Sunday, December 21, 2008

Top 10 Ecommerce Predictions for 2009

I'm still on vacation but since Ina Steiner has posted her predictions for 2009 and Sue from Tamebay is working on hers and soon to post them (I'll link to her post when ready), I figured I would jump on the band-wagon.

Warning! This list is for entertainment purposes only and should not be used to make any kind of decision. I was correct on 5 out of 10 last year, so I should get lucky on at least a couple of these.
  1. Amazon took over the "unique visitor" title in Nov and Dec of 2008 and will continue to battle with eBay through the 1st quarter of 2009, eventually taking the lead for good. In 2007 eBay took back the lead right after the holidays, this time they may lose it forever.
  2. John Donahoe will get two more quarters to turn eBay around before drastic action is taken, which could mean selling all or part of the business and/or replacing him as CEO.

    There are two major caveats to this prediction.

    *"Its NOT the economy stupid" scenario - If Amazon beats 4th quarter estimates and provides better than expected 2009 guidance and eBay misses 4th quarter estimates and guides lower for the rest of 2009 then Mr Donahoe may be out the door before the 1st quarter earnings announcement.

    *"Its the economy stupid" scenario - If Amazon has a tough 4th quarter and so does eBay (I can't see anyway they will be worse than eBay) than the BOD and investors will give Donahoe a full year to make the turn-around complete, but he only gets 1 more year.

  3. Buy.com will consider leaving eBay in early 2009, but will decide to stick it out at least through Q1. I'm not sure how profitable their eBay business has been and it is certainly much more work and aggravation than their website and Amazon business are. If eBay is profitable for them, then they will stay.
  4. More Diamond sellers will launch on eBay with limited success. Unless eBay is willing to spend money to improve traffic and change the brand image of eBay, they can only hope to get incremental sales that require sizable investments in customer service. Plain and simply, it just won't be worth it.
  5. eBay sellers will have access to large amounts of surplus and liquidation product, but few will have the resources to act on this availability. Those with the cash/credit will be able to source product at unbelievable prices and improve their margins. Online sellers with margin will continue to succeed in a discount environment throughout 2009 both on eBay and on Amazon.
  6. eBay will continue eBay Stores subscriptions in the US, but will eliminate the SIF (Store Inventory Format) eBay Stores will just become a place to gather a sellers FP and auction listings. When they do make this change they will lower insertion fees for Fixed Price items from the current 35 cents and possibly increase FVF in some categories.
  7. eBay's Media category will look strangely like Half.com with items displayed 5 at a time and listed by quality. "Low Price", "Free Shipping" and "Recent Sales" will get you in the top 5 as long as your DSR's are better than your competition. 
  8. Half.com will be shut-down at some point at the end of the first quarter. (Of course I've been saying that for a couple of years, so one of these days I will be right).
  9. Amazon will improve communication and tools for their 3P sellers, but will still not be open to core eBay product categories like vintage items, collectibles and antiques.
  10. Bonanzle.com (my favorite eBay alternative site) will reach 1 million listings by the end of the year and will open up International sites in the UK and in Australia by the end of the year. (No pressure, Bill)
One extra prediction, and this is more of a suggestion than a prediction, but I think it is likely. It is not mine, but I agree [it will happen]. It comes from a post on Seeking Alpha entitled "What will become of eBay?
"There is still a market for online auctions so management can continue to bleed that business for cash while investing in growing the fixed price business to better compete with Amazon. I would also continue to invest in payments to build out the Merchant Services business. Now that Bill Me Later is in the portfolio, eBay can have a run of the payments business on the web given largely failed efforts by others such as Google. I would also continue to invest and make acquisitions along the classifieds businesses and focus on better monetizing traffic through advertising." (bold is mine)

I'd love to hear your predictions.

Just my 15%

27 comments:

Ed (BuildaSkill) said...

Interesting thoughts Randy - I must get around to doing my list too, before year end.

There's two important calendar dates regarding whether JD stays or goes before the end of 2009 -

1st is whether or not there will be a repeat event of the January ecommerce conference where the "new-eBay" was announced this year - the back end of January is therefore critical for sellers and the eBay platform generally, especially as JD's own previous announcements indicate there will be continuous rolling changes through 2009 too.

The other critical date is in June and the annual stock holders meeting. Watch for swathes of promotions through Q2 to try and boost the share price to keep him in situ. If it continues as it did in 2008, then I think there'll be a caretaker CEO leading the stockholders meeting.

Ed

nadine said...

A lot depends on how Wall St. receives the various "it's the economy, stupid!" stories that JD will be telling. Early this year, the Street was very willing to buy JD's turnaround stories; now they are starting to wear thin. Even the analysts have noticed how much of the existing customer base eBay has managed to piss off or simply lose. There will be more critical eyes applied to the Q4 Earnings story, I think. But I've heard not a peep from the Board so far that they are even thinking of any Plan B.

ms.pat said...

I already gave my predictions on auctionbytes a couple of days ago so I'll just copy them to here:

I see a miserable first quarter next year for Ebay. A drastic nosedive as people get over the christmas season of giving and start tightening their belts. I feel this is when the smaller sites begin to take off because people will want the cheap prices they will not be able to find on ebay. Ebay's diamond sellers will, more and more, hang on only to get Ebay's traffic over to their OWN sites. Ebay gives them free listing - what they sell, they sell and in the meantime they get to put their long greedy fingers into Ebay's traffic. Loser in the end: Ebay!

By end of second quarter Ebay may make a desperate attempt to get back it flea market atmosphere as they will become painfully aware their traffic is going elsewhere to buy these rare, unique and vintage items. Those large stores who do not go out of business next year, Walmart, sears, Kmart, Target, etc. will put on such stunning sales in order to keep their heads above water that nobody will be buying from either Ebay OR Amazon.

Those are my predictions for next year. Frankly, it saddens to see Ebay taken down and I bet there are a lot of other small sellers who feel that way too...BUT they must scrape the bottom before they come to their senses. I expect to see the present management team gone long before the end of next year...especially since Whitman wants to try a run for governor of California...she will try to disassociate herself from the Ebay turmoil. Meg...there are an awful lot of ANGRY ebay sellers in California and they have very good memories - they remember only too well that you groomed Donahoe for this mess he's made....save your money!

Anonymous said...

Shutting Half.com is a bad idea. The separation of auctions with open-ended descriptions and fixed priced with closed-ended descriptions with radically different pricing and listing structures is beneficial.

Same for Yahoo and Amazon trying to graft auctions on to fixed price. It makes both worse.

Randy Smythe said...

Anonymous,

Shutting down half.com has been something eBay has tried before but they couldn't move the textbook sellers. Now with 5 cent listing fees in media and rumors that listing fees in media will go away completely they can make the move to eBay. In fact many of them have done that already.

As for auctions and FP in eBay for media listings I agree with you and if they actually do adopt the half.com look and feel then media auctions will be toast.

Right now out of 1,292,127 total listings in DVD only 196,626 or 15% are auctions. In CD's its 10% and in Books auctions are just barely over 10%

nadine said...

The unanswered question about eBay is how much it is still depending on its old bazaar/fleamarket reputation for getting eyeballs. As the sellers of unique items continue to bleed off/diversify, how much traffic will leave the site also? We'll have a clearer picture of that in another six months.

The pure dollar GMV amounts will be harder to read, I would guess, because there you do have the substitution of Buy.com, other Diamonds, and those smaller sellers who can adapt to the new model eBay for the older auction sellers who have left.

JD will of course say, "it's the economy, stupid!" and "this is tough timing for eBay because we're still in the middle of the transition." My question remains: does the Street buy it? So far the Street is turning skeptical but is not calling BS on the story.

My money is on the Board saying "full steam ahead" and giving JD at least two more quarters. FWIW

Anonymous said...

Here is my prediction for 2009. Randy sometime late in 2009 you will slowly give up this blog. I have noticed that the people who reply to your well writen articles are mostly the same people who have nothing better to do than complain about ebay. I figure there are about 8 of them Take a look at the replys from your articles they are the same all the time Ms.Pat writes about 3 replys about the same article. I hope you can write about different things that interest people.You write so well that you should find different thing to write about instead of complaining about EBAY.

Randy Smythe said...

Anonymous,

That is pretty typical for comments on blogs. I get a lot more readers than commenter's.

When I write more positive stuff, mostly about Amazon I don't get many comments at all.

In 2009 I will write about stuff that helps online sellers and probably less about eBay unless they do more stupid stuff.

I would love it if I could write some positive stuff about eBay one of these days.

eBay was the single best "personal empowerment" story ever told, back in the day.

Anonymous said...

Buy.com Enters eBay's top 25 in Feedback 37 comments
2009 or bust-5 Replys
Nadine-10 Replys
Ms. Pat-7 Replys
Randy-6 Replys
Out of 37 Comments 22 where from 3 readers and 6 came from you.This shows why you should take the time to write about different things. This is the last time I will read your blog. I thought it was well written but the same people just keep on complaining about Ebay.

Randy Smythe said...

Anonymous, again you make a point about comments.

Comments are those left by readers who feel the need to comment. Only a small percentage of readers ever comment. Regular readers comment frequently.

If you think the blog is well written please continue reading the posts and stop reading the comments.

nadine said...

Anonymous, it's called a "discussion."

Anonymous said...

Randy-

Surely with all the negative press Ebay got in 2008 with John Donahoe at the helm, the BOD must be thinking he should go. If he stays through 2009, more and more sellers are going to leave, including me. And I'm a die hard.

It's just too stressful to continue wondering what idiocy Donahoe is going to dream up next. The lies and deceit are so transparent. Do we know for a fact this guy isn't mentally off?

I'd take a new CEO or even if Ebay was sold, there might be a chance of it regaining some of it's old luster.

I hope Bonanzle or one of the other sites really come into their own in 2009. I've been on the Powerseller discussion board and a lot of threads are discussing Bonanzle and how much they really like it and have signed up.

I just think leaving Donahoe in is a huge mistake. Period. I doubt even the Diamond Sellers are going to be happy with all his micro managing and punitive rules.

Let's just call 2008 Ebay's Lost Year and move on.

Randy Smythe said...

Anonymous, what amazes me is that John Donahoe was put in charge of the Marketplace biz in Feb of 2005 and he had a quote in a NY Times article last year:"Selling newer products on eBay “didn’t make any sense,” he said. “It watered the experience down.”

Now he is negotiating with large retailers to bring new product to eBay.

It is clear he should go. I just hope the board understands that.

nadine said...

I just got another priceless missive from eBay. The subject line of the email was "Expedited shipping! Order now on eBay" The first part of the email said in large letters "Psst, Don't Forget." This text was right next to two ebay listings...of items of MINE that I have SOLD in the last week.

This is getting to be beyond parody. eBay's idea of marketing is telling me to buy my own stuff.

BTW, I don't even offer expedited shipping unless by special request. It's just too expensive with my items, which are usually heavy glass or china.

ms.pat said...

Sheesh - that one poster has me afraid to post. LOL

I used to think Donahoe had a plan - as time wore on it became evident he's flying SOP (seat of the pants) - experimenting on a multi-billion dollar company. I still think after the new year ebay is going to start softening up on small sellers...not because they want to but because they'll be desperate to stop the flow of sellers leaving. Yeah...they want us to leave BUT when they no longer need us and with they economy they still NEED us. ;-)

On the other hand - small startup sites are willing to pamper small sellers. I just started selling on a site that's much like Etsy - all handmade items. I had a problem with their listing form and wrote and asked a question. An hour later they PHONED me and took their time explaining!

Bonanzle continues to amaze. Now they've made it easy to upload your shop items to Google Base and now it does it automatically. Didn't take them long to make something comparable to Google Store connector - the program Ebay uses. Those guys are thinking ahead!

Henrietta said...

Don't you just love the know-it-alls who post as anonymous? I am just miffed I don't rate a mention!

He/she said "I have noticed that the people who reply to your well writen articles are mostly the same people who have nothing better to do than complain about ebay.." and I found that fascinating since he/she apparently had nothing better to do than count your comments.

I find I run about 50 non commenting readers per comment, I am sure your readership ratio is infinitely higher Randy.

Contrary to 'his/her' expert opinion, I find my visitor count spikes much higher when my subject is eBay and like you I would really like to find something nice to say.

ms.pat said...

OOPS - forgot - if anyone is interested in the handmade item site I just started listing on its called artsite.com

Bob said...

Who is sadder?

The guy who bothered to take the time to tally up how often which readers participate in discussions....or the readers who enjoy being part of a active dialogue and leave comments...

OK, some daily blog posters comment often simply because they love to read their own words. You can't shut them up. Most readers just skip over those folks comments when they see who left them. Same as at auctionbytes, same as at any blog at all...

Anyway, whose do you expect to see posting here? Jeff Bezos? Jack Sheng? C'mon! Those guys are too busy!

Bob

Randy Smythe said...

Bob,

I love all you guys. I enjoy following the discussion. Its just a fact that a small % of readers comment. But I can tell you a lot read the comments.

ms.pat said...

I know I post a lot. Can't help it, I'm opinionated...BUT I read every single post in an article that I post on. If the topic interests me then what other people have to say about it also interests me. I don't post just because I like to see my own posts LOL

DingDong said...

This is the last time I will ever read your blog!! There are too many readers who leave no comment!! All their no comments are too loud!! When I finish reading your blog my ears are ringing from their noise!! Especially the readers who leave no comment over and over!! The repeat ones are the worst!! The noise!! the Noise!! I can't take it any more!! Goodbye forevermore!!

Randy Smythe said...

DingDong,

LOL

2009 or Bust or Anonymous said...

My predictions:

Anonymous will get a hug from a stranger and feel joy.

Anonymous will get a cat and feel love.

Anonymous will get an abacus and count blog entries on it.

Anonymous will start a blog where no one is allowed to comment more than once a month.

Anonymous will write some really misunderstood poetry.

Anonymous will get a late notice on Anonymous' cable bill.

Anonymous will panic.

Anonymous will pay the cable bill.

Anonymous will get back online and check myblogutopia.com and feel better.

Anonymous will apologize for being such a Grinch around the Holidays.

paul said...

I agree with anonymous the four of you need to get a life. Go read a book or something.All you guys do is complain about Ebay all day long. If you hate it that much go sell at another website.Ms. Pat you have to much time on your hands. Go paint another picture and sell it on Amazon.

2009 or Bust said...

Paul, are you one of those guys that complains about what is on the TV rather than changing the channel or turning it off?

People are writing about eBay because they care about it. Because it is important to their businesses and they want to make sure that current management doesn't implode the whole thing.

I think someone may be getting coal tomorrow, Paul.

nadine said...

Not only is eBay still important to my livelihood, current management has not been, to say the least, transparent and straightforward about the direction they are taking the company. Or consistent. (Somebody should really put together the Great eBay Backpedal List of 2008, it's a long one).

It helps to compare notes with other sellers to gather information and try to predict the next turn of direction.

You need information to be ready to react quickly, since eBay has abandoned the idea of providing a stable platform. And as for their communication skills -- well, better not go there.

Sue Bailey said...

Interesting predictions, Randy ;-)
Mine coming up hopefully tonight.

Also interesting that "anonymous" is having a go at your commenters. Putting your name and website link where your mouth is would seem to be a basic courtesy, no?