Sunday, May 11, 2008

Buy.com First Week - Little Impact on eBay Media Sellers

Well, the first week of Buy.com's eBay listings onslaught is over and it looks like there was minimal impact on the Media category. My discussions with several media sellers shows little impact on their sales.

I'm looking more in-depth at the impact on the Computers & Networking category and will post about that as soon as I have a feel for what happened.

Buy.com's Free Shipping, for orders over $25 and minimal S&H on most media items (compared to other media sellers) generated higher ASP's but just avg sales. A quick look at some of their listings shows that their BIN price is significantly higher than other eBay sellers and even though Buy.com is supposed to offer a superb "Buying Experience" eBay buyers don't seem to care -- they still want the lowest price on commodity items -- a retailer's brand means very little on eBay, the majority of buyers go to eBay for a deal.

eBay buyers may complain about high S&H and bad sellers, but what they really want is prices that are "eBay Low". Now if I could get "eBay Low" prices and Free Shipping" that would be a winning combinations, but if you beleive that combination is possible for sellers you are kidding yourself. It is actually pretty sad that eBay management can't seem to figure out their own buyers.

This is a huge miss-calculation by eBay, IMO. They are trying to change a discount marketplace into a retail website because they are seeing slowing growth, yet they won't spend any money to go out and get those "Retail Customers" -- the customers who would want the "Retail Experience".

Active eBay buyers want the discount and the service but the discount reigns supreme in their minds. Sellers have been telling eBay managers this for years. What is the old saying; "Service, Quality and Price -- Pick two of them". If eBay managers were actually retail experts then they would already know this.

Their strategy appears to be "change the marketplace by association". In their minds, the current crop of sellers on eBay don't know what they are doing, so why not go out and get someone who does. "You can put lipstick on a pig, but it is still a pig." They are putting lipstick on the eBay marketplace hoping their buyers will care and they don't.

Where does eBay go from here? Perception is reality and nothing eBay is currently doing, or planning to do, will change the perception of the eBay brand.

Update: There appears to be some impact on the Books category from the Buy.com listings but DVD, Music and Games were not impacted.

Just my 12%

9 comments:

Anonymous said...

There's one big point ebay is missing by miles....they're kicking around small sellers and small sellers are leaving AND taking their buyers with them. Small sellers are actively marketing their buyers to follow them to other sites. This alone will put a kink in ebay a whole lot bigger than any boycotting that's been done to date. We all know retailers will not do well on ebay - that is not what ebay is known for and its not what ebay buyers look for. If they can go to buy.com why do they need to buy from them on ebay? - makes absolutely NO sense! Ebay beware! The trend now is to move buyers right along with sellers when they list elsewhere. Listings are already showing the wear and tear. They have a special going that has not moved listings much at all - why? - there just aren't as many sellers listing and most of the ones who are still listing on ebay list less than before. Ebay may be digging its own grave and its a well deserved one! They best dig a very big hole to cover all that greed!

Toby said...

I looked at 20 pages of Buy's completed video game category listings (50 listings per page, 1000 total).

They had 5 listings with a buyer for a .5% sell through, about 1/80th of the category norm? They've missed hitting the ebay market by a mile. Their listing count now is about half what the peak was last week.

Randy Smythe said...

Toby,

They had good sales in the Computers and Networking category and in Consumer Electronics and in Books but not in DVDs, CDs or Video Games

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

Tis the calm before the storm....my fear is that it won't be long before they change their pricing strategy.

Makes sense that they are just introducing their new listings/pricing in a subdued fashion now, during the slowest ebay sales weeks of the year. EBay doesn't want all of us terrified sellers to leave now, not all at once. But by this coming 4th quarter...have your exit strategies ready, fellow sellers.

Ebay wants to weed a heck of a lot of sellers OUT and this is the way. Buy.com gets to take the heat as the bad guy that ruined lots of people's ebay businesses, when in reality, it's ebay who are pulling the puppet strings on this private deal...

Anonymous said...

All sellers need to send Buy.com a message and pull any listings you have from their marketplace.

Why should sellers list on Buy's platform and compete with them on eBay at the same time?

I'm putting my time and money into PPC for my site. Buy.com is another mega-corp that doesn't care about the sellers. Sellers are prey for these marketplaces, and I don't like being preyed upon.

We may not have much choice about eBay, but nobody needs Buy.com sales... don't let them get their hooks into you like eBay did.

Drive traffic to your own site with PPC and you'll finally be independent, and way better off.

Randy Smythe said...

Anonymous,

Buy.com is not the bad guy here. They are just doing what businesses do.

I think it is short-sighted to only concentrate on your website and PPC if you want to grow your business.

Multi-channel selling is good business and online sellers should look at all of their options.

Buy.com should be considered as a selling vehicle if your product would work well there.

Anonymous said...

Doing business with Buy.com is going to get your business killed.

Buy.com is well connected in the distribution channels. If your products do well on Buy, they will integrate with your distributor and cut a better deal than you ever could. They will then start selling your products on their marketplace, eBay, and everyplace else.

By sending your inventory to Buy.com you are giving them your most valuable asset, your data and your distributors. Every time you upload to a marketplace they use your product title, images, description, SKUs, UPCs, Manufacturer and model numbers to run their PPC campaigns.

If you are a serious seller, you are also running PPC campaigns. So by sending every marketplace out there all your data, you are, in fact, arming them to compete with you on PPC (as well as any other marketplace, like Buy is doing).

The goal for sellers should be to have a strong website business, independent of any marketplaces. Sure, sell in marketplaces to get started, but once you have an independent site, taking part in marketplaces is more harm than good. Those efforts would be better placed on your PPC campaigns and website.

If the top 20% of sellers stopped sending new products to a marketplace like Buy.com, and instead focused on optimizing PPC for those new products, then you'll have lower PPC prices (no competition from Buy, eBay, Amazon) and create more repeat customers and enhance your brand.

All Buy.com does is use all the data 3P sellers send them and run a big PPC campaign. For sellers to make a living on this, they need a strong independent website and focus their efforts on that.

Trying to sell on an endless number of marketplaces only hurts you. Sell on the ones you MUST, then work on your website.

Buy.com is not bad in the same way that a lion is not bad. Both are dangerous to do business with though. It's not a moral issue.

Randy Smythe said...

Anonymous, this may work in some categories but specifically in regards to Buy.com there model is evolving into a marketplace where they monetiae their traffic any way they can. When you sell there you don't provide them with information on your distributors.

You can't add anything to their database at present so they already have the SKU's and info before you list.

I agree that a website needs to grow into the key revenue generator but using the marketplaces to generate revenue while you grow you website just makes sense.

Just my 12%

Look Amazon, Buy.com, Overstock all will use the data provided by