Friday, September 05, 2008

Will it be Feast or Famine for eBay Sellers in Q4!

I've written before, about the slowing buyer demand on eBay and that the changes being made do not directly target solving that problem. Instead, eBay appears to be trying to manage the decline, so that the share price doesn't take a major hit, kind of like constantly refilling a tire with a slow leak; at some point the tire will just give out.  

As sellers prepare for the 4th quarter, there are many unknowns, especially with the new 30-day Fixed Price listings. Scot Wingo does a great job of explaining the challenges sellers are facing and making suggestions to help them formulate a Q4 strategy, in his most recent blog post.

One thing from Scot's post that stood out as a big concern was: "You may be asking: "why are sellers are so obsessed with this topic?".  Since eBay started changing the finding experience with the introduction of BestMatch, sellers have lost more and more control over how their items show up.  Buyers seem to no longer be going beyond the first page of results.  The first page of results has 50 listings and sellers are limited to 10 items/page now so the BEST case is 20% coverage.  The worst case is 0." (bold is mine)

If this is true, listings not on the first page of search results will have little to no exposure and since Fixed Price listings no longer use TES (Time Ending Soonest) in the Best Match sort, there is a real possibility of never showing up on the first page for the entire 30-days of your listing. 

If you can find a way to get on the first page and stay there, you will still get sales, but if there is too much competition for a particular search; or your DSRs don't quite measure up; or you don't offer Free Shipping, there is a real likelihood you will never get on the first page.

Now one caveat to the scenario mentioned above, is the use of Auctions: Because eBay is still showing Auctions by TES (Time Ending Soonest)  and has rolled back the de-duping of auction listings, the only way to guarantee that your listing will show-up on the first page, at least once during the 7-day listing period, is by listing the item as an auction. Even low DSR sellers will get that much exposure.

There is still a ton of business being done on eBay but it may actually be declining Y/Y, so sellers now will have to fight over those sales and for those that find the right strategy, they will thrive. Those that do not find the right mix will be left out in the cold.

Add the big guys, like Buy.com and others on their way and you add one more level of complexity for the average eBay seller.

So will this be feast or famine for eBay sellers? "You betcha!"

Just my 15%

16 comments:

Poly said...

"There is still a ton of business being done on eBay but it may actually be declining Y/Y"

If the $US holds current levels, then EBay will have a slightly NEGATIVE FX gain in the 4th quarter. This will mark the first quarter in the past 6 without any gains from FX. If the dollar appreciates further, then you will see a significant impact on earnings related to FX. Add that to decelerating single digit marketplace growth and the picture quickly turns nasty.

Tony P. said...

"Now one caveat to the scenario mentioned above, is the use of Auctions: Because eBay is still showing Auctions by TES (Time Ending Soonest) and has rolled back the de-duping of auction listings, the only way to guarantee that your listing will show-up on the first page, at least once during the 7-day listing period, is by listing the item as an auction."


Ah, grasshopper you have much to learn! The power of the Dark Side is sometimes subtle.

There is another avenue to the 'de-dup' state of nirvana AND it is a method to guarantee your listing will show up:

Featured. (with the additional expense, but don't let that deter you from your quest of the ever-elusive carrot)

This is what ebay did to the SRA category when the IS/Cat-Rollup machine rolled thru. Every SRA found their listings BURIED, unless they paid extra for Featured.

Ain't ebay just the slickest (slug) ever?

Cliff Aliperti said...

Often this buyer stops at page 1 because he thinks his search his returned an unusually low number of results that day...oh wait, that's just that bar of advertising placed at the very bottom of page 1's results, just above the page numbering. There are the other 20 pages! Should I go back and do all those searches I missed again? Nah, busy.

Can't they just move the advertising bar below the page numbering so I see the other pages exist? It might help give the general idea that, you know, the eBay listings are more important than the ads.

Randy Smythe said...

Poly, Bob Swan just came out and reaffirmed guidance. He's having a conference call right now.

Tony, yes they are very clever aren't they.

Cliff, eBay is basically becoming an advertising vehicle.

Hector Duhart said...

It’s unbelievable what these guys at eBay are doing: They are taken decisions without deep evaluation, and then when they calculate the new results, they simply roll back.

eBay main source of income is not on FVF, it is on insertion fees (at least now). The model will not work with FVF's only, that's why they rolled back the auctions.

At the end, day fixed lists will become store items, no one will see them, but instead of paying 2 cents for them you will now be paying 35 cents.

If you want exposure, you will have to pay for it, by using standard auctions or the outrageous featured listing fees.

eBay must understand that sellers need the 4th quarter strategy now, and it is absolutely impossible to design it with all those changes.

Also if you haven’t noticed, currently Best Match is not promoting the free shipping listings on the auction format, only on fixed items.

Anonymous said...

Randy,

Has anyone else noticed that buy's listings for DVDs and CDs on ebay have recently surged? I haven't been watching their other catagories, so I can't say if those have seen any change in listing volume...

Also, it is my understanding that DSRs will still effect best match DEFAULT search results for auction format listings, same as it does now...only ebay knows how much weight each component of the algorithym will have, but they insist that lower DSRs will not get the same exposure, anywhere in core, regardless of auction vs fixed price....

Stephen

Randy Smythe said...

Stephen,

Yep, Buy has increased the sku's they are listing in those categories; basically all categories they are in. It will be interesting to see what happens with Buy on the 16th. I can't imagine they will be forced to go to 15% like everybody else.

As for DSRs, yes DSRs are part of Best match for both Auctions and Fixed Price but because ending soonest is part of the sort for Auctions, they will always have some time on the first page. Fixed Price, not so much.

Anonymous said...

I guess it won't be until our sales drop to almost nothing before we all leave.

My daughter is a long time occasional buyer. She was recently searching for something and came to the ad links at the end of the page and thought "that's all." Fortunately, she scrolled down and found the pages numbers to continue to the next page, but how many other less knowlegeable buyers just stop?

I can't stand riding on a sinking ship but there's no SOS boat in sight. I don't sell new or media. I just have to wait until Ebay fails completely (or I do) and follow the flock to the next new Ebay.

nadine said...

Randy,

The news of Matt Carey's leaving eBay brought to mind this famous quote from Rudyard Kipling:

Findlayson thought it over from the beginning: the months of office-work destroyed at a blow when the Government of India, at the last moment, added two feet to the width of the bridge, under the impression that bridges were cut out of paper, and so brought to ruin at least half an acre of calculations

Working as CTO for a management that is so obviously just winging it instead of planning must be an utter nightmare. This is what system thrashing looks like in action.

If eBay had laid plans to render the site unstable and drive off sellers they could hardly have done better. Let's ask the question in reverse: who are clear beneficiaries of their new policies? Are there any? I can only think of Buy.com. Can you think of any others?

Tony P., where are you selling now, besides your B&M?

ms.pat said...

"This is what ebay did to the SRA category when the IS/Cat-Rollup machine rolled thru. Every SRA found their listings BURIED, unless they paid extra for Featured."

This has been true of the SRA category since 2004. We've been literally forced to feature or not be seen. I guess now Ebay is trying to fix it so that every auction in just about every category will have to feature to be seen!

Thru all this will somebody tell me ebay is better off now than before all the changes? If so, why?

Anonymous said...

They are cramming fees thru mandatory paypal to preen it for sale.

'Rev' ebay till it blows up, brag about PayPals numbers that Q, then sell PayPal QUICK- and cash out.

I just don't see any other benefit to this months madness.

Tony P. said...

Nadine, I've got a website, but it has been in limbo for about a year. Been busy with RL. I still have a store on ebay and have even less there than on the website. Quite frankly, it's barely worth any effort at all.

I was thinking about listing some items on ebay, before all of the new policies take effect mid-month. I checked the search board to just see Whatzup and postings there convinced me to hold off.

The BM sort is going through fits of multiple personality disorder. The ranking on Page 1, is the opposite ranking of what is displayed on the last page... that means the Exact Same listings are shown on both pages.

In a word... FUBAR.

nadine said...

Thanks, tony. I just started on RL myself. I'd be interested to see your store. My ebay id is serious_coder so you can contact me that way so we don't keep using Randy's comments section!

Tony P. said...

YW, Nadine. I should clear up something - Randy won't mind :)

In my "old crap" world of selling, RL stands for Real Life. I plumb forgot about Ruby Lane.

I have read many fine postings on the ebay boards by serious_coder. Just wanted you to know that!

I'm taking a real sabbatical from posting about ebay for a while. No more stock analyst blog comments for me. I'm tired of it all.

There's a lot of fresh voices out there now and they'll carry the message. Besides, I have seen all I need to see, to know we are no longer considered simply Noise.

Sept 9, 2008 - today ebay stock fell below the $23 ceiling. Mr. Softy just looked south.

Randy Smythe said...

Nadine,

Tony's right, I don't mind.

Tony,

Don;t you dare stop posting on MyBlogUtopia. :)

tekgems said...

> Buyers seem to no longer be going
> beyond the first page of results.

This has been the case with eBay search (as well Google organic search) for many years now. There is some click-through on the 2nd page, but a much smaller percentage. Subscribe to Sellathon see the stats on your account for yourself.

Its not all bad news though... The de-dupe of results will make it so that the number of unique results on the first page will increase. So, for those in competitive categories (e.g. keyword search brings up multiple pages) will possibly benefit from the filtering.