I've never been an advocate of boycotts mostly because as John Donahoe says; "With sellers, there's nowhere else to get this volume." source eBay Strategies.
Too many sellers are hooked on the "crack" (volume and cash flow) they are addicted and going cold turkey is too painful. eBay management knows this and uses it to their advantage.
Additional reasons boycotts don't work:
- eBay is a competitive environment and too many sellers will list items to replace those removed by the sellers who are boycotting. Until every seller acknowledges they are addicts and they want to change, boycotts will continue to fail.
- eBay controls the flow of "crack" and can just "push" a listing promo, so sellers decide they just can't pass it up. When your personal income depends on eBay, you can't take the chance.
- PeSA, ECMTA and IMA have never backed a boycott. If the largest sellers or those sellers involved in these organizations do not back a boycott, it will fail. The only way for an action by sellers to succeed, is if all three of these organizations support it.
- There have never been any stated demands -- all sellers are doing is protesting. I'm not sure if boycotts are ever really successful, but if there are no stated and agreed upon demands then failure is assured.
The title of my post is: eBay needs a "Come to Jesus" moment and they do, before they ruin the best seller empowerment story ever.
I will say this in print right now; the moves eBay managers are making will backfire and end up marginalizing the platform. As Stephanie Telenius mentioned at the ChannelAdvisor Catalyst conference earlier this year "we won't recognize eBay, this same time next year" She was 100% correct, but should have added, "next year at this time nobody is going to care about eBay".
Investors should be very concerned that this management team is taking them down the wrong path. Many of the changes are very necessary, but the execution is wrong.
What will bring eBay managers to this "Come to Jesus" moment? Perhaps a boycott that addresses all of the issues I laid out above, but more than likely the "Come to Jesus" moment will happen around January of 2009 when the eBay board of directors decides to find a new management team to once again fix eBay. I fear it may be too late to avoid this outcome.
It has always been my opinion (my 12%) that eBay can once again grow faster than ecommerce and therefore become a growth investment again, but only if eBay management embraces sellers, rather than use them.
The "carrot and the stick" actions of management, will only motivate sellers in the short-term, but even if these moves change seller behavior, they will in the end deepen seller resentment.
eBay managers are very intelligent and the senior execs all have advanced degrees, but they don't live in the real world. They have no real world experience, nor do they care about real world experience -- they've always viewed the marketplace from their ivory tower. Metrics are the driving force behind all of their decisions, but common sense doesn't seem to be included in the calculations. They are book smart, but real world stupid.
This is how foolish their actions are:
- They want the Amazon buyer experience, at eBay's traditional profit margins. Hello McFly! Amazon controls price, seller behavior, product selection, merchandising, fulfillment and search because they have skin in the game. Sellers have to fall in line because they compete with Amazon.
eBay has no skin in this game -- they have traffic and "addicted" sellers. Amazon knows online retail like no other company in the world. eBay knows "jack"
- It is a "crack pipe" dream, to believe eBay can get close to the Amazon experience without compressing margins by giving real incentives to sellers and advertising to reinvigorate the brand. These fake FVF discounts for higher DSRs and "Free Shipping" are too funny to take seriously.
- Amazon is a technology company that sells product, while eBay is a bunch of brilliant marketers and consultants who think they are a technology company. Please name one technological innovation eBay ever came up with that worked or that wasn't copied from some other company. All of their success has come from acquisition. Why they didn't outsource Finding 2.0 to Google I will never know.
So, I am on record as saying, that unless eBay managers have a "Come to Jesus" moment in the very near future, they will have it forced on them in Q1 of 2009. There will be no need for a boycott because the power of eBay will be gone by then.
My suggestion for sellers right now: Begin to wean yourselves off of eBay beginning today, because the changes they are making will ultimately fail and you don't want to be dependent on the "New eBay" for your livelihood.
Just my 12%