Thursday, August 21, 2008

eBay Management - Where's the Demand!

These latest announced changes are meant to shift a large amount of inventory that sits in eBay stores, up "above the fold" into CORE, where the vast majority of eBay transactions happen. I'm all for that thinking.

Stores have always under performed because they are so far down the search list, or often not in search at all. Now with the fee changes for Fixed Price items there is no reason to list items using SIF (Store Inventory Format).

So all of that product, that has been on eBay for years will now get surfaced in CORE. Well this is where eBay earns their money. Sellers pay for exposure and eBay's main job is to stoke demand for product that sellers sell.

Soon the supply will be there (in CORE) but will there be enough demand? Based on these moves, eBay managers must believe there is enough demand on the site, or they wouldn't make this move.

It's like in the Wizard of OZ when Doorothy and crew went to see the Wizard and they met this booming voice with smkoe and fire, but when you pulled back the curtain it was this mousey little man runninh things. The changes that eBay has made here will pull back the curtain on the demand on eBay. I hope they are ready for the potential fallout.

Buy.com has been in CORE with more than 800,000 listings and has a 2% STR (sell thru rate) which is comparable to the Store STR for most other sellers and Buy.com is dominating their categories.

Media sellers are getting a sizable increase in fees to move to the new listing strategy. In stores they paid 3 cents and 12% FVF, now they will pay 5 cents and 15% FVF if the demand is not there and they don't see a huge increase in STR from what they experienced in Stores this will end the life of many of these business on eBay.

If eBay does not stoke demand for all of this new supply, these changes will be an unbelievable failure.

eBay, demand is your job. You better start working on it now!

Just my 15%

4 comments:

ms.pat said...

I am really beginning to think that Ebay feels all they have to do is look as much like Amazon as possible and everything will come to them. I also feel they are doomed to failure with this plan. As a long time ebay seller I know demand, in general, has gone down and there is no excitement in the site to pull buyers into it - and certainly no advertising. New fees have turned off potential sellers who may also become buyers. Ebay sees none of this. Now they are going to eliminate a segment of buyers who only use cash, check or moneyorder. These are mostly the elderly who will never trust the internet enough to put their credit information on it and the the low income people who save to make a purchase. Sellers will now have to tell these buyers they can't sell to them!

I really do believe Ebay trips from quarter to quarter and when a quarter looks bad they simply squeeze more out of sellers...believing sellers are a bottomless pit. I don't feel the new fees are going to do much more than glut the site with anything and everything - buyers will pick over it but it won't end in any more sales because sellers are so strapped now that they can't afford to offer bargains! Now I hear ebay will tie free shipping to standings in their listings! It never ends!

Ebay continues to clutter the site, make it almost impossible for buyers, especially, newbies to navagate. Generally, when a smart company sees things going bad they are willing to take a hit in revenue in order to try to make things right again. Ebay, simply tries to squeeze revenue out of sellers and at the same time are oblivious to what those sellers need in order to sell. They can't see past their assumption that they are the only game in town.

Maybe I'm just a pessimistic old curmudgeon but I see failure in these new fees and further selling restrictions!

Tony P. said...

Ms. Pat, I'm with you on the 'big picture' that this presents.

Maybe ebay is trying to generate some sort of Critical Moves within the site and perhaps it's just coincidence that all of these moves will 'inadvertantly' bring more to their coffers.

Sheesh! It sure looks like a junkie trying to just come up with this quarter's 'fix', don't it?

Any potential hit to their revenue is slated to be recouped from the Paypal Only move. Oops, my bad. It isn't Paypal only... you can still use any of their designated electronic processors. All ONE of them.

Yo! Randy! Did they even offer anything in the way of an explanation about the "Paypal Only" dictate, and their earlier proclamation of "not in the plans for the USA" statement?

I believe the Paypal Only policy will be the winner of this set of change's Worst Possible Thing To Do. Some sellers will certainly change their own policy and accept paypal. Some buyers will also, but many won't and the majority of them are of one specific group.

Collectibles and antiques in auctions. That won't help the demand for those items, nor that auction venue.

Anonymous said...

The two words that lethally destroy any established site are not necessarily "this sucks."

They are "What's this????"

CLICK--

gone.

Anonymous said...

tony

"Sheesh! It sure looks like a junkie trying to just come up with this quarter's 'fix', don't it?"

Soon, management will start breaking into the cars in the employee parking lot!