Tuesday, February 12, 2008

eBay's New Management - Now's Your Chance

Soon, John Donahoe will take over as the President and C.E.O. of eBay, Inc. and his priorities will shift from strictly concentrating on the Marketplace business, which he managed previously, to the "Big Picture" encompassing all of eBay's businesses (PayPal, Skype and Marketplaces) He has brought in some able executives to manage the Marketplace business and I for one, am excited to see what they will come up with.

Many of my readers, do not trust eBay managers and there is a widening gap between management and sellers. I have written many times about "eBay Speak" and trouble with management, but my motivation has always been, to be like the sand in the oyster, which is an irritant but becomes a pearl. A strong and healthy eBay is good for sellers, managers, employees, buyers and investors. Ultimately that is all I care about.

The eBay family (buyers, sellers, management, employees and investors) is seriously dysfunctional and not even Dr. Phil could fix it, so eBay managers need to learn how to manage the family and its dysfunction. Rather than being aloof and arrogant, as in the past, managers need to do more than just talk. The recent quick action regarding Media pricing is an example of action not just talk, but it is only the first action. eBay Marketplace Execs need to do the same thing with another category and do it quickly, so that sellers begin to understand that things have changed.

eBay is in its own little universe. You never see the turmoil and emotion with the other big ecommerce companies. Amazon, for instance is not a Family, it’s a business and sellers that sell there understand that is the case, so they behave accordingly. With eBay, the dynamics are much different. eBay is much more than just a business, so, as managers try and exert more control over the marketplace, to make it more like a business, sellers will complain and lash out.
eBay's key problem is how they interact with sellers and until they address this, they will always have turmoil. eBay can't be managed like Amazon is, eBay is unique and it is about time that eBay management figured this out. So what can they do?

  • Managers can be responsive to the concerns of sellers by acting quickly and decisively. When the new Feedback rules go into effect in May, managers need to act quickly to address any problems the new rules create. Sure, they have built in many seller protections into the new Feedback but nobody has a crystal ball here, if seller feedback takes a hit they need to recalculate their T&S limits and act decisively to protect sellers.
  • Managers can stop using "eBay Speak" to communicate with the community. Tell sellers what you are doing and why. Straight talk will get you much farther than "eBay Speak"
  • Stop treating sellers like children. Sure, they are vocal and can get emotional but that is because they want to sell on the platform. The emotion comes from feeling they are just numbers on a spreadsheet. The people complaining just want to conduct business on the Internet with the least amount of hassle and the most opportunity for profit. If you treat them as partners, eventually you can turn this ship around.
  • I don't believe the divide between Sellers and management can't be bridged, but if management doesn't step-up and start building the bridge the party will eventually be over.

Maybe one of the first things John Donahoe needs to do, is create a new position called CPO, or Chief Psychology Officer. If the new management team does not reach out quickly and decisively to its sellers no amount of Finding 2.0 and Best match changes will help.

Just my 5 cents!


Anonymous said...

The only "family" eBay resembles is the Manson Family...

Randy Smythe said...

LOL - Humor is good for the soul.

Stefan said...

Well stated Randy. I wonder if any of the eBay managers read your blog?

Randy Smythe said...


They do and I speak regularly with some of them. I just don't know how much of it trickles up to the VP level and above.

Vista said...

Interesting, that's kind of how I feel about the whole TSAM thing as well. I feel like they agree with us on lots of stuff and should be able to pass the information on, but it never seems to go anywhere. The only exception to this was yesterday's media announcement :)

Randy Smythe said...

Yeah, I don't envy the TSAM's they are good people not aloud to say much and the feedback they get just kind of goes into the ether.

I really believe that they are as in the dark as many sellers because management doesn't want to brief them and have something slip.

Most TSAM's are wonderful.

Anonymous said...

Hey Randy :)
Fantistic Blog!!

I think that for Ebay though, they have already lost the battle...
They should have listened in the beginning when the new ceo announced the changes...

His flippant comments about the "noise" that the buyers and sellers are making on Ebay, was the "wrong thing to say"...

We're talking, people's livlihoods here!! Not good to poke fun at a starving seller!!

Nope, Ebay has seen it's day and I believe that they've put themselves on the downhill forever...

I, for one, will not do business there and have moved my listings, lock stock and barrel to online auction...

Thankyou for sharing & Blessings,

Anonymous said...

Interesting take -- While I can surely agree that eBAY fueled its growth by marketing community I think you miss mark --

The insider battle was fought in the tower two years ago and the "make this a business" team won out -- The past 21 months have driven home the new philosophy quite pointedly.

People who have a belief that this Company will do an about face and return to its roots are being Romantics.

eBAY will go forward as a combination sales platform - advertising media - communication company - and probably most importantly a moner handling machine.

Billion dollar Corporations are unweildy by design and aloof by necessity -- It is not possible to satisfy several million diverse interests -- eBAY is not selling a standardized laundry product with known end results. They are selling a risk management system for retailers.

Rather than looking back -- eBAY sellers would be better served to discern the mature internet landscape and come to some hard decisions anout exactly what their effort involves -- Hobby -- On Line weekend garage sale -- part time business -- primary income -- eBAY seller -- or retailer.

Each of those options are worthy within a given context -- BUT -- It needs to be faced that eBAY can not fully satisfy each of such divergent needs and will therefore skim the cream off most while nmarketing hard to a few.


Randy Smythe said...

Carl, I do agree with you. The problem management doesn't grasp is that they are trying to place the controls of a "business" approach on something that wasn't built for that.

Amazon has always been built that way they never have celebrated community and I doubt they ever will but eBay built their company on that. I've said it before, many times, they need a eBay Classic with all the things that made eBay great and they need a new eBay with the rule firmly in place from the beginning. If they don't do this it won't work.

Thanks for your comments.

Randy Smythe said...

Debi, eBay management has sure done a good job of alienating a segment of their customers.

My guess is that eBay will become just another marketplace, no longer "King of the Hill" but they won't go away.

Thanks for your comments!

Anonymous said...

Randy, the perception by sellers, especially those who have been with Ebay from its inception will tell you they built it. Ebay's perception of itself is that of a corporation, complete with shareholders, a board of directors, and a CEO.

Bridging the divide between those two perceptions will not happen. The sellers not being heard by management marginalizes them. They feel powerless over their businesses, always trying to adjust to changes that create chaos.

debnroo said...

Hi Randy,

You are echoing what many of us have said for years. eBay has missed a grand opportunity to rebuild trust with sellers.

The new team could easily have come in with a new fee structure that would have guaranteed that ALL sellers saw a reduction in fees. That would have gotten the foot in the door.

And, before taking away seller's only tool for protecting themselves from "bad buyers" (negative feedback), they could have announced the immediate initiative to crack down on feedback extortion.

Then, after demonstrating that there was a new team with a new attitude, announce at eBay Live that they had an unpopular PROPOSAL - to remove the ability to leave negative feedback, and move to a system that relied more on DSRs.

I agree with you that there is a distinct difference with the new team. I witnessed this for myself in DC. I am convinced there is a way out of this mess.

But, I am also convinced that eBay has to hit rock bottom. They have taken one step out of denial, but acknowledgment of the problem is not enough. Changing the surface is not the problem.

eBay has basically challenged sellers to change themselves for the better of everyone involved. But, I think eBay needs to collectively do some serious soul-searching on their side as well. And, you are absolutely right - they have to stop talking to us in this bizarre language without actually thinking about the words coming out of their mouths (or from their computers).

I just got an email today telling me that feedback extortion could not be considered because the item had already been paid and shipped - and after that eBay can't consider feedback extortion. Yet, despite this email, no one at eBay wants to get on the phone and be asked whether they can honestly stand behind that statement. It is these types of absurd experiences - many with far deeper meaning and consequences than my example - that are driving sensible entrepreneurs away.

eBay has mistaken loyalty for individuals who have put too many eggs in their basket. It seems recently that there has been a mass awareness that there ARE other ways besides eBay to buy and sell on the Internet. We are just crossing the threshold where theory becomes practice.

It is all about end runs. eBay was once the biggest end run around brick and mortar retailing. Many of us built our businesses creating value through efficiency that could not be achieved with regular retail overhead.

We are simply at the next stage in the evolution, and eBay voluntarily gave up it's natural competitive advantage - the loyalty of it's sellers. While the cost of almost every other technology-based thing goes down over time, eBay costs only go up. They miscalculated the breaking point for sellers.

They also miscalculated what is the core competency for ecommerce entreprenuers - the ability to find an end run around anything - often in days, sometimes in hours.

eBay should have seen this pattern - every time they do something to try to manipulate behavior, the users of the site find a way to overcome their efforts. Whether we are talking about ways to "manage fees", or ways to rip people off, the only constant has been eBay's ineffectiveness to stop or prohibit users.

So, rather than harness this raw power that generated innovation after innovation, they tried to be the bully who owned all the toys in the sandbox. If you don't play the bully's game, the bully takes the toy and kicks sand in your face.

And, to bring this around full circle, there is only one thing I can recommend to eBay right now to stop the bleeding. In every decision they make, in every announcement they broadcast, in every interaction with T&S, the TSAMS and Customer Service, and particularly at every conference, eBay needs to communicate to sellers how valuable they are to eBay, and how they are willing to do whatever it takes to EARN their trust, and keep their business.

The manner in which they communicate needs to change completely.

And, to that end, I think the time has come for eBay to have sellers get a real say in the decision-making process. As crazy as it sounds, there needs to be seller-oversight of eBay.

I don't know what form this takes, but it is painfully obvious that the missing element at eBay, for eBay's unique business model, is some mechanism for sellers to have a real say in their own future.

That is what those who are striking are trying to accomplish. That is what those in PeSA, IMA, and other seller organizations are trying to accomplish. That is what a gazillion discussion board posters are trying to accomplish.

Until eBay sellers are treated as equals, as peers, by those they interact with at eBay, it is unlikely that the experience for sellers will ever significantly change.

Thanks for letting me take up some of your bandwidth to throw in my $1.02