a disruptive application. Here is a list of possible disruptions:

  • Currently 37% of all product purchases originate in search; that percentage will grow exponentially as there will be no need to go to a marketplace like Overstock, Amazon or eBay to find the product you want. IT will now be found in Google Search. Sure Amazon, Overstock and eBay will continue to do business with their existing customers but this effectively puts a damper on growth.

  • Google Checkout will see its adoption rate increase as Google merchants get priority placement in search.

  • Affiliate Programs will be affected. Google's PPA has just become the "World's best Affiliate Program".

  • The seller of the Long Tail can now afford to advertise; benefiting small business and empowering buyers searching for that hard to find product.

  • eCommerce will grow by leaps and bounds. Buyers will start most of their product searches with Google.

  • 3P (Third Party) Sellers now have direct access to search at a manageable cost, sure they will stay on sites like eBay, Amazon and Overstock for access to their customers but the door has been opened to the rest of the world now.

  • Big business still has the advantage because they retain pricing power.

I'm sure there are many more disruptions that I have neglected to include but you get the point. This is going to be an interesting year.

Monday, March 26, 2007

Google PPA – The Giant Killer!

Google recently announced their AdWords Beta test for PPA (Pay Per Action) This new approach is a reaction to the ongoing problem with click fraud as well as a natural move toward pay for performance. As ad rates increase advertisers are increasingly looking for a way to guarantee results for the ad spend.

The details of the Beta test can be found on the Google AdWords blog. In my view PPA is a fantastic new opportunity for sellers to advertise their products. The Long Tail will benefit from this approach by allowing sellers to list more items without having to worry about marketing costs getting out of control. This approach may have a substantial impact on eBay because they derive the greatest portion of their revenue from listing fees. This is going to be interesting.

Tuesday, March 13, 2007

Is eBay Worth it?

I came across a great thread today on the eBay Store Discussion board that illustrates the problems facing some eBay sellers. Please check it out and leave your comments here on the blog.

eBAY - for the average person (selling) is a waste of effort.

To be fair, this is the OP (Original Poster's) viewpoint and a great many sellers still view eBay as a great way to make extra cash, a second income or a primary income as you will see in some of the responses to the OP. Many enjoy the process, so they don't care what they make on an hourly basis and others are still doing well in the Marketplace.

Discussion Board warning: Some comments are a little over the top but I think this thread presents at least a slice of the eBay seller prespective. It is interesting none-the-less.

Sunday, March 11, 2007

Squidoo a Great Social Networking Tool for Online Sellers!

I've been playing around with MySpace 2.0. Oh, that's right it's not called MySpace 2.0 its called

Sure, right now there are fewer than 100,000 profiles on the site (Squidoo calls their profiles Lens') but they have developed an excellent tool for online content creators and especially online sellers (eBay sellers in particular).

MySpace is certainly still much more fun then Squidoo and my guess is the average age of a Squidoo member is much higher than on MySpace but Squidoo is geared to helping content creators make some extra cash. You aren’t going to get rich on the site but if you have a blog, website or eBay store it will provide you with the tools to promote those assets. Imagine what would happen if MySpace added that capability.

Check out my “Lens” for an example of what you can do. Since I don’t currently sell any items I have added links to other stores, websites and my blogs. … compare this to my MySpace Profile

Traffic is building at and of course the site is the brainchild of uber marketer Seth Godin so check it out and develop a taste for Calamari.

Sunday, March 04, 2007

Delays in Listings Showing in eBay Search!

It looks like the new fraud prevention initiatives and search engine “improvements” that eBay is working on are having an effect on when sellers items are indexed for search. I came across a thread on the Stores Discussion board that discusses the problems sellers are facing.

Here is the disclaimer sellers are reading when posting their items.

“Attention Seller:
You are about to have your listing placed on the eBay site. Your listing will be searchable by item number and available in My eBay. Your listing however may not be immediately searchable by using keyword or category search until a number of hours later. For this reason, eBay cannot guarantee exact listing durations with respect to availability of keyword or category search. By clicking the Submit button, you accept these conditions.

We sincerely value you as a member of our trading Community and look forward to a continued successful relationship with you.”

I’ve highlighted the area of most concern, and here is the problem: Sellers are being charged a listing fee to provide exposure for their item. If a seller lists an item for a 7-day duration then they expect 7 full days of exposure. The eBay duration clock begins the moment an item is listed on eBay but since according to eBay the item may not be searchable for an open ended amount of time, in some cases 6 hours or more, then the seller is not getting full value for their listing fee. Sure eBay has protected itself legally with the disclaimer above and I’m sure accurate timing of the actual duration may be a technical nightmare but that is not the responsibility of the seller. Sellers, pay eBay for a service they should get what they pay for. Buyers expect what they pay for from Sellers should Sellers not expect the same from eBay.

I’m not debating the fact that most items are purchased in the last 12 hours of a listing or that the impact of 6 fewer hours of exposure will mean that the item won’t sell. It is a matter of principle. Everyone should get what he or she paid for. Conversion rates are on the decline, reduced hours of exposure will just add to that problem. Fees are raised every year to appease Wall Street but service continues to decline.

What is the solution? I don’t have a solution and to be honest that is not my responsibility; eBay is the vendor here. EBay is sitting on $3 Billion in cash and buying back another $2 Billion in stock, how about throwing some of that money at fixing the problems on the site instead of hiding behind a legal disclaimer? Jeez! When is someone at eBay going to give a damn about sellers!

Everyone says if you don’t like the venue then leave and of course this is true but where will they go? eBay has done a great job monopolizing the Auctions market where else can they go? eBay certainly will not make changes because a few sellers complain. The only things that will force change at eBay are real competition, government regulation, or a drastic exodus of sellers. The sad part – if they just threw sellers a bone every once in awhile they would have their loyalty for life.

I think it is appropriate that eBay is holding their eBay Live Conference in Boston this year. Maybe it is time for another Tea Party.