Thursday, August 21, 2008

What Would Happen if eBay Sellers Didn't Take the Bait?

Okay, bear with me here ad I reason this out.

Media sellers seems to be the most concerned about these changes, but they shouldn't as long as they can adjust their model and collude with other media sellers. Sorry, "work with" is so much better than collude.

Here's how it works:

The long-tail items stay in stores where you pay $0.02 less to list and 3% less on the back end. Only put product in core that you know sells regularly or is high ASPand keep the inventory updated; daily if needed. You don't want a listing to end because the recent sales history ends with it.

Don't put all 2 million media items in FP core. Out of 60K DVD's available, you probably regularly sell 5 - 10K different titles in a 6 month period, only list those titles in CORE that you have a good sales history on and keep the rest in stores.

The problem with this approach is that there will always be one guy who breaks from the crowd and lists there entire catalog in CORE. Once that happens everybody else has to do the same thing and all hell breaks loose.

Just my 15%

11 comments:

Ali said...

Yes, that seller is buy.com

The more sellers that put their inventory in core the more it necessitates other sellers to do the same as their store items will be even more difficult to find.

Excellent point.

Outgoingebayseller said...

Very good post!

Your last paragraph speaks volumes, I'm afraid.

With this much competition in the ebay media catagory (sellers in 2008 vary from both the nimble to the completely foolish/living on only cash flow month to month), there really is no hope of reigning in "that one guy"...

"That one guy" is really more like 3 to 5 different sellers who will sell at an overall net loss, forever, just to sorta pay their bills. It's a harsh reality out there.

Randy Smythe said...

Anonymous and outgoingebayseller,

The only way these fees work for the category as a whole, is if there is restraint by sellers.

I know that won't happen out of necessity, too many bills to pay.

ms.pat said...

I don't understand why ebay treated media sellers different from the rest. Why the high FVF? Are they trying to discourage media sellers from glutting core with their wares? Someone please explain because I'd like to understand this.

Randy Smythe said...

Pat, they have been trying to fix the Media category for years and this is their latest attempt.

moviemars said...

In general, I agree with your assessment. It will be interesting to see how many sellers out there can afford to dump 100,000+ items in CORE. 5 - 15 cents is not exactly cheap. My guess is that most large sellers will have a "wait and see" approach (before summarily flooding CORE). In that case, we'll all be in better shape. At this point in time, I would recommend eBay making store listings for media free, sort by total price and show feedback in the listing. If they truly want to be competitive with AMZN marketplace (in media), they need to emulate their model somewhere (not in CORE).

Randy Smythe said...

moviemars, thanks for the visit.

I would love it if media sellers showed some restraint in adopting the new FP and just converted current core lsitings to the new format, but the moment one does everyone else will join them.

The S&H cap is going to be fun also.

Tony P. said...

JD: How can we make it look like the site is FREE, yet make buckets of money?

LN: Give 'em something that looks like something, but it's really something else.

JD: Oh, L you are my girl. Whatcha got in mind?

LN: Give them 30 day listings at a greatly reduced fee.

JD: That sucks! You want me to open that Nigeria office and put you in charge?

LN: Wait for IT! The 'greatly reduced fee' is still more than current store fees and we'll RAISE the FVFs (and call that an 'adjustment'). Sure, we'll lose some auction-style FP fees, but that won't matter.

JD: How so?

LN: It's the Cut-Throat Principle. The first seller that dumps his entire store inventory into Core, will be followed by ALL other sellers in that category.

JD: The clutter will come out? ALL of it?

LN: Yes. And just think of all those 3-cent listings turning into 35-cent listings. $$$$$$$$$$$$$$$

JD: Yeah, but won't that flood the site?

LN: Oh yeah, but that's the beauty of this plan. That'll give us fodder for our next series of Changes; we can use the clutter as an excuse for ANYTHING we do!

JD: That sounds familar????

LN: Yep, Corn Cobb thunk that one up. I'm gonna miss him.

JD: Yeah, me too... with every shot so far.

JD: But won't the STR and ASP fall like brick? What will we tell the analysts?

LN: One word, baby... CLUTTER! See? It's a beautiful thing! We'll say how we gave the Noise an opportunity to make sales and they screwed it all up with their Greed. Yes!

JD: And those buckets of money will have our revenue numbers UP again, right? All without providing one damn real tangible piece of business product or advertising expense.

LN: How come the Street doesn't ask how we make more and more money, all the while our "seller's businesses" are in decline?

JD: They don't give a shit.

LN: Sounds like we all have something in common! What say we go down and 'key' some employees' cars?

JD: I am so there! Too bad we couldn't find Randy's car the other day; I brought that beer can opener and everything.

Randy Smythe said...

Tony,

Thanks, I loved that.

joyful alternative said...

What eBay ought to do is fix half.com.

Randy Smythe said...

joyful alternative,

Unfortunately Half.com is really a textbook marketplace right now that is very profitable for eBay. It is profitable becasue they don't spend any money on it.

If they fixed it they would have to spend money.