Wednesday, April 30, 2008

eBay Sues Craigslist, Now We Know Why!

eBay has made the document public and I've posted a link in case you want to look this over your selves. Have fun.

The New York Times has a pretty concise take on what transpired.

Amazon FBA Will Not Raise Shipping Fees Along with USPS!

I just heard today, that Amazon will continue to maintain their fulfillment rates, even with the announced increase coming from USPS in mid-May.

This is good news for me, since I'm the one paying those fees, but sellers who self-fulfill orders are not as lucky.

Smaller sellers who use the Post Office will see a slight increase in their postage fees come mid-May, but sellers who use services like SmartMail/DHL and UPS Mail Solutions are in for a big surprise.

I spoke with several media sellers who are expecting rate increases of 30% using SmartMail/DHL or UPS Mail Solutions. Ultimately I believe the backlash from sellers will bring that percentage down for high volume accounts, but there will still be sizable increases.

They will have to pass on those increases to the customer in an already low-margin, highly competitive environment.

This is just another reason, I am glad I chose to use FBA. This almost makes FBA's Basic Fulfillment worth considering.

Update: There appears to be some confusion regarding the information in this post. I was speaking only about FBA's fulfillment rates. The post has nothing to do with Amazon's shipping reimbursement for marketplace sellers. I've got an email in to them on that topic and will get back to you.

eBay Bailing on Stores Listing Format

Sure, the US announcement hasn't been made yet, but you don't need a crystal ball to see this change coming. The recent Stores Survey tells us that.

Ina Steiner posted today that eBay Italy was discontinuing the SIF listing format (Store Inventory Format, or Store Insertion Fee, take your pick) in favor of a new 30 day Fixed Price format in Core. eBay Italy is the first marketplace to make the change.

In theory, I like this idea, as long as the numbers shake out financially. Of course in some categories like media every SKU available in the world will now be available on eBay; if the new 30 day CORE listing fee is priced right.

Once again, based on the announcement from Italy, eBay is making a broad change to the entire marketplace rather than fine-tuning each category, but hey its a start.

Just my 12%

eBay Says they Are Cheaper Than Amazon

At the PeSA Summit in New Orleans, eBay held a Q&A session about the many changes on the platform. I did not attend because I was goofing around, but RBH (Richard Brewer-Hay) from eBayInk did and he's added a couple of posts about it on the eBayInk Blog.

One of the Answers that interested me most was from Monroe Labouisse, Director of North American Marketplaces, PayPal.

The Question: by eBayInk reader CrunchyPostingGoodness

"Why isn’t PayPal confirming all buyer shipping addresses for all sellers? Amazon guarantees every shipping address for all of their sellers. I doubt that Amazon can actually verify every address, just like I’m sure PayPal can’t either, however Amazon does assume all responsibility and protects sellers who ship to any address specified by the buyer at checkout. Even if PayPal can not physically confirm every address, it should still provide the seller with the same protection, as if the address was able to be confirmed."

The Answer is long and I only want to comment on one part, but in order to provide context I have included the entire answer and highlighted the section I want to comment on.

The Answer:

  • At PayPal, we agree that we should help protect sellers from fraudulent buyers and we do it today in a variety of ways. One way is that, using new fraud detection technology, we have greatly expanded the number of confirmed addresses for all sellers in our system in the past two years. A second is that we have just introduced expanded seller protection for eBay PowerSellers in the US, UK, Canada and Hong Kong (and in Australia we’ve rolled out seller protection for all sellers), in which, as you suggest, a seller just has to ship to the address provided by a buyer at checkout. It’s free for PowerSellers, no longer has a coverage limit, and addresses aren’t “confirmed” or “unconfirmed” anymore - you just ship to the address provided by the buyer through PayPal. Provide great experiences for buyers, qualify for PowerSeller status, and then along with the many other benefits eBay provides, you can get this protection from PayPal.

    Two other things that are worth pointing out, in reply to your comment: 1) contrary to your statement, Amazon does not protect sellers who ship to “any” address provided by a buyer in checkout (I’ll explain more below), and 2) Amazon charges more for transactions at high price points (where fraud is most likely to take place) than eBay and PayPal together charge.

    On the first point, it’s more accurate to say that Amazon protects sellers who ship to the address that Amazon “allows” to go through checkout, not that they protect sellers who ship to “any” address a buyer provides. Before allowing a transaction to go through, most payment systems (including PayPal’s and Amazon’s) will check the safety of an address. If an address is considered unsafe, then the transaction may be denied, or the buyer may be required to provide more information to authenticate the transaction. In both cases, a sale may be turned away. And to my second point above, in part to cover the cost of fraud at high price points on transactions it is letting through, Amazon charges you more than eBay and PayPal combined.

    At PayPal, we are taking an approach to protections that we think is better for sellers’ businesses. First of all, we do protect sellers on a large majority of transactions. Second, sometimes we let transactions go through that we choose not to protect, but we let merchants know when that is the case and provide them with information they need to decide on their own what’s right for their business. And finally, we charge less at high price points than Amazon - and less than the electronic payments industry in general across all transactions.

    So, since Monroe brought up the difference in cost between Amazon and eBay and in essence said Amazon charges more to protect sellers at higher price points (my words not Monroe's). I thought I would provide a comparison from a comment left on the blog post by TheBrewsNews

    QUOTE: “On the first point, it’s more accurate to say that Amazon protects sellers who ship to the address that Amazon “allows” to go through checkout, not that they protect sellers who ship to “any” address a buyer provides.”

    My response:YES YES YES and YES again!!!!! That is EXACTLY what I want as a seller. Don’t give me an eBay order where the buyer won’t pay (but of course I get the privilege of paying fees to eBay for that nonpaying bidder) and then if the bidder does pay there is a good possibility that I won’t be protected. I would gladly take an Amazon order ANY DAY where the address I am given is one that Amazon “allows.” If a customer on Amazon continually claims not to receive packages from a variety of sellers then guess what Amazon does? Yep, no more orders allowed for that buyer / address. Sounds like HEAVEN to me!

    PLEASE that is EXACTLY what we eBay sellers are BEGGING eBay to do…. get rid of the deadbeat and fraudulent buyers. Or, at the very least, allow us sellers to do it ourselves by linking any new buyer’s IDs to their current or previous IDs so that we can block them ourselves. Instead, eBay is opening their welcome arms to all the Amazon-rejects. I guess that is one way to get new eBay buyers.

    **************************

    QUOTE: “And to my second point above, in part to cover the cost of fraud at high price points on transactions it is letting through, Amazon charges you more than eBay and PayPal combined.”

    My response: Yep… you are right again! And I absolutely positively want that. Let’s compare my eBay versus Amazon sales for ONE particular “high price point” item. I offered the SAME exact item for sale on eBay and Amazon. I sold the item in both venues.

eBay Sale

  • Took me three times to list before it was sold. Paid insertion fees 3 times. Of course, I cannot get nearly as high a price on eBay as I can on Amazon for the same exact item so I have to offer the item for sale at a significantly less price AND I offer free shipping on eBay. So….
  • Item sold (after 3 attempts) for $199.99 and free shipping.
  • eBay fees (insertion and final value fees) of $13.76
  • Paypal fees $6.10
  • Total paid to eBay / Paypal - $19.86
  • NET proceeds received - $180.13

Amazon Sale:

  • Of course I receive a much higher price for the same item AND I charged shipping fees to the buyer.
  • Item sold for $259.99 plus $28.77 shipping.
  • Insertion fee - $0
  • Amazon commission $43.32
  • NET proceeds received - $245.44

It’s kind of a no-brainer for me… I get $180.13 net proceeds from eBay or $245.44 net proceeds from Amazon for the exact same item. Amazon can charge me more than eBay any day! For me, it is a Win/Win on Amazon for high price point items.

**************************** Used by permission.

This comparison blows me away:
TheBrewsNews received 36% more net proceeds from the Amazon sale then from the eBay sale on the exact same item. They paid 118% more in fees to Amazon than they did to eBay, yet they would take an Amazon sale over the same eBay sale any day of the week.

Let me be clear to any eBay employees reading this; it is not about the fees!

Sellers want profitable sales and they will pay more for that. The only reason you constantly hear complaining about fees is because the value that sellers receive for those fees is less than it is worth.

Amazon does not have the ""discount factor" that eBay has because Amazon customers Trust Amazon to protect them.

Just my 12%

Tuesday, April 29, 2008

New Competitor to eBay? Wigix

There have been all kinds of articles written about the launch of Wigix.com as a competitor to eBay. I've added several of them to MyBlogUtopia Reader, but I decided to make my way over to the site to check it out for myself.

This is not going to be an in-depth review of the site, nor is it going to be just a regurgitated press release -- it is strictly my 12%.

The site looks clean and simple enough, but it just isn't intuitive. It appears the site's developers wanted to create a kind of NASDAQ for consumer goods -- a marketplace where your inventory grows or declines in value. The metaphor is lost on me.

One of the reasons eBay has lost buyers, is because they just want their product and want it now. They are tired of waiting 7 days for an auction to end and they certainly don't want to do the amount of work Wigix appears to require.

Companies like Amazon and Zappos are excelling at providing a great "customer experience" and that is the wave of the future for ecommerce not something like Wigix.

Wigix, is an example of an interesting idea in concept, but not a viable idea in reality. eBay need not worry that Wigix is going to take their auction business away and sellers will have to keep looking for the "Holy Grail" that frees them from the tyranny of eBay.


Just spin of eBay Classic and everybody will be happy.

Just my 12%

Pierre Omidyar and the Level Playing Field

eBay's "level playing field" mantra has been a "sacred cow" at eBay for many years and in fact when I was selling on the site, the "level playing field" was the reason I was given, for eBay's unwillingness to negotiate volume discounts, etc to large sellers.

Well, thanks to Richard at eBay Ink we now have Pierre's version of what he meant regarding the "level playing field" on video for all to see and hear.

I've embedded the clip below:



Listen very carefully to the last portion of the clip when Pierre talks about large retailers getting back room deals to sell on the site.

There are two additional clips on Richard's post that are worth the listen and you can find them here.

Tell me what you think. I'll add my 12% in the comments section.

More Ways to Follow Me on the Web!

Now, you can find me all over the web:
  • On Twitter - I'm now using Twitter as an extension of MyBlogUtopia. I've found Twitter is best for what I call "quick hits" (speculation, news bytes, etc.) but I will occasionally throw the "just went to the Micky D's" tweats out their just for added flavor. 64 followers and climbing.
  • On Seeking Alpha - I'm now posting much of my content over at Seeking Alpha, a financial blog aggregator. Some of my posts may be beneficial to investors, so I post investment related pieces on Seeking Alpha. The nice thing is they show-up on Yahoo finance.
  • LinkedIn - If you want to take a look at my eclectic background or connect on a business level take a look at my LinkedIn profile. Feel free to add me as a contact.
  • On SquidWho - Since I'm not important enough for a Wikipedia article, I created my SquidWho profile which includes info on my business background, but also a ton of stuff on me personally.
  • If you want to see some of my content from the early days, before I launched MyBlogUtopia, check out my posts at Associated Content. I haven't posted anything new over there for quite awhile but its fun to see what I thought about ecommerce back in late 2006.
  • Subscribe to MyBlogUtopia Reader - This is an RSS feed of the articles I read each and every day including weekends. These are articles I find of interest and I want to share with my readers.

    Only 30 of you have subscribed so far, but I think it would be worthwhile for the rest of you. Let me do the searching for you. I have plenty of time on my hands.
  • Subscribe to MyBlogUtopia RSS feed. The vast majority of my posts are read by subscribers rather than actual visitors to the blog.

    In my feed I give you 100% of MyBlogUtopia content in the RSS feed so you don't have to click over to the blog if you don't want to. I realize this cuts down my opportunities to generate advertising revenue but I'm all about the "Reader Experience"
  • My Facebook profile - I don't spend much time on Facebook because I haven't found a place for it in my daily routine. Maybe someday soon.

That should be enough. Don't be a stranger now.

My Q1 FBA Stats!

Just thought I would share some of my Q1 FBA (Fulfillment by Amazon)Stats.

Revenue and order numbers for Q1:
  • Total orders - 3155
  • Total Revenue - $43,107.52
  • ASP - $13.66

FBA Order Breakdown:
Update Revised Numbers in Bold - Thanks Nate!

  • 21% of orders were to Prime customers
  • 55% of orders were to Super-Saver customers
  • 24% of orders were to customers that paid my higher price ($2.97 over lowest price) plus the Amazon S&H fee.

It blows me away that a quarter of my orders were higher priced than the competition by $2.97 and I still got the sale. I'm not sure what % of those orders were purchased based on position in search or because the order was fulfilled by Amazon.

76% of my orders had basically no competition because competitors items were not qualified for Prime or Super-Saver shipping. This is a great opportunity for smaller sellers to get an advantage over the big guys.

With over 2 million sku's in the media category I don't anticipate bumping into many FBA competitors for the foreseeable future, even if all of you guys start to do this.

Monday, April 28, 2008

What is John Donahoe's Plan?

If you are like most eBay observers, you are anxiously awaiting the "New eBay".

Sellers want to know how it will impact their business, investors want to know how it will grow value in their holdings and bloggers want to "guess" at what it will actually be.

We may actually have a hint, in an article from John Donahoe's past.

In 2002 as the Managing Director of Bain & Company, John Donahoe wrote an article called The Last Legacy of the Dotcom Era (special thanks to permacrisis for finding this). In the article. Mr Doanhoe makes the following statement:


"When Bain & Co. analyzed 2,035 publicly held companies with annual revenues of $500 million or more in the United States, Canada, Britain, Fr ance, Germany, Italy, and Japan, we found that only 14 percent had achieved sustained, profitable growth for a decade. And we defined sustained as posting year-on-year real revenue and profit growth of at least 5.5 percent while repaying their cost of capital.

What distinguished these performers from the rest? A strong core business, or multiple cores, that dominated their industries. This rare, valuable trait primes a company to successfully pursue a broad set of corporate - venturing opportunities. For companies with a weak core ,
however, such opportunities are limited. The first priority of these companies should be to strengthen their core, not divert people and capital into new ventures."


It is clear that eBay has at least two core businesses (Marketplaces and PayPal) and a third that is a leader in their industry but doesn't fit in the corporation very well (Skype).

The Marketplace business is the weakest of the three, as far as performance and it is still the biggest eBay business. So it looks like eBay management will be doing everything in their power to stoke the Marketplace fire and is likely to divest themselves of businesses that do not make the cut -- see my "Dead Pool" post.

I would suggest you read the entire article if you want to get a feel for the direction the company is going to take. Sure, it was written in 2002 and the thinking may be slightly outdated, but it sure answers a lot of questions regarding the direction eBay is taking in this turn-around.

Just my 12%

How to Grow eBay's GMV! Free Shipping.

eBay has hit on a fantastic little idea here to spike GMV growth and increase FVF's -- Free Shipping.


When sellers offer Free Shipping they get advantaged in search using Best Match, but is the S&H really "Free"? Most sellers will just add the S&H to purchase price of the item so the total price will be the same as before.

Example: Let's take a media seller who moves to "Free Shipping".

Right now they sell an item for $9.99 plus $5.95 for S&H when they offer "Free Shipping" the price of the item will be $15.94 and eBay will make an additional $0.50 plus the GMV counted for that item will grow almost 60%.
The customer pays exactly the same amount as before, the seller ends up having to pay an additional 50 cents to eBay. Add the additional postage charge coming mid-month for USPS and the seller just got hosed.

If Free Shipping takes off on the site as a way to increase sales velocity, this will put eBay's GMV numbers for the 2nd quarter in question. They could do the same number of sales as the month previous but increase their take rate, ASP and GMV. I hope investors won't be fooled by this.

Update: Here is a way to do a promotional S&H offer on eBay but I'm not sure it will show as Free Shipping in search. Thanks Cliff for the info.

Just my 12%

Free Shipping Moves You to the Top in eBay's Best Match

eBay's Best Match is now calculating S&H costs in the sort algorithm and for a perfect example of how its working go to the ultra-competitive Nintendo Wii search and you will see.

Free S&H is the direction eBay wants to go and they are putting their "Best Match" where their mouth is.

Of course if you have time to modify some of your current listings before they close (12 hours before closing) you might test a few to see how it works for you.

More on this later.

Update: If eBay had a shopping cart and could faciliate Free Shipping on orders over a specified amount like $50 then this would make sense. Until then ASPs will go up to cover adding the S&H to the purchase price and eBay will make more money in FVF and GMV will spike.

Just my 12%

The eBay "Dead Pool"

A few weeks ago I wrote about eBay cutting businesses and/or categories that are not measuring up, improving the CORE Marketplace business, or are more trouble then they are worth. It started with some simple closures like the Digital Delivery category, as well as Live Auctions.

I thought it would be fun to create a "Dead Pool" on those eBay businesses and or categories that were next on the chopping block.

Two new closures before we get started:

  • According to Tamebay.com, eBay Matchups is shutdown, with this announcement telling why: Thanks for using eBay Matchups over the past year and a half. It’s been a fun (and often wild) ride! Due to changing business climates, we’ve decided to let Matchups go to sleep for now while we pursue other exciting product ideas and community engagement programs. Not that there was much point to eBay Matchups in the first place.
  • The eBay Playground just vanished awhile back, without any fanfare. If someone knows when please email me.

So what eBay businesses or categories do you think are next? Here are some ideas to get us started:

  • eBay Express in the US - They have already shuttered the Express UK and Germany sites, so this seems a forgone conclusion. The only thing we do not know is when. I say it closes by the end of the year.
  • Half.com - They have never committed the resources needed to grow Half.com and have tried to close it in the past. If it wasn't for Text Book season twice a year (January and August) they would have closed it long ago. My guess is this August, will be the last text book season for Half.com.

    Once eBay goes to no or low insertion fees in the Media category they will shut down Half.com. I can't imagine they would be able to sell it.
  • Skype will be sold by the end of the year. Skype is certainly growing but its growth means little to the CORE eBay business.

Other Businesses on the Clock:

  • Stumbleupon - didn't cost much to acquire and is growing but still doesn't make sense for eBay, unless they can figure out how it will grow their nascent advertising business. Stumbleupon actually could make them some money in a sale.
  • Rent.com - Still can't figure out why eBay bought this business. Who would be a likely buyer for Rent.com?
  • Dealtime - The International version of Shopping.com. I just can't figure out why they would want to run two different brands. Why not use the Shopping.com brand globally.

Are there any other eBay businesses or categories that you think might get the axe? Tell me what they are and what your prediction is. Also, please comment on my suggestions and provide your time lines.

Friday, April 25, 2008

Stores in Search Part Deux!

Here we go again, it appears now that eBay feels they have control over search using Best Match, they are getting ready to re-introduce store items into search.

I first heard this from Ina Steiner's blog and she was referencing a post on the eBay stores board.

Here is the survey question the seller received:

Imagine that eBay updated its current eBay Stores product offering:

In the revised eBay Stores product offering, listings in the Store Inventory Format: Would be shown in Core eBay search results with Buy It Now items and Auction items. Would have lower Insertion Fees than Buy It Now listings depending on the eBay Store product to which you subscribe (see details in table below). Would have the same Final Value Fees as Buy It Now listings.

Imagine eBay made the explained changes to the Store Inventory listing format and also introduced (30 days, Good 'Til Cancelled) listing duration and ($0.30) Insertion Fee to the Buy It Now listing format.

Monthly subscription fee:

Basic Store $24.95 plus .10 store listings in core.
Premium Store $59.95 plus .05 store listings in core
Anchor Store $299.95 plus free store listings in core

In addition to these changes, imagine that eBay offered longer durations of 30 days and Good 'Til Canceled for all Buy It Now listings at no extra charge.

Taking into account these changes, would you consider continuing subscribing to one of the eBay Stores if eBay offered them at a reasonable subscription fee?

Now, IMO this is going to happen and they are just trying to fine-tune the details and I think this is a fantastic idea. Look for the large sellers to jump on Anchor Stores immediately.

I'm Baaaack!

I'm probably not going to write much today because I have lots of stuff to catch up on, but I'll be back to my normal posting schedule on Monday.

Just a few thoughts from the PeSA/ECMTA Summit in New Orleans:
  • There were nearly 500 attendees at the event -- a record for a PeSA/ECMTA event.
  • Microsoft offered attendees a $500 credit for use in their PPC program. I'm still waiting for the details.
  • I had a chance to meet Richard Brewer-Hay the new corporate blogger for eBay and he has a good post on the conference, at least the Keynote and Q&A session.
  • I also met Usher Lieberman from eBay PR and contrary to popular opinion he doesn't have three heads.
  • It was great to meet with the Amazon Services team and discuss FBA

I'll write more later this morning as soon as I get some confirmations from my buddies. There will be lots to write about next week and for the foreseeable future.

I've said it many times in the past, 2008 will be the year of the 3P Seller and the doors that will be opened for SMB (Small and Medium Sized Businesses) will be nothing short of phenomenal.

I would certainly suggest that if you are serious about your online business, it is time to hook-up with PeSA/ECMTA. This is an organization that is on the move.

Wednesday, April 23, 2008

More Notes From the Keynote

eBay Ink blogger Richard Brewer-Hay is here at the PeSA summit and covered the Keynote address by Lorrie Norrington. He does a great job of summarizing her comments.

I'll just add my 12%.

The message I am hearing coming from eBay is certainly different from years past. Here are some quotes from Lorrie's keynote address:
  • "Today, everyone at eBay recognizes that we have to fight hard each and every day to win your business because you – along with our buyers – are our customers."
  • "I’d like to make clear that to excite and engage our buyers, we also need to improve your experience – the seller experience and make eBay the best way for all sellers – small and large -- to reach buyers."
  • "But we know, that to continue winning your business, we have to make eBay a more attractive place for you to do business."

They are saying the right things, but will the actions meet the message. Look for some of the following initiatives to happen this year.

  • "Over the coming months we’ll be making more price changes that will improve the economics of selling on eBay. Expect to see more success-based pricing, category specific pricing and financial rewards for those sellers who are creating great buyer experiences."
  • "Sellers with strong DSR scores are going to fare very, very well on eBay. You will get better pricing, better visibility and an unmatched opportunity to reach customers and turn
    inventory to cash."
It is a forgone conclusion that eBay has decided that DSRs are the best way for them to measure seller performance and they seem very willing to reward high DSRs, so my suggestions to sellers out there -- find a way to improve your DSRs or start selling somewhere else. Low DSRs will not be treated well on eBay.

We will soon see if the action actually measures up to the talk.

Amazon Keeps Clicking Along!

I'm waiting for the earning transcript to look at the numbers in-depth but it looks like Amazon had another great quarter and may break the $20 billion revenue mark for the entire year.

According to ZDnet:

Amazon on Wednesday reported first quarter earnings of $143 million, or 34 cents a share, on revenue of $4.13 billion, up 37 percent from the year ago quarter. The company also increased its sales range for the second quarter and 2008.

According to Thomson Financial, Amazon (statement) was expected to report earnings of 32 cents a share on revenue of $4.08 billion.

Amazon’s outlook was also better than expected. Amazon projected second quarter sales between $3.87 billion and $4.07 billion compared to Wall Street estimates of $3.84 billion.

The company also said operating income is expected to be $120 million to $160 million, a wide range that indicates growth of 3 percent to 38 percent from the second quarter.

For 2008, Amazon projected sales between $19.1 billion and $20 billion compared to estimates of $19.3 billion. Operating income for the year is expected to be between $740 million and $940 million.

Here are some quick hits from the conference call:
  • Sellers using Fulfillment by Amazon grew by 50% Q/Q and I would like to take credit for generating most of the buzz about FBA :).
  • Inventory in the first quarter was $1.07 billion, down from $1.2 billion in the fourth quarter. I would think that investors would love this bit of information.
  • Something close to my heart: Media sales were $2.54 billion, up 28 percent Y/Y 28% growth in the media category it phenomenal if you ask me.

I'll have more info after I've had a chance to read the transcript.

More on the eBay craigslist Court Drama!

Here is craiglist's response to the suit filed by eBay yesterday.

"We are surprised and disappointed by Ebay’s unfounded allegations, which came to us out of the blue, without any attempt to engage in a dialogue with us.

Coming from a shareholder that views craigslist as a prime competitor, filing suit without so much as mentioning these assertions beforehand seems unethical, and hints at ulterior motives."


Apparently the founders and majority shareholders in craigslist (Craig Newmark and CEO Jim Buckmaster) feel something else is afoot. What could those ulterior motives be?

I would guess that eBay is not in the greatest negotiating position. As a minority shareholder in a private company, you really have no say at all. A good friend of mine once said; "If I own 51% of a company and you own 49% of the same company, I actually own 100% of the control"

So eBay doesn't have many options available to them to maximize the value of their stake in craigslist. All of this is speculation at this point because the details of the lawsuit are sealed.

Let's look at a scenario that possibly could have happened. Is it possible that the craigslist Board of Directors approved the sale of shares in the company to a third party at a price below market value, this would instantly dilute the value of eBay's share of the company.

eBay, could possibly just be trying to protect their investment without any ulterior motive whatsoever. Of course this lawsuit could also be the only card eBay has to play to get Craig and Jim to the negotiating table.

Update: After thinking this through a bit, it is more likely to be something like Talal brought up in the comments. It is possible that the board authorized additional shares to the founders or themselves and that would be a no-no without protecting the minority shareholders like eBay. Maybe eBay isn't the bad guy here.

Lots of fun speculating but since craigslist is a private company and the suit is sealed we won't figure out what happened until somebody spills the beans.

Quick Hits From the PeSA Conference - Keynote

eBay President of Marketplace Operations, Lorrie Norington spoke this morning about the changes happening at eBay and I thought I would just provide you some quick points that were made. I will add more color to these comments at a later point.

Quick Hits:
  • Newsflash! eBay announces that they consider sellers as customers. Sorry for the sarcasm, but one thing is clear that the messaging coming from eBay is that sellers count. Now all they have to do is prove it.
  • More fee changes on the way. Specifically category based pricing and lower insertion fees.
  • eBay management wants everyone to know, if you do not measure up to their seller standards, you probably should be selling elsewhere. At least they finally came out and said it. Key takeaway: If you want to make it work on eBay you will have to measure up.
  • 72% of S&H DSR's are 5's and the S&H DSR is the lowest of all 4 DSR's
  • 30% of Power Sellers qualified for the 15% discount over the last 30 days (as of the April 15th billing period)
  • It appears management is considering transparency with DSR's so that sellers will have the information they need to make the necessary changes. No announcement was made but they are looking into it, for whatever that is worth.
  • They didn't say it directly, but they mentioned that one major competitor has set the customer service bar very high. I wonder who that could be?
  • A year from now the site will have a much more retail look and feel. No details but here's my 12%. There will be PayPal only payments, Free Shipping incentives, perhaps a shopping cart finally.

I'm heading back to the event, but I will add more later. If you have any questions please post them in the comments section and I will do my best to answer them.

One more thing. I met the new Vice President of Seller Experience, Dinesh Lathi and he seems like a good guy. He is replacing Jim Ambach but I still haven't found out where Jim is ending up.

PeSA/ECMTA New Orleans - Day 2

I'm getting ready to listen to eBay Global Marketplace President, Lorrie Norrington's Keynote speech this morning -- I'm hoping there will be some big news.

One thing I noticed at the gathering last night was that eBay was no longer the sole marketplace for most of the sellers at the event. Most were growing their own websites and other venues and eBay was just becoming "another" channel.

Many sellers were hopeful that eBay could turn things around, but they aren't waiting around for that to happen.

I'll post throughout the day if there is something of interest.

Tuesday, April 22, 2008

What Did I Miss?

Well, I was traveling most of the day and then at a cocktail party most of the evening here at the PeSA event in New Orleans, it was good to catch up with old friends and also meet some new people.

One thing, I obviously missed while away, was the news that eBay had sued the founders of Craigslist for unilaterally diluting the value of their stake in the company.

The details are sketchy, but we all new something like this was going to happen. As soon as I get more information I will post about it.

A couple of quick hits from the PeSA event:
  • I was able to chat with Richard Brewer-Hay, the man behind the eBay Ink Blog and he seems like a good chap to me. I look forward to sitting down with him and having a longer conversation in the next couple of days.
  • The number I'm hearing regarding registrations at this years event is over 460 attendees, by far the largest group to ever attend a PeSA/ECMTA event. This is proof that 2008 is the Year of the 3P Merchant.

I'll try my best to post info from the event but it will most likely be hit or miss.

Remember that Amazon announces earnings tomorrow after the bell and will hold their conference call at 2:00 PST

Monday, April 21, 2008

I May Not Be Blogging Much This Week!

I am heading out tomorrow morning for the PeSA conference in New Orleans and will be there until Thursday evening. I will certainly not be blogging on my normal schedule, so be prepared for sporadic posts over the next few days.

I will most likely be using Twitter for quick bits of info from the conference so if you aren't following me on Twitter you might want to start.

If there is any big news coming from the conference I will be sure to post about it as soon as I can. I'm hoping to spend most of my time "working the room".

If you are interested in hearing what is happening this week in the UK at ChannelAdvisor's Catalyst event, please checkout Tamebay.com for updates.


Chris from Tamebay has already posted an interesting piece suggesting that eBay fill move to no listing fees sooner rather than later. I hope to get some more color on this at the PeSA conference.

Have a good week!
rks

It's Baaack! The Bay Estimator Returns!

That was fast! eBay has brought back the BayEstimator for eBay sellers, so get ready to check your listing titles and get an edge on best match. It looks like they have fixed the little loophole that caused eBay to shutdown the tool -- though management said that wasn't the reason.

Now if you use more that one keyword of value this warning comes up.

eBay Labs SpamEstimator - Keyword Spam Detected
If your valid title is being erroneously flagged as having keyword spam, please report in the Comments section. Include the title.

Conversely, if a title that should be detected as spam is not being flagged, please post that as well. This will help us look at algorithm improvements.


Have fun kids, but play nice!

Friday, April 18, 2008

How's Business?

Ina Steiner posted a question for sellers on her blog and I'm not trying to steal her thunder, but I thought I would ask the same question here.

Now that many of you have had a chance to look at your Q1 numbers, please use the comment section to tell me and my readers how you did. Ina will probably get most of her responses from eBay sellers, but I'd like to open it up to all online sellers.

If you have the data, please tell us how you did Q/Q and Y/Y and which marketplace is working the best for you? Please provide info on the category you sell in and if an eBay seller what your DSRs are and if you've made any changes to optimize your listings for Best Match.

Ina has about 5 comments so far, so make sure to check them out if you want any ideas how to present your numbers.

Thanks
rks

Amazon Experiences Glitches Also!

Some sellers are complaining that their seller funds are being held in reserve instead of being disbursed to their checking accounts. I checked my account and am not having any problems, but one seller who contacted me said that they have nearly $25,000 on hold at this time.

From time-to-time, Amazon holds funds so they can do a review of an account that has grown faster than normal, just a way of keeping problems from getting out of control. This does not appear to be the same type of hold.

Amazon is obviously aware of the problem because they posted this announcement in Seller Central.

Greetings from Amazon.com,

We are currently experiencing an issue in which some sellers' funds are being held in reserve in error. Impacted sellers will not be able to disburse funds until this issue is resolved.

Our engineers are actively engaged in restoring service and we will provide an update when the issue is resolved.


I've seen little glitches pop up every now and then with Amazon, but have found they are very responsive to support calls and generally resolve the problems in short order. Hopefully this issue will be resolved shortly.

It doesn't appear to be affecting too many people judging by the responses to the Seller Soapbox forum.

Just my 2 cents. (I'll be using this tagline for Amazon stories until it costs me more)

PayPal Only, Coming to an eBay Marketplace Near You!

Last week eBay announced they would make PayPal the sole payment option on the eBay Australia site and followed the announcement with additional "eBay Speak":

"eBay spokesperson Nichola Sharpe said the new policy applies only to eBay in Australia. "There are no plans to go to a PayPal-only model for eBay in the US and we haven't announced any other markets at this time."

Let me translate this message for you, "no plans" is "eBay speak" for we haven't made the decision yet while in reality they are modifying the site code as we speak to make PayPal the sole payment option on eBay.com.

Ms. Sharpe, also said "we haven't announced any other markets at this time." which implies that those announcements are forthcoming, so all this statement means is; other countries are coming and we will announce those as soon as they are ready. W are waiting to see what happens with the Australian site before we decide to turn this on in the US.

Now, I'm sure some of you will tell me to go put on my "tin hat" so that the eBay death ray doesn't melt my brain, but lets just look at this logically:
  • If eBay wants to make this option available in the US they will need to make changes to the eBay.com checkout code sooner rather than later. Making these changes right now, does not mean they have made the decision yet, so Ms. Sharpe's "no plans" comment is not really disingenuous, remember "no plans" just means they haven't decided.
  • Ina Steiner just posted on the AuctionBytes blog that sellers are seeing a "glitch" ("eBay Speak" for "new feature that shouldn't have surfaced yet") So apparently they are making changes to the code right now, just like they did when SDC (Shopping.com) listings showed up on eBay.com.

Look, I actually have no problem with them making business decisions that they feel are best for the marketplace, that is their right, but stop treating users like idiots. You've already launched PayPal only in Australia, which means you will seriously consider launching it in the US.

Ms. Sharpe, why not just say? "We want to see how this works in Australia before we roll it out to all markets" It would accomplish the same thing as the actual announcement did except you wouldn't reinforce the lack of trust users have in ebay management.

If this move is good for the eBay business then just lay out the reasons for the change, don't continue to hide behind "eBay Speak". We are all adults here, do you think the reaction will be worse or better when this launches in the US after you said you had “no plans”?

Just my 12%

Beating the Penny Sellers on Amazon!


I've written about this before, but I figured I would look at this more in-depth because many of you are frustrated with Amazon Sellers that list their items for 1 penny.
I buy quite a few media items at BuyBackDirect.com in the 5 to 10 cent range. Mostly because I know I will be able to move them on Amazon even though there is a lot of competition selling them at a penny. Here is what I've found after selling via Amazon FBA for the past 7 months:
  • I sell my penny type items for $2.98 and will always show up at the top of the list. The only ones who can beat me are other FBA sellers and right now there just isn't much competition on FBA -- of course if I keep writing about it that may change.

  • When I sell the item at $2.98 with a COG of 15 cents, I still get a GP of $0.90 on each item that I sell. If it took 12 months to sell it through FBA my GP would be $0.78 for a CD and $0.66 for a DVD -- Books are a different animal all together, though if you do the numbers you might be able to make it work.

    If I fulfilled the item myself and listed it for 1 penny I would only make about $0.40 cents on the sale. and still have to store it and ship it myself.
  • Buyers are wary of items priced at one penny because the perception is, it has no value, so why would I buy it. Many consumers also think they are getting taken advantage of somehow.

  • News Flash - Prime customers actually buy these items one at a time and get free 2 day shipping -- it is quite amazing. Most of my $2.98 items are purchased by Prime customers.

Remember that "perception is reality" for most consumers (just look at all of the problems eBay is having) if your item appears to have no value when listed at one penny, most consumers will move on to other options. Besides, I can actually make more money with less hassle selling the same item at $2.97 via FBA.

I'm sure at some point that the competition among FBA sellers will put pressure on this strategy, but I think it will be awhile. I only do it with DVD's and some CD's depending on sales rank so I think it will be awhile before there are many competitors for the same SKU's.

Just click on the image to enlarge.

Thursday, April 17, 2008

eBay Hacker and Folk Hero Vladuz Arrested!

eBay today publicly thanked the Romanian General Directorate for Combating Organized Crime (DGCCOA), in cooperation with the United States Secret Service and the Federal Bureau of Investigation for successfully arresting cyber-criminal Vladuz, who had attempted to defraud eBay users.

“We are delighted that Vladuz is in custody thanks to the hard work of Romanian law enforcement,” said eBay’s CISO Chief Information Security Officer, Dave Cullinane, “Their willingness to work closely with eBay and other global law enforcement agencies was instrumental in making this arrest. Having this alleged fraudster arrested demonstrates that eBay protects its community from criminals.”

Vladuz had become sort of an eBay Folk Hero, but in reality he is just another criminal and it is good news that he is behind bars.

Breaking News About BayEstimator!

It looks like eBay heard you regarding the BayEstimator tool and though there is not a definitive date for a relaunch I did get this info from PeSA/ECMTA today.
  1. eBay agrees that the title tool is a valuable resource for sellers and that they can understand the need for such a tool.
  2. They are working on re-releasing the title tool to the selling community but can't offer any time frames or expectations at this time.
  3. They want to develop the tool to be more “Commercial” grade and designed for mass-use. So when it does come back, expect a much simpler version of the tool to be released than the version we previously saw. Things like individual word relevancy will be hard to incorporate in the new version of the tool. But identifying which words are good and which are bad is more in line with what to expect.
  4. They hope to have additional information available at the eCommerce Summit in New Orleans. (You can still sign-up for the conference)

I'll provide more information as soon as I get it. A special thanks to PeSA/ECMTA and keeping me in the loop.

Just my 12%

A Prescription for eBay Sellers and Bloggers


Just click on the image to enlarge.

Back to Your Regularly Scheduled eBay Complaining!

Now that I have that positive post about eBay out of the way, I thought I would write about what concerns me most about the current state of eBay.

It is all about Active Users: (According to the Q1 Earnings call)
  • Active Users grew 1% Y/Y to 83.9 million. eBay said that if you exclude China and Taiwan that number grew by 6% (of course, since they don't tell us how many active users are in China and Taiwan that percentage is basically meaningless, they could say it was 30% and we couldn't dispute it.) BTW, when did they start excluding China and Taiwan. The Annual report says:

    Active users are defined as: "All users, excluding users of Half.com, StubHub and Internet Auction Co., our Korean subsidiary, who bid on, bought, or listed an item within the previous 12-month period. Users may register more than once and as a result, may have more than one account."
  • According to The Street.com, "Though first-quarter profit jumped 22%, growth in active users was almost flat and the number of the new listings was up just 4% from the previous quarter.

    eBay's much publicized tweaks recently to its platform to make it more attractive to buyers aren't paying off, and analysts say the company's weak fundamentals in a slow economy pose greater risk than ever to investors.

    eBay's pain could get worse. As it struggles to jump start demand, the company's sellers and shareholders are only likely to get squeezed more, analysts say. "

  • eBay Management is now concentrating on re-energising their customer base by using coupons to stimulate activity. Why pay $150 to acquire a new user when you can pay $50 to get an active user to spend more money on the site? The approach does make sense if you go after the 120 million or so non-active eBay accounts to try and re-engage them.

I believe they need to spend money on TV, in an effort to change the perception of the eBay brand and encourage new active users, but that approach is too costly in the short-term. So instead, eBay does what they do best, they manage the cash cow as best they can until the other businesses; PayPal, Skype; StubHub, Advertising, Classifieds, etc. can replace what they may lose in the Marketplace biz.

IMO, there is plenty of additional growth in the eBay Marketplace business, but eBay doesn't seem to have the stomach to go after it.

Amazon on the other hand continues to outpace ecommerce and grow faster than eBay. Amazon doesn't need to spend any money on TV because their brand is already well respected and valuable to consumers.

Coupon programs will help in the short-term, but it isn't a long-term solution. eBay needs to bite the bullet and change the perception of their brand. TV is the best way to do this, but not with another campaing like "Shop Victoriously". Once they figure out what they want to be when they grow-up, they need to launch a re-branding campaign to make eBay the place to shop once again.

I'll say this again, they need to stop trying to figure out how to make auctions work in harmony with Fixed Price items, create "eBay Classic" and run it as a separate platform . Then they can run a TV ad campaign to establish the new brand for the "New" eBay and please do not repeat the same "Get it New" campaign they trotted out for Express when it launched.

Just my 12%

3P Sellers, Amazon Wants Your Input

I saw this link over at Max's AmazonStrategies blog.

"Amazon is continually working to improve your selling experience. To do this, we need to know more about you, your business, and how you use the Amazon.com Marketplace.

Please take the survey below and share your motivations for selling on Amazon.com as well as anecdotes about your selling experiences.

Take the Survey here

eBay Q1 Earnings - The Morning After.

Wow, they sure can make money -- Q1 profit grew 22% Y/Y to $460 Million, so everything must be just clicking along, right?

I figured I would write a positive post about eBay for a change. We all know what is not working so I figured I would write about what I see that is working -- don't start calling me a cheerleader.

Here is what we know is working: ("Growth was once again propelled by PayPal and in particular merchant services, Skype, classifieds, and advertising." source Seeking Alpha Earnings Call transcript)
  • PayPal - PayPal is the crown jewel of the eBay empire and continues to grow. It is the single best acquisition eBay ever made. (BTW, it was pretty much forced on them by their users and they paid more than they should have by waiting.)
  • StubHub - Second best acquisition after PayPal and I still don't know why they aren't expanding this business globally. StubHub is the main reason eBay's Marketplace numbers weren't actually in the toilet. (Best $300 Million ever spent by eBay)
  • Classifieds - Another acquisition that is thriving and will continue to add value to eBay.com 3P Merchants should find ways to utilize classifieds in their marketing plans.
  • Advertising - 150% revenue growth Y/Y and by far the most profitable business segment on eBay, the only cost for this business is the team that manages it.

    BTW, this is a partnership arrangement with Yahoo (US and Canada) and Google (internationally). Imagine if eBay owned their own sponsored ad business, they wouldn't need to split the money with their partners.

    Seeing as the Affiliate program was just moved in-house and eBay now thinks of themselves as a search company (Finding 2.0 and Best Match), how long do you think it will be before they start serving up their own sponsored ads.

    Amazon, does this currently with ClickRiver. My guess is that eBay will either acquire a company in this field or bring it in-house. It makes sense to me and is what I would be working on.
  • Skype - While Skype still looks like an odd business for eBay to be in, it is growing and making some money. My feeling on this though, is that the improved performance of Skype will just allow for a higher price when eBay sells it later this year. They may actually be able to make some money on the deal. (Of course, this is another acquisition)
  • Category Based Pricing - So far, this is the most beneficial change in the marketplace business and I would look for a rapid number of fee changes in other categories as the year progresses.

    Media sellers have been asking for category specific pricing since 2004 (I sure did) and it took a new management team to actually make this happen. IMO, this is the single most important change eBay has made and it reflects in the numbers.

    Listings were up 10% Y/Y and this was attributed to media and apparel. When you think about it. The category specific pricing brought back the media selection that had left and free gallery really helped out Apparel

If eBay can move aggressively with their category specific initiatives, they may be able to turn the corner.

As you can see the businesses that are thriving and growing are not businesses that were created in-house, so if eBay wants to keep growing my suggestion is to keep buying.

Okay, they still have some very serious issues like stagnant Active User growth, slowing GMV etc. and I certainly have some ideas on how to improve these metrics but that will be for another day.

Just my 6% (I gave you the other 6% yesterday)

Wednesday, April 16, 2008

Quick Hits From The eBay Earnings Call!

I want to wait until I get a chance to read the earnings call transcript before I give you most of my 12% but I do have a few quick hits:
  • PayPal is getting great traction outside of eBay and Google Checkout doesn't appear to be slowing them down any. PayPal grew revenue 17% on eBay and 61% off-eBay.

    PayPal is eBay's Rock Star, but how long can that last? What happens when a real competitor gets into this game? With PayPal growth on eBay slowing, what happens when a real competitor enters the game and starts to make in-roads against eBay in the off-eBay world? Google Checkout sure hasn't measured up.
  • Skype won't last the year as an eBay company. You heard it here first, Skype will be sold before the end of 2008.
  • Active Users grew by 1%, basically eBay is losing nearly as many active users as they are gaining and with the cost to gain new users growing, this metric will soon be a major problem for eBay.

There are quite a few other things I would like to discuss but I want to review the transcript before I write about them in-depth. Stay-tuned more to come.

Just my 6% (my other 6% will come tomorrow)

eBay Making Cuts! Not Jobs, but Businesses!

With the first earnings call under the guidance of new eBay CEO John Donahoe now in the bag, I thought I would take a look at some recent eBay news that may signal some business changes coming down the pike.

It makes sense that a new management team would move aggressively to re-organize the business in their own image. It appears they are looking at each business and even individual categories within the marketplace business and making one of four assessments: (Some businesses may fall into multiple categories)

  • Grow it! - I don't see too many of eBay's businesses in this category except for PayPal and Skype. Skype is only included because if it doesn't grow substantially the only other option is to sell it.

    Kijiji and the classifieds business could certainly fall into this category, as would the Non-GMV advertising business (excluding Shopping.com)

    StubHub should be in this category but I just don't see eBay expanding that business and they should be. Stubhub, is the best acquisition since PayPal.
  • Maintain it! - My guess is, we won't know which businesses or verticals will be left alone until all of them have been looked at, so the businesses and verticals to survive the re-org intact, may not be known for awhile.

    Some businesses and categories that should be fine are: StubHub, possibly Rent.com and Half.com -- they are both low maintenance money makers. StumbleUpon could also fall into this category -- I don't see management spending the money to grow it.

    eBay Stores, Pro-Stores, Motors, Express and many of the categories within the Marketplace business could also be left alone. Some categories are doing just fine within eBay.com or it just wouldn't make any sense to spend the money on them e.g. Express.

    Also, Microplace and Giving Works should continue as they have been.
  • Reorganise It! - The media category, was the first category to get this treatment and I'm sure the changes there are not complete. I believe, managers are doing an assessment of every category available in the Marketplace business; as well as every business in the entire company.

    Look for big changes at Shopping.com as they try to stoke the fire there. Though a possible add slowdown may add to slowing growth at SDC.
  • Sell It! or Shut It! - I believe Skype will actually be sold before the end of the year. It is a fast growing business that is much better suited as part of another company, IMO.

    Update: Looks like I may be right about this one.

    Digital Downloads and Live Auctions were categories that were just too much trouble for what they were worth so management said b'bye. Perhaps other categories will get the axe as well.

One business that is currently in limbo is the Auction biz.

eBay CFO, Bob Swan said in a recent interview with eBay Blogger Richard Brewer-Hay "we do see that fixed price continues to grow faster than our auction-based platform"

So, if fixed price is outpacing auctions where does that leave the auction biz? There's an old saying "if you don't grow, you die". Is this what will happen to Auctions at eBay?

It is going to be a very interesting year and I'm sure we will see movement of some of these eBay categories and businesses into different categories, from where I placed them. It would be my preference that many of them move into the Grow It! category.

Perhaps we should create a "dead pool" for the next eBay business or category to get the axe.

Just my 12%

eBay Q1 Earnings Announced Today.

Don't forget, eBay announces First Quarter 2008 Earnings today at 2:00 PM PST.

Here is what analysts are saying prior to the call:
  • Tim Boyd, American Technology Research: He expects a beat-and-raise quarter. Boyd sees Q1 revenue of $2.1 billion and EPS of 40 cents versus the Street at $2.06 billion and 39 cents. He sees gross merchandise value increasing 15% year-over-year, up from 12% in Q4. He says checks find an acceleration in U.S. GMV, which is says is “key.” On the other hand, he warns that for the stock to extend its recent rally, you will need to see a beat and raise quarter; re-acceleration in GMV growth; and a sequential rise in active users.
  • Aaron Kessler, Piper Jaffray: Kessler today raised his Q1 estimates to $2.16 billion and 42 cents from $2.06 billion and 40 cents. His ‘08 EPS estimate goes to $1.75 from $1.67. For ‘09, he’s now at $2, up from $1.88. He also raised his price target to $40 from $34. Kessler raised his estimate on growth in the core eBay marketplace to 17% in Q1, from 11.5%. He also raised his expectations for PayPal to $526 million from $511 million. His Skype estimate rises to $126 million from $119 million.
  • Youssef Squali, Jefferies: He expects $2.11 million in revenue and 39 cents for Q1. “We expect eBay to report solid Q1 results, benefiting from robust listings growth on Marketplaces and continued strength in payments and other non-GMV businesses,” he writes.
  • Merrill Lynch: Online auctioneering firm eBay was upgraded to buy from neutral on Merrill Lynch. The broker cited three reasons: estimate upside compared to a conservative 2008 outlook, new management and change mentality, and the potential for accelerating gross merchandise value.
  • James Mitchell, Goldman Sachs: lifted its price target to $35 from $33 - implying growth of 17 percent over its Monday closing price of $29.84. Mitchell also raised his earnings-per-share estimates for 2008 through 2010.

It's going to be interesting.

Tuesday, April 15, 2008

My Blog Utopia Stats! Q1 Report

I would have used "Q1 Earnings Report" in the title except there really aren't any earnings from MyBlogUtopia directly, though the activity surrounding the blog is earning me more money each month.

I am very happy to report that I am almost generating enough income from the activity attributed to My Blog Utopia to make this a living -- almost. I had originally felt it would take up to two full years and I am now officially in my 18th month as a blogger.

So here are My Blog Utopia stats for Q1 of 2007:
  • 18,359 visits.
  • 27,821 page views
  • 1.52 pages per visit (I actually think this is pretty good since I always have my most current posts on the same page.)
  • 02:20 Avg. time per visit. (This stat is deceptive since RSS readers only count as 1 sec per visit unless they click to the blog and the majority of my visits are via RSS)
  • How visitors come to My Blog Utopia
    Search Engines 6,673 (36.35%)
    Referring Sites 6,603 (35.97%)
    Direct Traffic 5,080 (27.67%)
    Other 3 (0.02%)
  • 53.19% of visitors visited more than 2 times during the quarter.
  • RSS Subscribers (At the end of the Quarter) - 224 active subscribers (800 avg. daily views, 273 clicks)
  • The Top 6 Referring Networks (See if you recognize yours)
    #1 - Road Runner
    #2 - Comcast
    #3 - Verizon Internet
    #4 - eBay, Inc.
    #5 - BellSouth Net
    #6 - Amazon

My Top Three Posts.

  1. 2008/01/ebay-sellers-already-gaming-best-match.html
  2. /2008/01/amazon-webstore-vs-ebay-store.html
  3. /2008/01/free-trial-on-amazon-webstore.html

Additional Stats: Current Alexa Ranking - 659,312 (I'm just happy to be down to 6 figures)

Update: Alexa just reconfigured their stats and MyBlogUtopia moved up a bunch to 427,216, still quite a ways to go, to get in the top 100K, but that is my goal

Thanks to everybody who's stopped by the blog or subscribed via RSS. I really do appreciate it.

Just my 12%

More on the Best Match Hack!

In case you haven't heard yet, Best Match was hacked by sellers using duplicate valuable keywords to increase their listing weight in Best Match. The following title is used most often to describe the "hack": New New New New WII 5 5 5 5 5.

Common sense would suggest that this loophole in the program would have been one of the first items fixed before launched and according to item #7 in the instructions for the BayEstimator tool it was: "Remember, excessive use of any keyword by a large number of sellers will automatically act to reduce its desirability/distinguishability on eBay."

So what went wrong? How was this "hack" possible? What will be the next "hack?

Follow Me on Twitter!

I created a Twitter account last year, but really didn't use it much -- I wasn't quite sure of the benefit. Well, I'm still not quite sure of the benefit but I am having fun with it.

I've decided to use Twitter for quick news posts that I don't think need my 12% added to them or things that I notice when I'm out in the real world. The jury is still out on the value of this type of communication but why not follow me and see what comes of it.

You can follow me on Twitter at http://twitter.com/rksmythe. I've also added my two most recent Tweats to the right sidebar of My Blog Utopia.

Also, since I'm talking about social networking please visit my Facebook profile, my Squidoo Profile and my LinkedIn profile and add me as a friend /contact.

Update: I forgot to add Friend Feed. You can follow me on FriendFeed also.

Best Match Running Again at Full Steam!

It looks like eBay has turned the Keyword relevancy part of Best Match back on and I'm sure they fixed the mulitiple keyword loophole. Now, how long will it be before a new "hack" is found?

This coincides with the closure of the BayEstimator tool that allowed sellers to optimize their Title Keywords. Ina Steiner has a nice post about this at Auctionbytes.

Also, if you get a chance, go visit Scot Wingo's blog and read the interview with new eBay Folk Hero "BMX".

BMX, is a loyal reader of MyBlogUtopia and gives a very nice interview for Scot about Best Match.

Monday, April 14, 2008

Word Association - eBay!

I thought this might be a fun little thing to try -- hopefully you will also.

I wanted to try a little MyBlogUtopia word association on two brands that are part of just about every online sellers universe. I would like you as readers to post the first thing that comes to mind when you hear the name: (please be honest and write the first thing that comes to mind)

eBay

Update: Thanks for the participation, even you Anonymous. Sarcasm will get you nowhere :)

Word Association - Amazon!

I thought this might be a fun little thing to try -- hopefully you will also.

I wanted to try a little MyBlogUtopia word association on two brands that are part of just about every online sellers universe. I would like you as readers to post the first thing that comes to mind when you hear the name: (please be honest and write the first thing that comes to mind)

Amazon

Buy.com is Selling on eBay!

I just came across an interesting little tidbit that I thought I would share with all of you. It looks like online ecommerce site and recently launched 3P marketplace, Buy.com has been selling on eBay for awhile --there user idea is of course "buy" and their store id is Buy's Internet Superstore

According to their feedback numbers, it looks as if they have really only sold aggressively for the last 6 months; even though the user ID has been in effect for 6 years.

They seem to be offering "free shipping" on most of their items and their DSRs and Feedback are very respectable. A quick check of Terapeak shows they are also doing a nice bit of business as well.

I find it very interesting that an eBay competitor would choose to sell their product on eBay, but heh, there is a "New World Order" on eBay these days. Is this the wave of the future? How long before we see the big box retailers like WalMart joining in?

In the past the economics and rules kept the big retailers off of eBay but it appears to be working for Buy.com, so my guess is others will follow. Amazon has opened there doors to large retailers so it looks like eBay is following the same path.

Just my 12%

Don't Miss the PeSA / ECMTA Summit in New Orleans.

The PeSA / ECMTA Summit begins a week from tomorrow in New Orleans and there is still time to register. I will be attending and I would love to meet with my you while there.

If you are planning on attending, please email me at rksmythe at yahoo to let me know and I'll set aside some time to meet up with you.

I anticipate a very interesting conference and believe it would be well worth the investment to attend. The list of sponsors alone is reason enough for me.

I look forward to meeting you in New Orleans.

Best Match in Retreat!

Scot Wingo posted about eBay sellers "hacking" Best Match last Friday and shortly after that post, eBay's Best Match search results were once again sorted by "ending soonest".

As of this morning, it looks like some of the Best Match sorting has returned, but not keyword relevance. "Ending soonest" seems to have the most weight in the sorting algorithm. I'm sure they are working on a fix for the "hack" and will be restoring "Keyword Relevance" shortly.

As I said in an earlier post, sellers are always looking for an advantage, so this will not be the last time they "hack" Best Match. I'll keep you posted with more information as I get it.

Just my 12%

Sunday, April 13, 2008

Feedback Changes at Amazon!

On April 8th, Amazon resumed testing a new "Leave seller feedback" page. The test is set up so that only half of Amazon customers will see the new version of the feedback page.

Here are some of the specific changes:

  • Amazon will begin collecting buyer feedback on orders that are cancelled before shipment is confirmed.

    Now that sellers have the ability to charge when items are shipped, Amazon will allow customers to leave feedback if an item is cancelled before payment. This could not be accomplished with the old feedback page.
  • Expected delivery dates are displayed more prominently. The message "If your order hasn't arrived yet, please note that it's still before the delivery estimate" is highlighted when appropriate.
  • The comments box is now below the optional questions, so buyers will be more likely to notice the questions before they leave a comment.

  • Buyers can get to the feedback page with only one click after logging in.

  • All feedback-eligible orders are visible on one page. Buyers can leave feedback on as many orders as they want without having to leave the page.

Well, something changed for the better, because I'm getting a lot more feedback on my orders since this change and that is a good thing. Traditionally on Amazon you get a much smaller percentage of customers who leave feedback which means even one negative or neutral can really affect your feedback score. I welcome any change that encourages more feedback.

UPDATE: For Q1 of 08 my percentage of customers who left feedback was 6%, a far cry from the 70% of eBay customers thhat left feedback when I was selling. Since Amazon began running the test on their feedback page that percentage has grown to 18%.

Friday, April 11, 2008

The Game is On! eBay Sellers Game Best Match!

As Scot Wingo points out in his post yesterday, " ... it only took about a month, but now we're hearing from sellers that are upset that other sellers are significantly gaming the system."

Scott goes into great detail on how this gaming is being accomplished in his post and I would suggest you read it. I'm just going to discuss the concept of "gaming" in this post.

First off, it was clear from the beginning, that sellers would try to find a way to take advantage of eBay's Best Match. We call this "gaming" which is a nicer term than calling it "cheating". Sellers have been doing it forever.
  • Lowest price is the sort order with SIF listings so sellers go for 1 cent BIN with $25 S&H
  • Determining when you want to end a listing, in order to give your item the best opportunity for a sale is "gaming" the system.
  • When ending soonest was the sort order, sellers use the "extender" program (since banned) to keep their items on the front page.
  • Multiple IDs and multiple stores are a form of "gaming".
  • Now with Best Match, sellers add multiple keywords to their titles to get advantage in search. Now the following listing title: New, New, New, New, New, Wii, 5, 5, 5, 5 New New, carries more weight than New Nintendo Wii with 5 Game Bundle. Just try this search on eBay and you will see what I mean.

In a competitive environment, gaming the system is what every sellers does. Every seller is trying to find a way to get in the "buy box" and stay there, until they get a sale. Most "gaming" strategies aren't as blatant as the one Scot discusses though. Why are some called cheating and others accepted? Its all perception.

If you time your listings so they will end when the most buyers are on the site that is just called being smart, but if you add 5 "New's" to your title that is called cheating.

eBay isn't a Utopian society where everybody does the right thing. When it comes to making money, sellers will do what it takes.

It amazes me, that with all of the brainpower behind "Best Match" they couldn't think this particular problem through before they launched.

If eBay corrects the Best Match Algorithm to fix this particular problem, sellers will come up with a new way to "game" the system -- it is what they do and it becomes almost a sport for them. When there is so much competition for the same items you have to find a way to have your item stand out.

Update: It appears that Best Match is in the shop for repairs. After the problem with repeated keywords was identified they apparently have shutdown Best Match until that problem is fixed. The default sort still says Best Match but every search I've done sorts items by ending soonest. I'll post any additional info that I hear.

This will not be the last time we hear about "gaming" eBay search results, unless you can find a way to remove the human desire to "win".

Buyers "game" the system just as much as sellers do. Hell, it isn't much different than sniping an auction.

So how do we fix this?

  1. Use the Google model. Free, organic listings and have sellers pay for position.
  2. Go back to "Ending Soonest" and just sort items by Best Match within that same 30 minute window.
  3. Understand that sellers will "game" the system and just wait until eBay closes the loophole. That is pretty much what we have today.

What do you think? I'd love to hear your opinions. I like option #2.

That's just my 12%