Monday, June 30, 2008
"First, I knew I didn’t want to offer free shipping, because I knew from two published university studies that combining shipping and handling into the cost of the product actually lowers revenue on average for auction sellers. So I decided to offer significantly reduced shipping and handling charges.
I went with $0.99 shipping. I figured this amount would be obvious to the buyer that I was offering shipping and handling below my own costs and they would recognize the value in that."
Please read his entire post
Now before you go slamming the idea because it would still give eBay more money in FVF, why not take 30 minutes today, to see if the Math works for your business? Perhaps $0.99 for S&H won't work for you, but the concept of charging lower S&H then is shown on the package itself might just work. How could a buyer be upset if they actually saw that you spent money on them.
Imagine if it cost you $1.95 to ship something and you only charged $1.50 for S&H, while putting the additional $0.45 in your purchase price. Your item price would still be competitive and your S&H price would certainly be better than others in your category.
In the scenario above eBay would receive an additional 4 cents in FVF (for core items) and if your DSR's went up to 4.7 you would be advantaged in search in addition to qualifying for FVF discounts.
I know I have been suggesting that sellers get off of eBay as fast as possible and I still believe you should, but I'm mostly talking about ending your dependence on eBay. If you can make eBay work for you, then you should stay, but just don't rely on eBay.
Doug's idea should get you all thinking about how this would work for your business.
Just my 12%
At least she isn't calling from India.
Just my 12%
eBay used to have 1.3 million evangelists (sellers) singing their praises, now they have half that many villagers with pitch forks hoping they fail miserably.
And its not just dislike or distrust anymore, for many it is outright hatred, yet they still sell on the site.
Here are some quotes I've heard recently, from sellers who are upset but don't leave the site:
- "Unfortunately I am in a shitty situation and its going to be hard to get away from eBay.. ugh"
- "I still have a year left of Law School"
- "Where do you go to replace $500k a month in cash flow, without laying off everybody and starting over again."
- "I have my family and 6 other families counting on me. I can't just leave."
These are just a few of the things that I've been hearing. Many of these sellers can't find a way to get off of eBay, or the fear of leaving is worse than the pain of staying. So what happens when they feel they can't leave but they dread staying; they begin to hate eBay for putting them in this position. Now instead of a once loyal customer they have a customer that actually hates them.
Companies re-organize all the time, so the fact that eBay is re-organizing doesn't surprise anyone, but normally a re-organization affects only a small percentage of employees via layoffs, it rarely includes systematically removing customers, in eBay's case 10s of thousands of customers -- real people who use eBay to make ends meet or real businesses that have grown to a size that requires the revenue that eBay generates for them even if it is not profitable any longer.
I've written about this before, with my post Sellers and eBay in a Bad Marriage - Where's Dr. Phil? It is simple for me to say "get out", but not easy for any of them to do.
So what happens when your customers hate you?
- The levers you once were able to pull to manipulate behaviour, no longer work.
- The changes you make, regardless of how much sense they make, are protested.
- When you lose a lawsuit, your customers cheer.
- Nobody beleives anything you say, no matter how sincere.
- Your customers are actually hoping the company share price will sink like a rock.
- Bloggers like me get a lot of attention and now you can't even control the message.
- Instead of spreading the "good news" of eBay these customers bad mouth the company every chance they get.
- There isn't an avalanche of sellers leaving, but there is a slow leak in the dam that may soon be too difficult to fix.
- Sellers who are profitable start making exit plans just in case.
- I could go on and on ...
My suggestion for every seller on eBay is to start making your plans to leave eBay, even sellers who are still successfully selling on the site. You have 6 months left in the year, make your plans now to be off eBay, at least get enough of your business elsewhere so eBay's problems can't hurt your business any longer. Don't delay in the hope it will get better, if you don't act quickly you won't have anybody to blame but yourself.Just my 12%
"Angry eBay sellers labelled the auction site "monolithic and dictatorial" at a conference convened today to help the competition regulator decide whether to allow eBay to force all sellers to use only PayPal for accepting electronic payments." from the Sydney Morning Herald
I added the news above as an update to this earlier post, in an effort to keep score on eBay's many legal and regulatory battles.
News today that the Australian Competition and Consumer Commission (ACCC) has told eBay to hold off their planned implementation of PayPal only on the eBay Australia site, has revealed a chink in eBay's armor. The once mighty eBay is having a tough time in the courts and with regulators of late.
While this announcement does not end this issue completely, it does prevent eBay from making this change as they had planned on June 17th. The ACCC will make their final ruling at a later date.
In the past eBay was the proverbial 800 lb. Gorilla in the courts and with government regulators, but over the past 6 months that has begun to change.
- First it was the settlement of the BuySafe vs. eBay trademark infringement suit which was filed in Nov. of 2006 and settled early last year.
- Then there was the decision in Feb of this year to settle the Patent Suit with MercExchange over the Buy it Now feature -In the good old days eBay never settled suits.
- Next there was the Suit and Counter suit of Craigslist.org that has yet to be resolved.
- Then the loss, in France, of the lawsuit over counterfeit product being sold on eBay, brought by French luxury brand Hermes.
- And now this move by the ACCC to delay and possibly disallow completely, eBay's proposed implementation of PayPal only on the eBay Australia site.
I wrote a post in late 2006 entitled How Do You Beat eBay? One Category at a Time which dealt with how competitors couldn't beat eBay head on, but over time, they could whittle away at their business one category at a time. It appears the same thing goes for lawsuits and regulatory fights.
The concept is also called "Death by a Thousand Cuts"and as eBay begins to look vulnerable from court and regulatory losses as well as increased competition, the sharks begin to circle.
eBay is fighting battles on multiple fronts right now; in the courts; in government offices; with buyers and sellers and with competition. And they are fighting these battles as they restructure their core Marketplace business. eBay is vulnerable right now and it doesn't look good for the future.
For too many years eBay used their considerable size and position as the top ecommerce marketplace to beat everyone into submission and improve their advantage.; often to the detriment of their own customers (sellers). Now, it appears, they are having to pay for that approach and even investors are starting to get concerned.
How does the saying go? "Karma's a Bitch"
I do believe they can turn around their fortunes but not with the direction they have taken, but who listens to me.
Just my 12%
Saturday, June 28, 2008
This quote came from [a comment on a Seeking Alpha post and was re-posted by] serious_coder on a thread called: Great blog post from Randy Smythe on eBay Execs (are you wondering how I came across it?)
"A few thoughts about "radical change":
In my schooling as a Systems Analyst, I took a course called "General Systems Theory".
The basic principles are simple:
- A system will always tend to stabilize itself.
- If changed, a system will always attempt to adjust.
- If changed too often and/or too drastically, a system will thrash trying to adjust.
- The more complex the system, the more severe the thrashing.
- If the system cannot stabilize it will thrash until it destroys itself.
Summation: Radical change of complex systems is likely to cause severe enough thrashing for the system to self-destruct.
eBay is certainly a complex system and I believe they are on a path to self-destruction."As I have said many times before, if eBay managers continue down the path they have started with all of these changes, a year from now there will be a completely new management team on-board or eBay will be have been acquired.
Changes were needed, even some that have been made, but the execution and the strategy have been faulty. Look at what has happened to Yahoo this year, to see the future of eBay if they keep going down this path.
Just my 12%
Scot Wingo posted some tips for improving DSRs at his blog and the most controversial tip was: Improve your DSRs Tip 14 - Consider NOT filing for UPI credits. Scot reasons; "So as a seller if your DSRs are really important to you, then why risk them by starting this dance at all? Sure it's eBay's fault the UPI process is so broken and all, but you do have the option to opt-out of it. Sure, this puts more FVF $$ in eBay's pocket, but maybe you can take more out by opting-out and do what's right for YOUR business."
I certainly would recommend doing the math to see if that tip would improve your business, but while you are doing the math why not consider using Immediate Pay instead of worrying about all this.
- Immediate Pay keeps "whacked out" competitors away from your listings because they have to pay for the stuff, they can just create a user id bid on stuff and then never pay.
- Immediate Pay helps reduce customer service and also gives you, I would argue, a higher class of customer.
- No more NPB's or worries that a pissed off buyer will ding your DSRs because you filed for UPI credit.
Immediate pay has some drawbacks:
- Cart abandonment (even though it's not really a cart) Using Immediate pay may reduce your sales but if your NPB rate is 10% and your cart abandonment rate is 10% its a wash and you don't have all of the customer service issues to deal with.
- Combining orders can be a problem.
Why doesn't eBay promote "Immediate Pay" as the method of choice on eBay, I would think it would improve both the buyer and seller experience? My guess is, if Immediate Pay were used site-wide it would reveal how bad the NPB problem really is.
eBay might might even take a 10% haircut on their GMV which would make last year's $60 billion a more accurate $54 billion and of course the difference between actual UPI credits filed and actual fees paid on UPIs might be a nice chunk of change. I guarantee you if the metrics were in eBay's favor they would make immediate pay mandatory site-wide.
My tip for eBay sellers who are fighting with this issue, is to switch to Immediate Pay on your items; remove both the hassle and the cost of non-paying bidders.
Just my 12%
Friday, June 27, 2008
I don't shop on eBay, so I just can't test these things out very extensively and I would really like to get feedback from those of you who are heavy eBay users.
Either use the comment section of the blog or eMail me at rksmythe at yahoo to let me know what you think.
I emailed GetItNext CEO Ron Stewart for an explanation on why GetItNext was presenting more items than eBay's own search and here was his response:
"The reason for the discrepancy in the number of results returned by eBay and GetItNext is that GetItNext integrates Core and Store listings in our search results. As a result, we will frequently return more results than eBay (depending on the category).
We have integrated core eBay and store listings in our search results since we launched GetItNext in June 2007. This is one message that we’ve been continuing to communicate to the seller community. We don’t exclude store listings from our search results. Including store listings in our search results is in alignment with our goal of having people spend more time shopping and less time searching for the items they want to buy on eBay. [bold is mine]
Our focus is to provide our guests the best and most relevant search results possible. We take eBay’s data and improve it to make our guests' experience the best that it can be. Our results are a little different than eBay’s, but in our opinion they’re better too."
So we have both ebay Classic and SIS (Store in Search with GetItNext.com - Spread the word.
Just my 12%
- Buy.com is the poster child for Diamond Power Sellers and we actually have them to thank for this new level of seller and opening the door. Now if the rest of those sellers that sell more than $500K per month can just get their DSR's up we might be able to add to this new elite group.
There are a few who are real close, but S&H DSRs are keeping them out of the club.
Update: Thanks to the folks over at Seller Dome, I can now reveal the second qualified Diamond Power Seller - poor_fish. It sure is nice to have high ASP items. I would have had to sell 50K items each month to qualify.
BTW, I wonder if anybody has told them they are Diamond Sellers. You can bet eBay didn't send them a welcome to the Diamond club email.
Today Rock Bottom Golf is ranked #308 in Internet Retailers top 500 Retail Websites with $21.7 million in 2007 sales -- that is quite an accomplishment.
Their website gets over 270,000 unique visitors per month and the amazing thing for me is ... its a Yahoo Storefront.
Now, if I remember correctly, they began their business on eBay in 2002 and added the website in 2004 - $0 to $21.7 million in 5 years is pretty impressive. They are still selling on eBay, but it makes up only a small percentage of their total business ... maybe 15%, roughly the same sales they did on eBay back in 2004.
As I look back at it, I knew in 2004 that I needed to ween myself off of eBay, but I didn't complete my website until January of 2005, after spending $80,000 in development. I created my own shopping cart that integrated with my back-end, when in hindsight, I could have just created my website on Yahoo for under $20K in a quarter of the time and still had $60K for advertising.
Rock Bottom Golf made the correct decision to grow their business off of eBay, my delay in following their same path cost me my business. Glacier Bay did $4.6 million in sales in 2004 -- 100% coming from eBay. The following year, 2005, GB did $4.1 million in sales with $300K coming from the website and another 100K coming from Amazon, but by the end of 2005 I was seriously in debt and eBay was break-even at best. I had few resources left to advertise the website and I was too late to the game to make Amazon a big part of my business, so I made the decision in Dec of 2005 to shut the business down.
Based on conversations I am having with many of you, the Glacier Bay story has become a common story for many eBay sellers. Please do not wait until there is little hope left to make the change in your business. This goes for small sellers as well as large sellers -- follow the Rock Bottom Golf plan rather than the Glacier Bay DVD plan.
Just my 12%
Wednesday, June 25, 2008
A disertation is making the rounds to all the blogs and ebay discussion boards. I won't post it here because I'm still doing due diligience on its validity. It was posted in my Blast from the Past comments section. Update: I removed my link to the post until I get confirmation.
Update: eBay has responded, saying "there is nothing to this post".
Okay, I've done enough research on this now to conclude that the manifesto circulating around the blogs is a hoax. After further reading, it is clear that there is no real inside information here and that some of the items on the list are actually contradictory.
Now back to your garden variety speculation. Move along, nothing to see here.
Just my 12%
On one hand a PayPal and Comscore study of cart abandonment shows that "43 percent of consumers didn't pay for items in their shopping carts because shipping charges were too high" while on the other hand Doug Feiring at Auction Insights sites two separate studies "that eBay bidders were more prone to bid on auctions that had a separate shipping & handling charge, than auctions that had both charges rolled into the price of the product under the pretenses of “free shipping.” This held true even if the total cost of the “free shipping” auction was less than the combined cost of the auction with the charges broken out."
I think both studies are correct. The PayPal/Comscore study was accurate in discussing the traditional online retail environment, while the studies Doug sites are specifically looking at eBay.
So here is the problem: eBay management wants to bring the retail experience to a platform not designed for it. eBay customers are not typical online retail customers and they never will be.
There is a reason we have both an eBay and an Amazon, because they are made up of unique users (though there is some crossover); trying to import a traditional online retail experience to eBay makes little to no sense.
Free shipping is becoming the standard in the online retail world because of companies like Amazon and Zappos, but as Doug mentions "Free Shipping" is not the preferred option on eBay.
I don't want to beat a dead horse here, but trying to turn eBay into an online retailer will just marginalize the entire business. If eBay managers want to grow their retail business they will either need to create a new marketplace (not likely because of the expense) or buy an existing marketplace and turn it into their "New eBay" Trying to make "Free Shipping" and other traditional online retail features work on eBay is like "putting a square peg in a round hole", or my favorite saying, "making a silk purse out of a sows ear" It just won't work.
Read Doug's entire post on Free Shipping on eBay here.
Just my 12%
More from the press release:
This acquisition will enable Fabric.com to further expand its selection of fabrics and accessories while enabling Amazon.com to offer its customers a wider variety of products in the sewing, craft and hobby segment.
“Fabric.com has built an impressive business by providing great products and excellent service for sewing and crafting enthusiasts,” said Chris Nielsen, vice president of the Amazon.com Home & Garden store. “Over the years, we’ve seen a growing interest in this segment from our customers. Our acquisition of Fabric.com will allow us to offer a greater variety of fabrics and accessories to crafting customers.”
The site will be run as a standalone site, but will benefit from the expertise and scale that Amazon can bring to the business on the back end. Eventually, I would imagine, they might begin offering this type of product on Amazon.com.
It isn't too clear the benefit to 3P sellers in this category, but I can envision Amazon might open up Fabric.com to 3P sellers at some point in the future, though at this time there appear to be no plans.
According to Quancast.com and Alexa
Fabric.com's user base is primarily Women (73%) over 50 years old (40%) and traffic to the site is ranked #57,180 on Alexa -- truly a niche online retailer.
Perhaps Amazon has decided to expand more quickly into new categories through Acquisition rather than building them out on the main site, if this is the case I would look for more deals like this coming down the pike.
Tuesday, June 24, 2008
EBay's 'Best Match' A Bad One For Small Retailers - Smaller eBay retailers might just have been dealt a swift one-two punch from the auctions giant.
Just my 12%
Join us for a Webinar on June 25
Space is limited.
Reserve your Webinar seat now at:
Do what you are good at doing. Leave the rest to the experts.
This seminar will go over order fulfillment, discuss how to cut your domestic & int'l shipping costs and how to reach international buyers in Canada, the UK and Europe.
Guest Speaker: Nate Gilmore, VP Marketing & Busines Development for Shipwire.
Bio: Nate oversees Shipwire's channel development and developer network, as well as our marketing and public relations. Previously, Nate was at Concentric, acquired by XO Communications, where he ran product management, sales and marketing. Over his six year career with Concentric, he developed dozens of new business channels, by initiating new products for small- and mid- size businesses, developing partner programs for those products, and working with web developers and systems integrators to provide ongoing support of those products. Nate has also held various legal positions in intellectual property and business law. He holds a B.A. in History, and a J.D., from Santa Clara University.
Title: eCommerce Merchants Webinar - Global 3rd Party Storage & Shipping Solutions
Date: Wednesday, June 25, 2008
Time: 4:00 PM - 5:00 PM EDT
Required: Windows® 2000, XP Home, XP Pro, 2003 Server, Vista
Required: Mac OS® X 10.3.9 (Panther®) or newer
As part of our strategy for maintaining buyer confidence, we allow only pre-approved sellers to offer these top-selling products in Video Games:
Rock Band (Xbox)
Rock Band (PS3)Rock Band (Wii)PlayStation 3 80GB Metal Gear Solid 4pk
Guitar Hero Bundle (PS3)
Guitar Hero Bundle (PS2)
Guitar Hero Bundle (Xbox 360)
Guitar Hero Bundle (Wii)
Xbox 360 Halo 3 Limited Edition Console
Xbox 360 Elite
Nintendo Wii Fit
We are committed to making sure that all sellers provide a high-quality buyer experience in Video Games, and that order fulfillment meets or exceeds buyer expectation. We periodically re-evaluate individual seller performance, and adjust the list of pre-approved sellers.
All sellers in Video Games can still offer ASINs that do not require pre-approval.
See Amazon is just as or more restrictive than eBay is, but they have always been that way.
I compared the top 7 "new" book sellers month-over-month (April to May) and here's what I came up with.
- Total GMV for the top 7 sellers grew 104% from April to May (All of that growth coming from Buy.com)
- Buy.com's GMV grew 1321% from April to May. (They were 100% Store listings in April and 100% Core listings in May).
- The other 6 Sellers combined, lost 30% in GMV from April to May
- The other 6 Sellers combined, increased listings by 20% from April to May (Store listings)
It looks like the Buy.com deal has hit the book sellers pretty hard, as they had to increase listings by 20% to lose 30% in GMV M/M (Those metrics are not the recipe for success)
So it is clear that Buy.com is growing GMV in the category, as well as taking share from other sellers. Of course this category was impacted the most by the Store fee increase of 2006, when a large amount of inventory left the site, so perhaps the Buy.com deal has just brought the category back to where it was back then.
I'll look at the Computers and Networking category tomorrow.
Just my 12%
Monday, June 23, 2008
Here are the list of current promos or coupons from Scot's blog post:
- 10% off up to $100 to registered users.
- $10 off S&H on more than 3 items.
- PayPal discount of 1.5% if you pay with your PayPal balance rather than a CC.:
- eBay Bucks where you can get up to 4%
- MSN Live Cash Back 20% rebate through PayPal if you buy through their link. (I wonder who's paying for that 20% discount?)
I thought that would be the last coupon I saw until a reader sent me one they had just received from PayPal.
Get 10% off on eBay*
Try eBay and save on your first purchase:
1. Go to eBay.com, and create an account using the same email address you use for your PayPal account. (bold is mine)
2. Find something amazing (of course!) and check that the seller accepts PayPal under the "Payment details" section of the item.
3. Pay using PayPal by June 30, 2008.
4. Enter code ---------- when you check out, and save 10% on your purchase (up to $100).
To learn more, visit the Coupons Frequently Asked Questions page.
Now call me cynical and point out my Tin Hat, but the timing of all of this sure does seem suspicious. Now I don't have any hard evidence, so don't go making investment decisions based on this post, but I would be sure to ask your broker what he thinks.
Just in case anybody is wondering. I do not own shares in any of the companies I write about.
Just my 12%
Just my 12%
And this comes after so many long-time eBay employees have already left. This management team is all new and Lorrie Norrington pleaded for sellers to give them a chance, but I honestly don't see that happening. The upset sellers actually gained some momentum from the conference.
Sunday, June 22, 2008
I'm not going to go into a long dissertation on why this needs to happen, it just does. We all know it, but eBay managers aren't willing to admit it. The gist of the idea is this:
- eBay Stores have been the red-headed step child of eBay because they aren't as profitable as other segments of the business, yet there are over 500,000 stores/shops worldwide. eBay should set them free --empower eBay store owners and get out of the way.
- Auctions: I contend that Auctions are dying because of Fixed price being in the same marketplace, many of you disagree. Auctions need scarcity and uniqueness of product to thrive and the concept of auctions is 100's of years old -- It just isn't a high growth business any longer. eBay should set them free -- empower auction sellers and get out of the way.
- Fixed-Price: A fixed price retail environment is the growth engine for ecommerce and eBay needs to maximize this business, but they can't do it on the same platform as Auctions and they can't do it without spending money. eBay Express was a good idea that was poorly executed from a business and marketing standpoint. It always need to be a separate platform with separate inventory and a huge, well thought out advertising campaign without one mention of the name eBay.
eBay has precious few months, if not weeks to turn this ship around or it will be a painful experience for all involved (employees, investors, sellers and buyers).eBay Should .... empower sellers and get out of the way!
Just my 12%
Saturday, June 21, 2008
Number 500 on the list was KneeDraggers, Inc. with 2007 sales of $6.4 million. I know several eBay sellers who do more than that each year and Glacier Bay did $4.6 million in 2004.
Several members on the list got their start on eBay, but have expanded to their own web presence. Two examples are:
- ShoeMetro is #471 on the list with $8.5 million in revenue in 2007
- Rock Bottom Golf is #308 with $21 million in revenue for 2007
Several eBay sellers should be on the list:
- eForcity, Movie Marz, Car Parts Wholesale among others.
And of course our newest eBay seller Buy.com with over $500 million in 2007 is number 33 on the list. Looks like the path to the top 500 retailers is through your own website.
How about this:
- eBay.com becomes the worlds best product search engine and each International marketplace does the same.
- eBay creates eBay Classic for that product that built eBay.
- eBay spins off eBay stores as an independent platform for businesses to build their brand and an independent business.
- eBay buys Buy.com and turns it into the fixed-price marketplace or the "New eBay".
- Sellers from each of these separate sites advertise their product on the eBay.com website.
Consumers get access to all of the inventory they could ever want; eBay becomes Google for product search; investors once again love the stock and Sellers are happy because they have independence and control of their business as well as a vibrant marketing tool again. The world is once again a better place!
eBay should learn some lessons form the following historical events:
- Coke creating the New Coke while discontinuing the original formula.
- VHS and Beta; Sony wanted total control and wouldn't license the better technology. VHS was licenced to everybody and became the standard.
eBay needs to embrace what made eBay great, create a new platform or buy one to create the "New eBay" and then empower sellers and get out of the way.
Just my 12%
I thought it was quite interesting so I figured I would point you to it. At some point most of these threads end up going into la-la land but just stop reading when that happens.
Update. sorry but the thread I mentioned above has been deleted by the moderators of eBay's Discussion boards. I'm sure they didn't like the idea of sellers discussing Amazon FBA on an eBay discussion board even though. Amazon FBA would improve their DSR's
"As far as execs, I have a feeling they either don't get it, or get it and
won't admit it. And what I mean by don't get it is that they don't recognize
sellers' are upset to the point of leaving. The official spin on unrest is
"change is hard," which is a big part of it, but the (sometimes nasty)
desperation I'm seeing is from sellers who feel they don't have control of their
businesses, don't know what eBay might throw at them next, and some of whom are pulling out their hair stuck between poor customer service from eBay and abusive buyers, others who fear encountering bad buyers and how it will affect their businesses."
"They don't get it!" is the phrase I hear over and over again from sellers. IMO, eBay Execs really don't "get it". eBay management looks at the metrics and sees that 10% of sellers are affected by a change or are experiencing a problem as a result of a change and 10% is a low number so that becomes an acceptable change for them, but 10% of a site the reportedly has 1.3 million sellers is 130 thousand "real people" (and only 5-6k were at eBay live) whose lives have been turned upside down and many of those sellers have employees that are also affected.
Here's where the disconnect happens; each change affects a completely different set of sellers, so ultimately all of these changes in the aggregate are affecting 30 to 40% of sellers; well now we have a problem, now the changes are affecting 390K to 520K sellers and their employees.
eBay managers are driven by the metrics and are buried in the aggregate data, but the real formula for success should be this: Metrics plus Logic, plus Willingness to Invest, times Common Sense, divided by Perception, equals the result. (now don't grade me on the actual calculation, I'm just trying to make a point)
I'm of the belief that the business can be turned around, but it has to happen today. If they wait until Q1 of 2009, too much damage will have been done to save eBay from being just another marketplace.
eBay was the single best "personal empowerment" story ever written, but it was edited to death.
Just my 12%
Friday, June 20, 2008
Griff: We had to make these changes because, without buyers, there will be no eBay in two years.
"Bullshit!" someone says.
"No bullshit," he responds; "absolutely true. The rate of decline in the growth of buyers…it was ripe for buyers going other places, and if the momentum starts, eBay is over."
Someone from eBay, finally admitted how bad this problem is.
- The Keynote was "much ado about nothing" PayPal A2Z (Amazon's Version is called A2Z) does show promise, but I haven't had time to look at the details. I can say this it is better than before, so that is a positive.
- Show floor, was pretty quiet. Spoke with several vendors who felt it was pretty slow and others who said its been good. Last year at Boston the show floor was huge and there were several very large booths. This year USPS had the biggest booth, as far as I can remember.
- Further research shows that several current sellers are close to being Diamond sellers and I'm sure they will invest in improving their DSR's in an effort to get negotiated pricing. I know many small sellers are upset about this but unfortunately the big get bigger. There will be fewer rags-to-riches eBay stories going forward.
- It is inevitable that more sellers like Buy.com are on the way.
- BTW, the speculation that Buy.com's DSRs are being manipulated is incorrect. The company has a sizable customer service staff to handle their eBay business.
- The conference was good for me, it allowed me to reconnect with old friends and make new contacts, sorry it was short of news. Basically the only real anger I heard or observed myself was around the feedback changes. Greg Holden, from Auctionbytes participated in the Feedback meeting with Brian Burke and wrote that it was quite lively.
That is it for right now, but if I get any more info I will be sure and let you know.
Sellers get sepper protection as well for "eligible items" No details yeat on what eligible items are.
No real announcement but more changes in pricing coming based on category. Its funny how eBay looks at all the data in the aggregate and talks about what is good for the whole community but they wants us to look at individual videos profiles of sellers and get the feeling that this is a snapshot of the whole community. Individual sellers only matter when they are part of promotion but when changes are consider they live by the data.
She's talking about the DSR and the number of Power Sellers that have 4.8 DSR's or better was 35%. That info really means nothing if those are all Bronze Power Sellers.
16% of all Power Sellers qualify for the new 20% FVF again, if they are all "bronze" power sellers how is that sunch a great number.
They are making the case for the aggregate or the right changes for the whole community. Root out the minority of people who are doing the wrong thing on eBay
She's once again says that sellers are customers. Now more announcements that we've already heard.
Seller protection, all addresses are confirmed address and International shipping. All "eligible" transactions are covered for sellers.
JD says; when buyers come back then sellers will be happy. (my paraphrase)
Working for the collective Good - He's now explaining why they are making the changes the way they are. They are trying to make the marketplace good for everybody.
BTW, if you have Twitter, go over there now and follow the eBayInk twitter account
They believe these changes will improve the marketplace for demand (buyers) and the result will be sales for sellers.
BTW, there was just applause for JD when he was announced, no booing at all that I could hear.
I'm going to make each of these posts Twitter like so there will be many short posts throughout the Keynote.
We had executives from PayPal, Seller Experience, Feedback and Finding and RBH was there.
Now, I'm sitting in row three in the press area, probably one of the best seats in the house. They have tons of chairs but no-way they will fill this place.
I'll be back posting when something actually happens.
"At the same time, we see potential changes to the competitive landscape. Most noteworthy, our research leads us to believe that Amazon.com may soon launch a PayPal-esque Payments service for use by consumers and merchants across the Web, potentially siphoning growth and/or profit from eBay's crown jewel."
Barrons was first to pick it up and then the tech bloggers started to weigh-in, but since there is so little information on what the offering will be, the buzz is just kind of simmering.
I think because Google wasn't able to get much traction against PayPal and PayPal continues grow their off eBay biz, many observers are skeptical. Nobody wants to call this the "PayPal Killer".
It will be very interesting to follow.
The code is "LIVE" I can't believe I forgot to mention it before. Thanks to those of you who emailed to let me know.
Thursday, June 19, 2008
"When asked what she meant when she said earlier this year that eBay would not be the same site in a year, and it was moving toward a retail experience, Tilenius said she meant making it easier to shop on eBay. She used two examples, saying in the media category, they will use a catalog system. And in the clothing category, when a shopper searches for a particular purple blazer, "We'll show the blazer, not the listings." She said eBay wants to show a higher relevancy and precision in what they are showing shoppers."
So it looks like my information is correct. eBay is going to a catalog system for displaying media listings, probably in some ways similar to Half.com or Amazon.com where a there is one page per SKU and then all of the individual product listings are displayed under the product information.
Stephanie's comment is the closest we will come to an answer to my question.
One more thing: Check out this video clip at Yahoo's Tech Ticker, entitled eBay Live: No Walk in the Park for CEO Donahoe
Ina Steiner and the Tamebay Twosome of Sue and Chris, have some great posts that I won't try and duplicate, but I will list them here for you:
- Sue has a great post on how the conference is going over with sellers. There certainly isn't any ra-ra going on here and I only saw one funny hat. As she says; many sellers are just trying to figure out how to make their business work with the new eBay and many are frustrated. I've talked to quite a few large sellers and the general consensus is "we've moved on" For some eBay has become a liquidation channel for others it is now the smallest part of their business.
- They made some announcements about PayPal buyer protection, the Diamond power seller level and new 20% FVF discount with DSRs of 4.9
Okay, so that's the news. Its interesting to note that you folks that comment on all of our blogs are actually more upset than the sellers who are attending eBay Live, which certainly explains why attendance looks to be south of 8,000 attendees. If eBay does not publish the actual attendance, its because they didn't get close to 10,000 attendees they hoped for.
If there was any doubt that this was the last eBay Live it should be all but gone. It won't be back in 2010 unless something drastic happens between now and then.
I will be very interested to listen to the Keynote tomorrow -- I actually don't expect much of a ruckus. At this point many of the sellers I've talked to basically want to tell eBay "to talk to the hand" nothing surprises them any more and nothing really moves them. So many of them will just shrug off the Keynote.
I don't expect any big announcements tomorrow but there will be many in the coming months. They made it clear to me that they would be using price (fee structure) as a lever to improve the "buyer experience" so if your business follows the company line and meets its goals then you will be rewarded.
Lets see what tomorrow brings. Sorry today didn't provide much excitement.
- eBay announced the new "Diamond" Power Seller level. I'll just call it the Buy.com level :)
- eBay announced that they are increasing the FVF discount to 20% for sellers who attain 4.9 DSRs 16% of Power Sellers qualify right now for that new discount.
- No official confirmation on changes to the Media category but management did say they are looking at the economics of each category and seller economics are on the table.
I still have a ton more to post but you are all just going to have to wait. One think I can tell you; even if you are not eBay Live you can get the eBay Live discount for PeSA membership. I found out that the code they are using here at Live works on the website. The deal is $1 for a 90-day membership and then I believe it is $14.95 per month after that.
Everyone seems to be in a good mood. I'll be back later with more news during the briefing.
I haven't heard an official head count for the conference, but I spoke with a couple of vendors who thought it would come in around 8,000, which is still an impressive number but much less than previous years.
So with an hour to kill, I'm going to go on a hunt for coffee.
- Meeting with GetitNext.com at 10:00 AM
- Blogger Briefing with eBay Managers at 11:00 AM - I hear we will even be allowed to ask questions. Ina Steiner, Sue and Chris from Tamebay, Scot Wingo, Scott Pooler and others will be there, so look for some good info.
- 12:00 Lunch with Merril Lynch
- 1:00 - Meeting will Fillz.com at their booth.
- 2:00 - Meeting with RedRoller.com about their Shipping Solution.
- I'm open after 3:00 PM so I'll be walking the floor of the exhibit hall. Be sure to stop me and say hello.
- Tonight I've got several options.
Stuff I'm hearing so far:
- There will be a new Power Seller level called Diamond for sellers with monthly sales over $500K - Supposedly lots of benefits for these folks -- all 50 of them. I'll make sure to ask about it at the briefing.
- No new 3rd party checkout applications will be approved, but if you currently have an approved application you can still use it.
I'll pop back in with updates as the day progresses. Please make sure to follow me on Twitter.
Wednesday, June 18, 2008
What do you think? If this turns out to be true, right when eBay is pressing their advantage with PayPal all over the world. They certainly couldn't make a case that Amazon Payments wasn't safe.
It will be interesting to follow this story and see if it has any legs. Let me know what you think.
I'm just getting my bearings so haven't been able to get much info on what eBay plans to do, but I will attending a briefing for bloggers tomorrow morning so I'll let you know what I find out.
Ina Steiner has been here for a couple of days, so she has some up-to-date info for you and Julia Wilkinson posted this interesting bit of info over at Auctionbytes: eBay Product Roadmap Leads to More Seller Requirements.
I will be using Twitter the rest of the evening, so make sure to follow my wild night in Chicago on Twitter -- I'm still trying to find out if eBay is ending Third-Party checkout.
Tuesday, June 17, 2008
I looking forward to the trip as I will be able to sit down with a number of vendors, sellers and eBay employees to get their take on the new eBay. I will be live blogging the Keynote Speech, much like I did last year and hopefully will be able to post some interesting information.
My schedule is getting pretty packed, but I would love to meet as many of you as possible, so if you see me walking around the exhibit hall, please flag me down.
This will be my 2nd eBay Live as a member of the press and I'll do my best to give you my 12% on what's happening.
If you are not currently on Twitter, you can follow my posts on the right side-bar of the blog.
So if you get a chance, why not ping me at rksmythe at yahoo and introduce yourselves. I won't bite.
You guys aren't planning any parties in Chicago, this week, are you?
I had been noticing that a number of my customers are buying single, low ASP items and having Amazon ship them for free. I've posted about this before when I was talking about beating the penny sellers. I mean they are buying a $2.98 DVD and getting free 2-day shipping through Amazon Prime -- imagine an eBay seller, selling a $3 item with free 2-day shipping.
Well, my Amazon Prime Trial period is ending shortly so I thought I would give you my impressions - the trial period was free for 30-days.
- I bought a Toshiba Laptop for my son's graduation, though I've been using it most of the time and got 2-day shipping for free. Saved me $45 over buying it from another site. I did my research and when I added the free 2-day shipping to the numbers Amazon came out the best deal.
- I've made more online purchases since signing-up for Prime than I made over the last 6-months and strangely enough they all came from Amazon.
- I wanted to watch a new release on my trip to eBay live, so Saturday I ordered "Jumper" and paid $3.99 for next-day S&H and had the DVD on Monday, in plenty of time for the trip. I paid a total of $19.95 including S&H, nobody else could beat that total price and get it to me by Monday.
- You can have up to 4 household members on the same Amazon Prime account so I will get my son set-up, as well.
- This Christmas all of my family members can be assured they will receive their gifts from Amazon, gift wrapped and delivered just before the holiday like Santa would do it.
- I've almost already paid for my Annual Prime Membership and they haven't even charged me the $79 yet.
Now, I don't get paid for any of this, I'm just sharing my experience. Now, if I can just figure out a way to get an Amazon Kindle for my effort. :)
"What sort of no-goodness are Amazon.com and eBay up to? Look no further than the news from overseas.
The two companies seem to have a nifty little trick: If they can't get away with a slightly questionable strategy here in the U.S., they test it out somewhere else."
It appears Amazon UK is not opposed to enforcing their will on publishers in the UK, just as eBay is not opposed to forcing their will on eBay Australia.
While I'm not sure that the Amazon case is really a test; it seems more like a dispute. It is certain the the eBay/PayPal issue in Australia is a test.
The thinking certainly is to use international sites to test new strategies and for the most part I agree with this approach but forcing corporate will on a certain constituency leaves a bad taste in my mouth.
Now for my 12%:
I'm a pretty conservative guy and believe in markets, personal responsibility and all that, but their needs to be a little bit of common sense thrown into to every corporate decision. I know eBay calculates the ROI of every decision, but my guess is that they don't generally add a little old fashioned questioning, "like should we do this". Amazon is no different in that respect.
I wish large corporations would take... I don't know ... maybe just a few seconds to think through their decisions. Just because you can do it, doesn't always mean you should do it.
Amazon has been able to remain above the fray on most things, because they are growing and they take care of their customers, but it is clear that when they have a point they want to make, they it the same way every big corporation does, they force it. According to the NY Times: "Amazon is saying little about its tactics. But bloggers have been organizing letter-writing campaigns and petition drives accusing Amazon, which bills itself as “Earth’s most customer-centric company,” of transforming itself into the bully of the publishing industry."
A few months ago Amazon ticked of self-publishers by insisting they use Booksurge for their publications. So, while eBay has their problems with sellers, Amazon has their issues with publishers and authors.
I am not naive enough to believe that this method of asserting corporate will will ever change, but I can suggest something to 3P merchants out there -- Get your own website.
Certainly, you can use each of these marketplaces to your benefit, but until you have your own place on the web you will always be dependent on them. I am choosing to be dependent on Amazon, much like I chose to be dependent on eBay "back in the day," but I am clear with my reasons this time. Now, I am a blogger who sells media items to support his blogging habit. Then I was an eBay sellers who was "fat and happy".
A healthy skepticism about each marketplace you work with will go a long way to help you maintain your independence.
See, I'm an equal opportunity critic. Now back to your regularly scheduled eBay bashing and my Amazon pumping.
Monday, June 16, 2008
I just received the following feedback from a customer:
My double-CD arrived with a broken jewel case spool. A prompt reply with a credited discount to cover replacement costs keeps this vendor in the "Excellent" bracket. Good customer support is vital and they came through.
Now, I don't inventory any items that have a broken case, so this must have happened in transit and had the customer actually contacted me, I would have taken care of this for them, but because I ship using FBA, Amazon handles all of my customer service. I didn't even know there was a problem until I read the customers feedback. In fact I don't get any emails from customers.
So, in this customers eyes, I came through in a big way, even though it was Amazon's customer service that handled the whole thing for me.
With Amazon FBA, I get world class fulfilment and customer service for a very affordable price.
I've been waiting for a response from eBay but up to this point have heard nothing. If the policy states that 4.8 DSRs get you advantaged in "Best Match" then it should not matter the number of 1s or 2s. The vast majority of customers were happy. What concerns me is that eBay keeps moving the goal posts for sellers. If this is the new policy then their needs to be more transparency about who is giving 1s and 2s and we all know that ain't happening.
This Cartoon says it all. In case you couldn't tell who's who: eBay is Lucy and Sellers are Charlie.
Tin Hat Warning: With the recent announcement that pre-filled information is coming to the following categories:
Multimedia Projectors, Amplifiers , CD Players , Remote Controls , TV Receivers and DVRs , Answering Machines, Car CD Changers, VCRs, Voice Recorders.
Computers and Networking
Scanners, Modems, Computer Speakers, Webcam,
Cameras and Photo
Digital Camera Flash, Binoculars, Slide Projectors
Business & Industrial
Copiers, Fax Machines
Home and Garden
Refrigerators and Freezers, Dryers, Washing Machines, Air Purifiers, Air Conditioners,
Heaters, Food Processors, Toasters and Toaster Ovens
I can see, in the not-to-distant future, where eBay goes to a single product page and then puts the sellers listings below it. It will look strangely like Amazon.
My guess is they will hold off these changes in the Media category until after Textbook season in August and September. They certainly don't want to piss-off their Textbook sellers. They've already been down that road once.
As of this post I haven't heard anything from eBay, but they are pretty busy right now. I will ask them when I get to Chicago.
Update: eBay has revised the language in their recently announced PayPal policy change.
- Auctionbytes is reporting that eBay will require US Sellers to accept PayPal if they ship Internationally.
- Could eBay be a takeover target? Between the Lines speculates that Microsoft is still looking for a place to spend some money.
More Quick Hits as I come across them.
Freedom is what drives these small business owners and they don't do well when they are restricted. If they did they would choose to be employees rather than independent business people.
With over 19 million small businesses in the US (most of them sole proprietors) The company that empowers those entrepreneurs will be the ultimate winner, not the company that restricts them.
As you head to eBay Live, I figured I would play a clip from Braveheart to get you pumped up. Just please don't start a war or flash your kilts.
Just setup your own Twitter account and then press the follow tag on each of these accounts:
- Scot Wingo's Twitter account. Scot really needs no introduction but he's the CEO of ChannelAdvisor and he blogs at eBay Strategies
- Sue Bailey from the Tamebay in the UK. She's also known as Biddy
- Scott Pooler from Trading Assistant Journal
- Richard Brewer Hay has a Twitter account for the eBayInkBlog. The info will be the company line but RBH will have all of the announcements before we do.
- Chris Dawson from Tamebay in the UK.
- Ina Steiner of Auctionbytes just started to Twitter so she is a must follow.
And don't forget my Twitter account. If I come across any more I will be sure to add them to this list.
Here are some of eBay's past Tag-lines:
- "The Power of All of Us!"
- "Whatever IT is, you can get it on eBay!"
- "Shop Victoriously"
- 'The world's online marketplace'
- "The People's Market."
- "Do It eBay"
- "Leap to New Heights".
- "The Power of Three"
Are there any that I am missing? Please weigh-in with your suggestions.
Sunday, June 15, 2008
This years event promises to be quite interesting, so I figured I would put together a list of things I can see happening or being announced - not in any particular order.
- John Donahoe and Lorrie Norrington will get booed at the Keynote Speech. I know that sounds harsh, but they know this is coming, so I'm sure they are prepared for it. Change is difficult and doubly so, when the execution of that change is so uneven. I just hope everyone will be calm get it out of their system and move on without anything ugly happening.
- Attendance will be down from past years. eBay said they are expecting 10,000, but that would be difficult to imagine with all the unrest in the community.
- eBay will announce new listing option for stores. I'm not quite sure what the fees will be, but if the surveys they sent out last month are any indication, it will be low core insertion fees based on Store subscription. It is possible they will end the SIF format all together and allow Fixed Price core listings for 30-days in core. I think they feel they can control search with "Best Match". Basically this is SIS Part Deux.
- The rumor of the day, is that eBay will prohibit 3rd Party checkout, which would certainly be a problem for vendors like ChannelAdvisor, Infopia, and the rest. 3rd Party checkout has always been a negative with buyers, but mostly because eBay requires software vendors to jump through so many hoops that the process is quite clunky. My guess is they will just require eBay checkout for all transactions.
- The talk in the hallways and on the exhibit floor will be about where else to sell and many sellers will be sharing their experiences at the various marketplaces.
These are just some of the things that may happen at this years event. It is tough to read eBay management these days. It is clear they are moving toward total control over the marketplace and they are demanding excellence out of sellers or they won't get visibility on the site, but it is my opinion that they no-longer have any good-will with sellers and if they have any more missteps, it could be a very long summer.
- First, Google is outed as the mystery protester in the ongoing battle between eBay/PayPal and Australian regulators at the ACCC.
- Next, word that Google Checkout's API is blocking PayPal developers, this was later called a bug by Google.
- Now today I'm hearing from a reader that the Googlebase Store Connector is no longer working correctly. This is the application that eBay Store sellers use to get their items into Google's Product Search. Word is that the problem revolves around the Payment Options field.
Now, you can take off your "Tin Hats" the problems are most likely coincidence and these are just technical glitches with nothing nefarious going on here, but it does add fuel to the ongoing battle between eBay/PayPal and Google Checkout.
Just my 12%
While I haven't spent any time on the look of the site or done any SEO prep, I could take orders on the site, right now. It is not the most user friendly application, but once I got past my concern that it was possibly too technical or confusing I was able to get things up and running.
Here are a few early observations:
- A Webstore seems to make a lot of sense for existing Amazon sellers to develop an external presence for their Amazon listings.
- You still need to drive traffic to your site, but it is setup for easy SEO as well as eMail Marketing and an affiliate program.
- If you are an Amazon Associate, you can sell other Amazon product on your Webstore. Unfortunately there is a 25,000 sku limitation so I used that up immediately by adding Books. I'll have to play with that a little bit.
- Since I only have about 1,000 sku's in stock at any one time but over 7,000 total sku's, I've chosen to sell Amazon items when one of my Sku's is out of stock. So I will always have something in stock and customers will be able to add product from Amazon along with my own product to the cart.
- Since my product is fulfilled through Amazon FBA, I only pay the Amazon FBA rates not Basic Fulfillment rates.
- I can make up to 8% on sales of Amazon product through my Associate account and I only pay 7% on sales of my own inventory.
It is still early, but I like what I see and it seems like a perfect solution for existing Amazon sellers. I'll continue to write about the process as I move through it and let you know when the site officially launches.
Thursday, June 12, 2008
I will be spending some time with Dave White of eBay & Beyond, Basics to Business and hopefully give you a little insight into what is going on in the world of eBay and the rest of ecommerce.
Here is a little video on eBay & Beyond, Basics to Business. Pay close attention and see if you can identify me in the video.
- Alexa 3-Month Avg. Ranking in the US - 2,359
- Compete.com's Monthly People Count is: 563,241. This number is up 70.7% Y/Y
- Quantcast.com shows 42% of visitors are Passer-bys, 33% are regulars and 24% are addicts. (Passer-by 1 visit per month, Regulars more than 1 visit per month, Addicts 30 or more visits per month)
- According to Powersellers Unite eCrater.com has over 1.2 million listings.
eCrater is free and uses Google Checkout for payment processing as well as Googlebase for free listings in Google Product Search. Here is a quick comparison of an eCrater storefront with eBay Stores:
- No monthly subscription
- No listing fees
- No FVF fees
- Google Checkout
- Listings Automatically added to Googlebase
- Discounts for Google Adwords when using Google Checkout.
- Customers are yours
- $15.95 per month for a Basic Store (limited visibility in search)
- $0.03 per listing (under $25 ASP) per month
- 12% FVF on each sold listing including NPB (Non-paying bidders)
- Listing manually added to Googlebase.
- Customers are eBay's
To list 100 items in eBay Stores would cost $18.95 per month and if you sold 10 items per month with an ASP (Avg. selling Price) of $25. Your total eBay fees would be: $48.95 (including the $30 in FVF) in addition to the eBay fees you would have PayPal fees (Could be another 4% or $10).
Let's say you spent $0.48 cents per click with Google Adwords your $48.95 would generate 102 clicks to your eCrater store. You would have to convert 10 of those 102 clicks into sales to pay the same amount as eBay -- you would also save the PayPal fees because Google Adwords advertisers get their Google Checkout fees waived.
Other benefits of eCrater over eBay Stores:
- No jumping through eBay hoops.
- No worries that a Neg or a Neutral FB will put you out of business.
- The customers is yours and if they come to your eCrater store again you pay no fees on their purchase.
- You can market to them to your hearts content.
- You still get free traffic from Googlebase and eCrater Site Search. 61% of eCrater traffic comes to the eCrater home page.
One additional consideration: Many sellers are already taking advantage of these benefits at eCrater. In fact several eCrater stores get more than 1% of the traffic that comes to eCrater.
In fact starauctions.ecrater.com gets 3% of the traffic that comes to eCrater.com each month. To out that another way 3% of 600K monthly unique visitors is 18,000 visitors a month visit starauctions.ecrater.com
If you are a current eBay Store seller, I would recommend you take a look at eCrater.com and take the time to do a 3 month test (depending on your budget).
Here is the test I suggest:
- Start the test July 1st, but open your eCrater store now.
- Look at your eBay bill for last month and see if you can afford to pay that exact same amount with Google Adwords for 3 months.
- List the same number of items in your eCrater Store as you currently have in your ebay store.
- Compare your eBay sales and the whole sales experience over the 3 month period with your eCrater sales over the same 3 months. I chose 3 months, because that will give you enough time to dial in your Google Keywords.
If you do try this test, please email me with your results. I believe the results will surprise you.
Just my 12%