Tuesday, October 21, 2008

Digging for Diamonds!

I didn't really expect the Diamonds to be this difficult to find. I know they are out there, but appear to be in stealth mode or are just testing things now. 

As far as I can tell, not one has launched a huge amount of items yet (other than Buy.com), but as the holiday season gears up, who knows what their listing strategy will be.

Here's what I'm hearing to date: (Most of this info is second and third hand, so take it with a grain of salt)
  • Several Diamonds are still waiting in the wings and haven't signed their eBay deals yet. What could they be waiting for?
  • Some potential Diamonds have turned eBay down. Could it be that they don't see any value in being on a marketplace that has cancelled Christmas.
  • Many are already on the site and selling their product but are in stealth mode. I don't have any actual numbers but there are more than 5 and less than 100. I can understand their reluctance to promote their brand on eBay, after the Buy.com treatment. Buy.com has received a lot of press and is at the center of the Diamond Seller protest; including a recent PeSA position paper.
  • Many are not going by their brand names, so they are difficult to identify.
  • They will most likely be in commodity categories, like Electronics, Auto Parts, Computers, and Media.
As I've said in the past, I can't imagine any large online retailer wanting to sell on eBay in the current environment. I can imagine that even Buy.com will re-evaluate their involvement on eBay after the holidays.

Why would a respected online retailer want to sell on eBay? I think Buy.com, believed the eBay sales pitch and thought things would be much different then they actually are. 

It seems so simple, eBay has 70+ million unique visitors a month so their must be plenty of sales to be had. But, there is an investment required to get up and running on eBay from a software and management perspective, there is potential bad press, could be potential damage to their Brand by being associated with the eBay marketplace, as well as the intense customer service requirements required on eBay and the relatively un-impressive sales potential.

So after all that, I would be surprised if there were too many Diamonds left on the site after Christmas, but I'm hunting for them now, and could use your help. Do you think there is a Diamond in your category?

Here are some things to look for:
  • Are there new sellers in your category with lots of new "in-season" inventory in Core?
  • Are there any well known retail brand names selling in your category, with Outlet as part of their store name? This doesn't mean that everyone with Outlet in their name is getting the Diamond deal, but if the brand is well known it is possible.
  • Are their new sellers getting preference in search, after all this was part of the eBay sales pitch.
  • Here is the list of Internet 500 retailers, some of which may be now selling on the site.
I am not suggesting a witch hunt here and please don't target sellers you think may be Diamonds, just identify them and send me an eMail  rksmythe at yahoo I will do the research, contact the companies and take it from there. 

I am not really trying to out them. I want to contact them and explain what they've gotten themselves into. 

Just my 15%

14 comments:

permacrisis said...

I'd never really paid much attention to the I500, but followed your link.

I was very surprised not to see WalMart.com in that top 10.

Doubly so, that Sears holding WAS there. It speaks Volumes about the customer base of both.

That doesn't portend well for ebay.

Anonymous said...

Randy, I am seeing more and more duplicate listings in media. Things like the same item with slightly different prices from the same sellers. People are definitely testing the waters.

It just so clear that nobody with a solid consumer brand wants to be associated with the ebay brand for anything other than liquidating inventory. Ebay is poison right now.

ms.pat said...

There's one other thing Ebay is too arrogant to consider. We're on the verge of a holiday season - one that the brick and mortar stores are not going to let go of without one heck of a fight. I hear Walmart is already dragging out Christmas stock and readying holiday sales and they can slash prices with the best of them. ALL large discount stores will be doing the same...they have to in order to make it thru. I've already even noticed great sales at my supermarket - the same place that gouged me when gas prices soared! Ebay will NOT be the only game in town- far from it. They'll be in short supply of the small sellers bargain hunters look for and their "diamond sellers" have to battle with the big outside stores who will all be running great sales! I think they may end up not listing much at all since it will be wasted manpower. This should be exciting to sit back and watch :-) I still say Donahoe will be gone by end of quarter one 2009.

Anonymous said...

burbanksportscards is a diamond seller in sports cards. supposedly they didn't get the same deal as buy.com and have only launched a million or so listings.

David said...

Randy, I'm going to send you a link to Pierre on eBay live from 2005.

He claims that the reason he started eBay is that he wanted "individuals" to compete with big corporations on a level playing field.

It sounds good, but my gut tells me that eBay was created as a hobby, and by accident it became a huge public company.

Anonymous said...

Aother Brand Name Diamond seller in making as Powell's books store ???
http://stores.ebay.com/powells-bookstore-1

Check it out, I'm not sure.

Randy Smythe said...

Burbank Sports cards was a seller on eBay before the Diamond announcement, perhaps they are one of the few who was able to negotiate a deal with eBay.

Powell's Bookstore is certainly a Diamond Seller with sales in 2007 of $19 million. They are very big on Amazon and are ranked #333 in the Internet 500 list.

Perhaps they are taking some of Buy.com's sales in the books category.

Moonlight said...

Randy,

Do you only want to know about sellers that have signed up with eBay since the Diamond announcement?

I'm wondering if some of these big listers that have been on eBay for quite some time might be a bit miffed when they find out that they haven't gotten the same deal as buy.com. I know some on the I500 list have between 25,000 and 90,000 items up right now.

Randy Smythe said...

I think quite a few of the I500 retailers have had accounts on eBay but not sure how active they have been.

If they were on eBay before the announcement then they have to meet the $500K GMV per month and 4.8 DSR requirements, otherwise they won't qualify for Diamond.

Moonlight said...

Of course. The sellers I'm looking at can't possibly have that GMV.

I don't even understand how buy is accomplishing that right now. But, I'm just a small seller, so I don't think on a large scale. I guess it's the season. I wonder what percentage of their sales comes from their eBay listings.


p.s. Many, many small sellers follow your postings, Randy. :)

Randy Smythe said...

Moonlight.

I estimate that Buy.com gets 5% of their sales from eBay listings. I'm sure that was lower than expected.

Moonlight said...

So, assuming they pay some sort of FVF, all they're really getting are additional addys for their email marketing? For such a small return, it seems like a lot of trouble. Even though buy just dumps its database into eBay, I would think someone has to monitor the compliance regs, as they're constantly changing. But, that might just be my small scale thinking again.

Thank you for responding to my musings.

Randy Smythe said...

It does look like BestBuy is still selling on eBay but through Dealtree. It looks like returns and that type of stuff. Their DSRs are terrible. I wonder if they are getting a Diamond Deal?

Anonymous said...

Philips Outlet is now on Ebay
http://www.outlet.philips.com/ is officially closed, the company has put their refurbished items on ebay
http://stores.ebay.com/Philips-Ce...Z2QQ tZkm