Monday, May 05, 2008

Impact of eBay/Buy.com Deal Part 2!

I was talking with a friend in the business about this deal and he made some very good points:
  • The only group this affects is sellers in the same categories as Buy.com. eBay still gets 100% of the GMV and it isn't really growing it's just coming from a different seller.
  • Wall Street just shrugs because the deal isn't material, it isn't growing GMV at all.
  • It does spike listings a little but what's 200K listings in the scheme of things?
  • Even the free listing fees are really just vapor because the listings never would have existed without the deal, so it's not like they were giving away anything. That is why it is looking more like the deal was: Free Listings and standard Core FVF (8.75%)
  • Buy.com gets incremental sales and acquires new customers.
  • Existing sellers in those categories have to adjust or leave. If they leave it doesn't matter because the inventory is still on the site.

So really, the only ones who care about this deal are sellers who are already pissed about the changes being made and those sellers who are worried about the next Anchor store to invade their category. It was already difficult to grow your small business on eBay, most of the affected sellers can kiss growth goodbye for now.

The one downside I see to this for Buy.com and eBay, is that we all have access to Buy.com's sales through completed sales and Terapeak so we will be able to see how much they are doing. If the imported "retail experience" is a bust where does eBay go from here?

Just my 12%

4 comments:

Anonymous said...

A potential stumbling block: Buy.com's use of Google payments. Are they being offered as an option in ebay checkout as they are on the mother site?

Might be worth checking into

Anonymous said...

eBay started allowing google payments recently.

Anonymous said...

Do you have an announcement or policy change link re; ebay allowing google checkout?

Randy Smythe said...

eBay is not allowing Google Checkout.

I posted an April Fool's Day post about it but there has been no policy change.

All Buy.com orders coming from eBay are paid through PayPal.