Monday, February 25, 2008

What Happened to eBay's ______?

When you've been an observer of eBay for many years, you often have moments where you take a step back and say; What happend to eBay's _____ ? With eBay the list can get pretty long.

What happened to eBay's ______ ?
  • eBay Express - They shut down the UK site and have put the other sites on cruise control. I call it "milking the asset". eBay doesn't commit any resources to Express, so it has to grow organically and eventually they will just shut it down.
  • Half.com - Half has been on cruise control since they decided not to shut it down in 2004. Once again, they are "milking the asset". Had Half.com not been successful with Textbook sales twice a year (August/Sept and January,) they would have shut it down years ago.
  • StumbleUpon - eBay acquired Stumbleupon a year ago and still nobody knows why.
  • ShopVictoriously - This was an ad campaign that was supposed to identify eBay as the fun place to shop and win. I always thought it was a bad campaign and it appears to have gone the way of the Windorphin.
  • eBay Neighborhoods - eBay's attempt at social networking has really not done much. The Coffee Drinkers Neighborhood has the most members with 4,179 members.

What about StubHub? Why has it not been expanded to additional regions? I would think the UK and Germany would be perfect fit for a roll-out.

Many of these sites and ideas start out real promising, but when eBay does their ROI evaluation they find that growing them will cost more money than they want to spend and require resources, so they get put on cruise control.

What is the old saying? "If you don't grow you die!" In many ways this is the same thing that has kept eBay's marketplace business from growing because they aren't investing enough in the business to make it grow. They continue to milk the asset and even though they have made some significant changes in the marketplace this year, they aren't radical enough to reinvigorate the business.

So, 10 years down the road will the question just be "What happend to eBay?

17 comments:

Talal said...
This comment has been removed by the author.
Anonymous said...

How would you fix ebay randy? Curious to hear your thoughts?

Tony P. said...

Do I simply have nothing but negative remarks towards ebay? No.

(get it?)

Randy, I posted something elswhere that applies here. I stated that if I opened a whorehouse at the Norfolk docks, it would be a viral (ha) success.

The ebay marketplace represents that same type of success, at least at first it did. Just throw it out there and eager peeps show up in droves.

I'd liken Paypal to a Rubber Dispenser outside my hypothetical whorehouse. It too would share in the scads of money clutched in chubby hands.

Ebay seems to expect everything they touch to turn into a dockside whorehouse. A half-hearted effort at kindling some interest may be 'invested', but that's it.

The billboard outside may show some lovelies, but inside it's dark, stinky and filled with cronies. There are exceptions of course; take Express (please), it isn't dark, but it is full of cobwebs.

I'll close with a Positive word for ebay.

Proton

Randy Smythe said...

First off, in the real world, I would never get a chance to fix eBay but in Utopia who knows.

Any suggestions I would make from this side of the fence may not carry any water because I'm not privy to the inner workings. I don't have access to the data from which to base decisions.

I suggest they do three things:

1. Create eBay Classic with auctions only and make it truly a venue again. It would have its own fee structure.

2.Create a fixed price marketplace for everything else and take control of that marketplace like Amazon takes control of theirs.

3. Spin off eBay stores into their own platform, give them a shopping cart and charge them a monthly fee. Store owners could then list on eBay Classic and the New eBay for the items that made sense and market through Goolgle adwords etc to their Stores.

They can use the current eBay.com to distribute the traffic.

It certainly isn't a simple fix and would take a ton of money and an Ad campaign to make it work but it would reinvigorate the marketplace business.

But who listens to me.

Randy Smythe said...

Thanks for the "Word Picture" Tony!

Anonymous said...

Randy, you are right on track with your 3 suggestions. Ebay needs to understand that it *needs* the diversification of different venues and models. The only necessary commonality is searching/finding. It demonstrates its total misunderstanding of this concept when it attempts to roll Half.com into ebay.com or graft in Express.

And #1 is right on the money: Ebay has to figure out that auctions are it's only unique service.

Sue Bailey said...

You need to hang out amongst the "how to blog" community, because Stumble Upon is getting the most amazingly positive press amongst traffic drivers. When a company's got as much cash as eBay, who cares about monetizing little old SU.

Randy Smythe said...

Sue, I like StumbleUpon, I just don't know why ebay bought it.

How about taking the money they spent on Stumbleupon and Neighborhoods and drive traffic to eBay.com and eBay.uk?

Cliff said...

Regarding Stumbleupon -- I've been expecting them to incorporate the feature into eBay, to stumble searches or key words etc., and have a new auction pop up with each stumble. This seems like a natural to me, other than the fact that auctions are active for such a short period I don't see why they haven't. But if it could be done it seems like a way to incorporate more "fun" for shoppers, possibly recapture some of that old eBay good will.

Randy, try as I might, I still can't see the benefit of splitting up eBay as you suggest. Again I think this would kill one or two of the formats and my first impression is that it would be just as hard, if not harder, to drive auction shoppers/bidders to my eBay store. Maybe I'm not getting something here, but I'm not interested in an eBay store where I trade in my current traffic for a shopping cart and a bill with Google on top of eBay. Personally, I like the three formats as they are and honestly I can't run a search for anything on Google without already being overwhelmed with eBay listings.

Still, I don't understand why they don't just incorporate a cart into eBay stores, that's why I thought they bought ProStores originally.

Randy Smythe said...

Cliff for auctions to thrive again you have to get the Fixed price items out of the same search. Auctions thrived on their own and are getting buried in the new fixed price eBay.

Stores would have a basic monthly fee and you could list all of your inventory in them. Then you could select which items you want to list on eBay Classic and which you wanted to list on the new eBay using the SIF format. Then you would also have a lot of inventory you just made available in your store and your customres could add those items. Basically what ProStores should have been but you can do it all from your eBay Store.

Cliff said...

Hi Randy,

Thanks for your reply. That doesn't seem too different from what we have now, besides a move from listing fees to a subscription fee. My fear is that true separation of formats would hurt auctions more. I honestly don't think auctions can ever thrive again the way that they have in the past, largely because of eBay itself.

What I mean is that many once rare items by becoming available nationwide and then worldwide have managed to set values for themselves which they previously did not have. In the majority of cases this price has come down and many items once believed rare are no longer thought to be so. An example that I think both of us would be familiar with would be an out-of-print (OOP) video tape or OOP DVD--certainly rarer than a new DVD that you can purchase from Amazon and be in possession of in a day or two, even the rarest of OOP items have been sold enough to establish a known value, enough so that I think eBayers expect to be able to find it available for immediate purchase, except perhaps in the cases of the most rare.

Of course, true rarities do still exist and those are the items which if the seller is aware of the demand can still create the old bidder frenzy (it just takes two, right?). So while I don't think auctions are dead or going to die, I think they're best reserved for true rarities where prices realized can still surprise. I don't think there's a cure for eBay where items generally known to be $10 items are going to fetch a considerable amount more if you put them at auction and start them at $9.99. I think they'll go for about $10, and more likely be sold by the person who has them available for immediate purchase.

I think on this one I'm just going to have to respectfully disagree with you. I don't see this as a fix perhaps because I am not convinced the formats themselves actually need a fix, or that the auction format could truly be fixed to resemble itself in the old list it and they will come way of the past.

Cliff said...

Randy,

On a more relevant note, since we mentioned it: "Whatever happened to ... ProStores?"

Does anyone use it, is it a viable platform for a store?

Anonymous said...

I like the three step plan a lot.

Our only way of utilizing eBay is for whatever collectibles and vintage items we need to move. Lumping all the BIN, Fixed-price, Best-offer, Express and assorted ancillary carp together with auctions has created a huge mess.

It has gotten to the point where when we attempt to list an auction item we feel slightly ill. We then list it anywhere else, even if it just sits there. Ebay has become a very aversive experience.

They have a captive auction audience, but they are blowing it. And, unfortunately, there is little to no chance of anything better popping up to replace it.

Here is a personal experience point we think is worth conveying: the experience has become so negative that we are foregoing the possible revenue to just avoid dealing with it. We are ready to quit.

Your logical plan? They don't listen.

Anonymous said...

While I'm at it...

I question whether the eBay auction system is even viable without the crutches of BIN, fixed-Price and Best-offer.

What you might have left could resemble the Yahoo and Amazon auction listings with page after page of few or near-zero bids. They both died a slow death.

As much as we need a simple and profitable auction platform I'm not sure it will work on the scale eBay needs as far as pulling in numbers.

If they tried a plan such as yours and it flopped, they would be doomed. But what they have now is a "pretend" auction site, just as Half.com is a pretend site, and Express is a pretend site [whatever it IS].

They are not innovators, but are just "cobbling" things together...

Randy Smythe said...

Anonymous,

There is a great risk with my plan but the current plan is not working. eBay will still have their fixed price marketplace (New eBay) for growth. They wouldn't kill auctions with this plan they would reinvigorate them.

They would still be the most dominant Auction site on the web and they have a built in market for sellers and buyer of auctions.

Sometimes if you love something you have to set it free. Setting auction free would save them, IMO

Talal said...

I think what ebay is finally starting to realize is that the auction platform doesn't fit with alot of new items, which is what they are trying to move to.

For media sellers, I believe that ebay (and amazon) are guilty of charging too high of fees.

If you are a rather small seller who buys from a wholesaler (legitly), there is no way you can compete with the people selling stolen and bootleg media. I believe this has been the downfall of ebay and it has created unrealistic consumer expectations.

The only way for ebay to crush amazon would be to slash their fees and re-invigorate traffic. More traffic = more buyers and wherever the buyers are the sellers go as well.

As a seller I'd be more OK with the crappy changes provided that I was making more money on each transaction than ebay. ha ha ha

Randy Smythe said...

eBay was successful in creating eBay Motors as a separate platform so why couldn't they do the same for Auctions, Stores and Fixed Price.

Perhaps its a category specific thing that goes classic. With Media there is no need for Core at all, just use Store listings. With collectibles there might be no need for FP so just use auctions.

They've already broken down the wall with category specific pricing for Media now lets fine tune each Vertical Market.