Wednesday, July 30, 2008

PayPal Responds to Amazon Threat!

Okay, its just a little promo that was planned way in advance and has nothing to do with the news yesterday about Amazon Checkout, but it is pretty funny about the timing.

I found out about it from the BrewsNews blog. Here are the details on the PayPal Promo:

Exclusive Pricing Offer

For a limited time, we're offering a new pricing structure that could save you up to 34% on PayPal fees for the next 12 months.

Compare rates:

Receiving fees
Current rate - 2.9% + $0.30
New rate - 1.9% + $0.30

Transfers to bank account
Current rate - 0%
New rate - 1%

PayPal Debit Card*
*Only applies to customers with a PayPal Debit Card
Current Rate - 1% cash back
New rate - No cash back

If you receive $10,000 a month, you could save $1,200 in one year by keeping the money in your PayPal account or using it to shop or send money.

So lets take a look at this deal, if you pull your money out you have to pay 1% to tansfer it to your account, so basically there is no benefit to the new rate. Also, you lose the cash back benefit of the debit card. The only people who benefit from this deal are low volume sellers who keep their money in PayPal.

High volume PayPal users already get the 1.9% rate.

Does this deal make any sense to you guys?


Just my 12%

Competitive Concerns with Amazon Payments

With yesterday's launch of Checkout by Amazon and Amazon Simple Pay, several reporters, bloggers and analysts have commented on their concerns that Amazon would use payment transaction data to identify the top selling product and then source it directly, eventually cutting out their 3P partners. Scot Wingo had this to say;

"Amazon's biggest weakness in general in the world of ecommerce technology like this is that they are trying to be both a technology provider to retailers and a competitor. Large retailers (TRU, Borders, etc.) have left Amazon's third party business en masse because of this and I don't imagine they will be jumping for joy to add Amazon's checkout to their sites. For example, you won't be seeing Wal-mart.com add this any day soon. This actually plays to PayPal and Google's advantage and I'm sure as a first response we'll see them play up these fears: "Do you REALLY want Amazon seeing all of your transactions, learning about your top sellers and then using that data to compete with you?" The fact that Amazon
has a well [documented] history of using partner data to their advantage in
the third-party selling world will make this argument very believable."
This is certainly a concern and there appears to be some historical evidence for the argument, but from what I have observed, and heard directly from Amazon employees, they have systems in place to keep the retail side of the business separate from the marketplace business. I'm not saying that it doesn't happen, but they've assured me that they have systems in place to limit the problems. So, it would be the ethical and intelligent choice for them to follow the same approach with payments. I am not naive enough to believe it couldn't happen, but I wouldn't be concerned unless I was one of the top 100 online retailers, who compete directly with Amazon.

It wouldn't make sense for companies like Zappos, Best Buy, JC Penny, etc. to accept Amazon payments without contractual protection against such practices and smaller retailers don't need to sign-up unless the contract provides similar protection.

So once this barrier is removed, what would stop them from offering Amazon payments as an option for their customers? Amazon has over 81 million active users who buy a lot of product; what are their options for getting access to those customers?
  • They can sell on the Amazon platform, which is very restrictive and does not allow them to market directly to those customers.
  • They can use Product Ads on Amazon to acquire those customers
  • They can advertise using Amazon's package insert program or other advertising programs.

But, if they do any or all of these things and don't accept Amazon payments, that adds friction to converting those customers into sales and nobody wants to add friction to that process.

Hey, Amazon has enough faith in the their own customers to offer this service to competitors. I have an Amazon account and I would choose Amazon payments over any other payment method if I bought from Zappos, Best Buy or any other online retailer because of the A-to-Z guarantee and the 1-Click convenience, but it wouldn't stop me from continuing to buy from Amazon.

Scot also had some additional "cons" to adopting Amazon payments:
Fees - The fees are pretty standard, if not on the high side. I was hoping we'd
see something bold like ACH for a nickel or something like that. As-is
they are kind of 'yawn'. It could be that this is initial pricing and maybe by the holidays they will run some special pricing. It could be they are also looking to understand the fraud models.

I thought the fees would be lower, but it is harder to raise prices than it is to lower them, so I can see why they did this initially. Perhaps, as Scot said, they are trying to gauge the fraud models and since they are offering the A-to-Z guarantee without controlling the entire shopping experience, this fee structure was more reasonable -- BTW, for orders under $10 they are less expensive than PayPal. My thinking is that in the future rather than lowering prices they will work toward adding value, perhaps running promos for Product Ads, discounts on Basic FBA rates for purchases made through Checkout, etc.

Certainly, eBay will not authorize Amazon payments as an acceptable payment method on eBay properties, but they won't be able to use the silly "not a safe payment method" argument they used with Google Checkout. Heck maybe they can use Amazon payment on StubHub, they haven't figure out how to add PayPal yet :)

I think this is a very interesting development and as Amazon gets more experience in this space they will have so many more options available to them than PayPal does. (Bill Me Later, Prime, FBA, Product Ads, WebStore, etc.)

If the biggest downside to accepting Amazon Payments is the fear they will take your transaction data and use it against you, that is not a problem without a solution -- Read the contract before you sign it.

Just my 12%

Tuesday, July 29, 2008

Twitter as a News Source!

For those of you who don't get Twitter, this morning was a perfect example of its value as a news source. This morning during a 5.4 earthquake in Southern California, twitter beat the Associated Press to the news.

According to the LA Times and the Twitter blog as spoon as the earthquake hit Twitter was a flutter of activity commenting about the earthquake. I was sitting at a local In&Out franchise when the earthquake hit and as soon as things settled down I was tweeting a way.

I use it as a source for info on stories that I am covering as well as keeping up with friends and readers. Right now I am following 109 different accounts and being followed by 208.

Sure, sometimes the conversation is a little mundane, but I get enough good information to make it worthwhile. It is an ideal tool for anybody who does business online, especially bloggers.

So, if you want to take the plunge follow me on Twitter. It make take some time to get used to it but when that next earthquake hits you will be glad.

Just my 12%

Amazon Increases Technical Phone Support Hours!

From the Amazon Seller Central Announcement board:

Contacting Technical Support by Phone

In order to provide improved service, on August 11 we will increase our Mon-Fri phone support hours from 9am-8pm CST to 7am-8pm CST. Weekend hours will remain 9:30am-6:30pm CST. Calls are toll-free and must be initiated using our online click-to-call feature. E-mail support is available 24x7.

Just keeping you up-to-date. BTW, any seller can take advantage of Amazon's Technical Support, using their Click-to-call feature.


Just my 12%

In a Perfect World: Amazon and eBay Working Together!

Hey, the title of this blog has Utopia in it, so don't give me a hard time about the title of this post.

I was just thinking that with the launch of Amazon Checkout and the use of Amazon's FBA fulfillment services, I could now offer that World Class buyer experience to eBay's customers.

In a perfect world; eBay would allow Amazon Checkout on the eBay.com site and I could offer my eBay customers both Amazon's A-to-Z guarantee as well as the World Class fulfilment services of Amazon's FBA (Fulfillment by Amazon)

Wouldn't that be an ideal way to improve the buyer experience on eBay :)

Just my 12%

Amazon Launches Merchant Payment Service

Well, it is now official, Amazon has launched two new payment services for merchants at their revamped Amazon Payments website:
  • Amazon Simple Pay - Amazon Simple Pay is a set of payment-only products that allow your customers to use payment information from their Amazon.com account as a payment method on your website.
  • Checkout by Amazon - Checkout By Amazon is a complete checkout solution that leverages Amazon's e-commerce capabilities and offers your customers a familiar, trusted experience.

Both of these new services enable merchants to accept Amazon payments on their website and provide for world class fraud protection and consumer protection with the Amazon A-to-Z guarantee.

Amazon's new services also work seamlessly with Amazon FBA: "Checkout by Amazon combined with Fulfillment by Amazon (FBA) enables you to outsource both transaction processing and fulfillment."

The fee structure is similar to PayPal and both checkout services offer website owners access to Amazon's over 80 million active user accounts. Merchants can now offer Amazon payments on their website as an additional payment option or a complete integrated solution.

Now, I wonder if eBay will allow Amazon Payments on eBay.com :) It really can't be argued that Amazon Payments is un-safe.

Update: In my desire to be the first blogger to post about Amazon Checkout, I didn't go in-depth on the analysis, but Scot Wingo has done a good job giving his 12%

Just my 12%

Monday, July 28, 2008

Check Your eBay Traffic Reports!

I've been hearing that traffic from Microsoft's Live Search has been rising as a referrer for eBay Store sellers, in some case's moving up just behind Google in traffic. I just wanted to ask guys if you are seeing the same thing.

Live, recently launched "Cashback" through their search engine, so it would make sense that traffic would be up, but the big question would be; are sales up? The searcher only gets "CashBack" after a purchase, but can earn up to 25% on some eBay purchases.

It would be interesting to test the traffic coming from Live, by identifying a few items in your store inventory to fine-tune for CashBack search and then tracking the conversion of those items. I'm not sure if Omniture provides that capability though.

To conduct this test, go to Live's Cashback site and search on your items. Check out how you compare with the other merchants and optimise your listing to be very competitive, then track you sales of those items. You will also want to run the test where your items are priced fairly but still within the top 3 or 4 listings, to see what the price threshold is.

Remember eBay is paying those buyers to buy your item so why not give it a try.

If you can, please let me know how the test worked.

Just my 12%

Friday, July 25, 2008

Video Help for Sellers on Amazon.

Amazon has launched a video tutorial section on listing and selling through Amazon. It is available in your Amazon Seller Central account.

There are multiple videos on several different topics:
  • Set UpYour Account
  • ListInventory
  • ShipItems
  • IncreaseSales
  • DesignYourStore

You may not be able to view these unless your are logged into your Seller Central account.

Just my 12%

Unlocking the Mysteries of Amazon Prime!

During Amazon's recent Q2 earnings call, the following question was asked and then answered by Jeff Bezos:

Jeffrey Lindsay - Sanford C. Bernstein

What is the impact on your delivery and fulfillment charges particularly with regard to Prime, of increased transportation costs, is this really a 2009 phenomenon for you or is there a possible increase in delivery cost coming through the pipeline? And then could you just give us a comment on how you’re seeing any impact from consumer confidence on sales, product mix, sales frequency, smaller ticket items, are you seeing any difference now that consumer confidence is significantly lower?

Jeffrey Bezos
On the fuel prices we suspect that higher fuel prices may be a relative advantage for us both in terms of relative to physical world stores because of the expense of driving to a store, even just driving 10 miles these days is a few dollars worth of gasoline and consumers we suspect are beginning to take that into account and think about that and try to do trip consolidation and so certainly our free shipping offers and Amazon Prime become very high, a clearly of even more value to customers under that set of circumstances.

And then relative to other online retailers because of our scale we have a distributed fulfillment center network that places products closer to customers that allows us to do fast transportation to customers, fast deliveries to customers but usually using ground transportation instead of air transportation and ground transportation is much more fuel efficient then air transportation. So probably this is a relative advantage for Amazon and its our job to insulate customers since we offer free shipping and Amazon Prime offers fast free shipping, the burden is upon us to make sure that we can do that in a way that is economical for us so that customers can continue to enjoy those free shipping offers and we have clearly no intention of changing those. We’ll keep them in place.

Okay, since Mr. Bezos won't explain the intricacies of Amazon Prime and Super Saver shipping, I will. First a little background on how I know this stuff.

I sold for many years on eBay as Glacier Bay DVD and I am intimately aquainted with the systems in place and the costs associated with shipping product; I currently sell on Amazon using FBA (Fulfillment by Amazon) and I've studied how Amazon Prime works both as a seller and a customer.

I have no inside information and what follows is strictly my analysis of their service based on logic, research, observation and public statements. (No metrics were harmed in the making of this blog post).

How does Amazon make Prime and Super-Saver shipping work?
  • Customers pay $79 a year for a Prime membership which gives them free 2-day shipping and $3.99 next day shipping on eligible items. Super-Saver shipping is free standard shipping for orders of $25 or more.

    Prime customers order more frequently and Super-Saver customers purchase more items per order, both positives for an on-line retailer.
  • Notice that I didn't state "2-day Air" or "Next Day air", that is because, as Mr. Bezos mentions in the quote above; "And then relative to other online retailers because of our scale we have a distributed fulfillment center network that places products closer to customers that allows us to do fast transportation to customers, fast deliveries to customers but usually using ground transportation instead of air transportation and ground transportation is much more fuel efficient then air transportation."
  • The actual cost to deliver is much lower than you would expect. In some cases the $3.99 next day shipping charge may actually make the company money.

    Because of Amazon's scale and sophisticated systems, they can keep the same SKU in multiple warehouses based on historical geographic demand and then ship that item to the customer from the closest warehouse. In most cases they can ship Next Day orders via ground transportation. Occasionally they will have to use Air Transportation, if their inventory is not in the correct warehouse or combining the entire order can be accomplished in another warehouse, but they are smart folks so they've worked out all of these potential challenges.
  • So in theory Amazon can offer the same level of service for every customer, no matter if they are a Prime customer, Super-Saver customer or pay S&H on their purchase. The one caveat to this is the time it takes to put together your order. Super Saver orders may take a couple of days to pull together your orders. From a cost standpoint they are delivering the fastest way possible and the least expensive method. Doing this well isn't rocket science but it is close.

    This is a great experience for the buyer because they almost always get their order ahead of schedule.
  • So Amazon collects a $79 per year subscription that encourages more frequent purchases or they ship orders that generate more revenue ($25 or more) for free with Super Saver shipping and here is the beauty, they are basically the same cost basis (with some differences in pick/pack time)
  • Amazon's scale allows them to get the absolute best shipping prices available in the market and I can attest to the prices because I use Amazon's UPS rates to ship product to their Reno warehouse for FBA -- quite a savings over standard UPS rates.
  • This is why FBA is such a big part of their future plans. With FBA sellers can have their inventory in Amazon's system and get the same speed of service and make their items eligible for Prime and Super-Saver customers. An extra benefit to the system is that Amazon can actually charge the seller for pick, pack and ship helping defray the cost of shipping the item. So for Prime customers Amazon gets the revenue and the seller pays for shipping -- What a country! BTW, I do not mind this at all because I get access to their best customers and it saves me money over shipping it myself.

These guys/gals who run Amazon are brilliant and everything they do is meant to leverage their infrastructure and technology. IMO, this is why they deserve a premium valuation in their share price because everything they do is geared toward reducing costs and increasing non-burdened revenue (3P, FBA, AWS, Digital Delivery, etc.) while positioning their own retail business as the low-cost leader. Their profit margins cannot help but go up as they execute their plan.

IMO, the battle for ecommerce supremacy has been won by Amazon and they are pressing their advantage. Companies like eBay and other less efficient retailers are at a distinct dis-advantage when competing against Amazon. You just better hope they don't start selling in your category or niche.

Just my 12%

Changes Coming to eBay's Media Category!

eBay announced yesterday that they would be changing some item specifics for the Media Category:

"... we will introduce Condition values "Brand New", "Like New", "Very Good", "Good" and "Acceptable" in place of the current values "New" and "Used"...

... These changes won't affect items currently listed on the site. However, during the relist or revise process, items that currently have their Condition as "New" will be defaulted to the "Brand New" value and items with the condition "Used" will be defaulted to "Acceptable". Sellers may of course change the Condition value for their item at any point after these changes are introduced. Condition will also be defaulted to "Acceptable" on new listings if the seller has not selected a condition value
."

Based on this announcement and what I've been hearing will be happening this fall, it looks like the media category on eBay will be soon be looking a lot like half.com. I'm not sure what this means for the future of half.com, but here are some of the changes you should expect:
  • 30-day Fixed Price listings in the 3 cents per listing range. This would replace the SIF format (Store Inventory Format) for media.
  • Single Item Detail page for each SKU with listings underneath the item description.
  • Listings will be sorted by product condition: Brand New, Like New, Very Good, Good and Acceptable and I'm hearing that there will only be 5 listings per condition with a link to additional items for that condition. I'm hoping they choose the Amazon model of new and used condition tabs rather than the half.com model.
  • I'm still not sure if they will sort by Best Match or by lowest price, but lowest price makes more sense. It could also be lowest total price, including S&H.
  • I am hearing rumblings that they will also require limits to the S&H fee a seller can charge for standard shipping.
  • There may also be some requirements in regards to "time to ship"; something like must ship within 2-3 business days.
  • No word yet on FVF increase but if they are charging a 3 cent per 30-day listing fee then expect the FVF for media to rise to at least 12% plus PayPal fees.
  • Haven't heard yet whether PayPal will be required.

I actually don't have many problems with these proposed changes as long as they don't stop there. I would also like them to:

  • Add a shopping cart. I realize that the cart wouldn't work site wide at this point, but at least make it work for the media category.
  • If the item goes out of stock during the 30 day listing, sellers should be able to change quantity to zero so that it doesn't show in search until more inventory is added. As long as these inventory updates are completed within the original 30-day listing time frame, there should be no additional listing fees. This will insure that the "buyer experience" is improved and that inventory can be managed more effectively.

I'm not sure what effect these changes will have on the auction business in the media category and it is possible that eBay will display auction listings within these same results but it is clear the advantage will go to Fixed Price listings.

The reason these changes won't happen until the fall, is because eBay does not want to rock the boat during Textbook season on half.com, which ends in mid Sept. Waiting until then to implement these changes doesn't give sellers much time to prepare for Christmas and is a signal that half.com will close, though I haven't heard anything about that.

I am also hearing that similar changes are planned for the Consumer Electronics and Motors -Parts and Accessories categories, but media seems to be the perfect test category.

I'll write more as I get some more detail.

Just my 12%

Thursday, July 24, 2008

Amazon Keeps Taking Share!

Not only is Amazon taking share of business away from eBay and other online ecommerce sites, but they are apparently taking share away from the offline world as well.

The online data is easy to track with Amazon active users growing 18% Y/Y in the 2nd quarter to 81 million, compared to eBay, which grew active users by 1% Y/Y to 84 million in the most recent quarter.

So where are these new Amazon customers coming from? Certainly they are coming from other online retailers and marketplaces, with eBay and Overstock recently reporting slowdowns, but could they also be coming from traditional B&M retailers as consumers decide to travel by mouse rather than car.

Perhaps Amazon is getting an increase in share of new online shoppers who would prefer to shop from home than drive to the store. Jeff Bezos suggested that during the conference call; "On the fuel prices we suspect that higher fuel prices may be a relative advantage for us both in terms of relative to physical world stores because of the expense of driving to a store, even just driving 10 miles these days is a few dollars worth of gasoline and consumers we suspect are beginning to take that into account and think about that and try to do trip consolidation and so certainly our free shipping offers and Amazon Prime become very high, a clearly of even more value to customers under that set of circumstances.

And then relative to other online retailers because of our scale we have a distributed fulfillment center network that places products closer to customers that allows us to do fast transportation to customers, fast deliveries to customers but usually using ground transportation instead of air transportation and ground transportation is much more fuel efficient then air transportation. So probably this is a relative advantage for Amazon and its our job to insulate customers since we offer free shipping and Amazon Prime offers fast free shipping, the burden is upon us to make sure that we can do that in a way that is economical for us so that customers can continue to enjoy those free shipping offers and we have clearly no intention of changing those. We’ll keep them in place."


I'm not an analyst, but I would think the fact that Amazon is taking share from competitors during an economic downturn would be a positive even if their margins get compressed a little. Once Amazon gets a customer they won't likely lose them and as they expand categories and consumers can find just about anything they are looking for on Amazon they will continue to grow their customer base.

The metrics that stick out to me are: Revenue growth 35% Y/Y (Excluding FX), unit growth 32% Y/Y and customer growth 18% Y/Y. Margins will be tight but at least in this current environment if Amazon is growing those three metrics they are headed in the right direction, IMO.

Here is an article and video clip that makes my point.

Just my 12%

Wednesday, July 23, 2008

Notes from the Amazon Earnings Call!

I'm going to leave the details until I can review the transcript, but I'm listening for info on 3P sales, FBA and other Seller facing segments.

I will continue to update this post as I get more info: Update: Q&A session
  • 3rd party units grew faster than Amazon's retail units.
  • Active seller accounts grew 18% Y/Y
  • Amazon Prime, in many cases, uses ground transportation for their 2-day shipping rather than Air, because of the how their distributions centers are distributed throughout the country.
  • Sellers take customer service on Amazon very seriously and FBA is a key to translating the Amazon customer experience to those 3P sales.


    Just my 12%

Amazon Reports Q2 Earnings!

Just waiting for the Amazon numbers to be released:

Here they are:
  • EPS (earnings per share) came in at $0.37 cents a share; a significant beat of the Streets estimates of $0.27 per share.
  • Q2 revenue was up to $4.06 billion a 41% increase Y/Y
  • Excluding FX revenue gre 35% Y/Y
  • Operating income increased 86% Y/Y to $217 million
  • Excluding FX operating income grew 71% Y/Y
  • Net income increased 102% to $158 million in the second quarter, or $0.37 per diluted share, compared with net income of $78 million in 2007

Highlights:

  • Worldwide Media sales grew 31% to $2.41 billion in second quarter 2008, compared with $1.83 billion in second quarter 2007.
  • Worldwide Electronics & Other General Merchandise sales grew 58% to $1.53 billion in second quarter 2008, compared with $0.97 billion in second quarter 2007, and increased to 38% of worldwide net sales compared with 34%.
  • North America segment sales, representing the Company’s U.S. and Canadian sites, were $2.17 billion, up 35% from second quarter 2007.
  • International segment sales, representing the Company’s U.K., German, Japanese, French and Chinese sites, were $1.89 billion, up 47% from second quarter 2007, and increased to 47% of worldwide net sales compared with 45%.
  • Over 400,000 developers have registered to use Amazon Web Services (AWS), up more than 30,000 from last quarter.

These numbers were significantly higher than Wall Street expected and signal that consumers is still spending money they just happen to be spending it at Amazon and not other sites. Amazon now should be considered a bell weather stock that signals the strength of ecommerce.

Just my 12%

Tuesday, July 22, 2008

Amazon Q2 Earnings Tomorrow

This is a very important earnings call, not only for Amazon investors, but for all of Wall Street. eBay and others have had so-so earnings announcements recently signaling a slowing down of consumer spending, and the Street appears to be looking to Amazon for the answer.

If Amazon beats estimates and ups guidance for the rest of 08' than their share price should rise substantially and it would improve sentiment on Wall Street.

eBay stated it was concerned with a slow down in the economy and re-stated guidance for the rest of the year, which caused their share price to decline 14%. If Amazon beats and raises, in this environment the share price would have no where to go but up.

If Amazon has a so-so Q2 and re-states guidance for the rest of the year, the whole market may take bit of a hit -- Amazon has become a bell weather stock, IMO.

Analysts are cautious going into earnings, but I think Amazon will pull the rabbit out of the hat.

I do not own shares in eBay or Amazon and am not a investment advisor, this is just a gut feeling based on observation.


Just my 12%

Jeff Bezos Wants to Rule the World!

Okay, I really don't know that for a fact, but if I look at all of the cool stuff Amazon.com is doing these days, I'm positive he wants to rule the Internet.

Let's just list some of the things that Amazon has going for them.
  • Projected $20 billion in sales in 2008
  • 30% of the units sold through Amazon were from 3rd party sellers.
  • Amazon Web Services continue to grow, even with some service hiccups - AWS provides Cloud computing services for developers and start-ups. (Its all techie stuff)
  • Millions of associates worldwide are promoting Amazon product.
  • Amazon will soon be opening up China and India to 3rd party sellers (sorry no details on when)
  • FBA (Fulfillment by Amazon) is available in the US, Germany, UK and Japan and the year-and-a-half old program is growing fast.
  • Amazon's share of the MP3 Digital Download market is growing, with some estimates suggesting Amazon has from 8 - 10% of the market.
  • Webstore by Amazon has opened its doors to media sellers, in addition to every other category of seller.
  • TextPayMe service allows balance transfers and payments to be made by mobile phone, email or the web.
  • TextBuyIt service allows customers to compare pricing from their mobile phone.
  • Amazon isn't just a media retailer anymore with everything from Automotive parts to Home and Garden supplies available for sale.
  • Endless.com online shoe retailer.
  • Amazon isn't afraid to develop and launch their own sites and platforms, unlike other companies that have to buy them. Why buy something when you can build it yourself and leverage all of your infrastructure.
  • Now you can buy product through your TiVO.
  • And the list goes on and on.

I've heard many people say that Amazon is going to be the WalMart of the Internet and I have to disagree ... I think it's going to be bigger than WalMart.

Just my 12%

Guest Blogger Kevin Harmon - I’m A Stranger In My Own Land

Kevin had an interesting travel experience that he would like to share:

Hi gang,

Ok, we’re all business owners here. Admit it - you’ve screwed up something before, right? Something simple, something routine, something that makes you feel like a dolt.
“You dolt” is actually what I muttered to myself on Friday as I was checking my bag in at the Air Trans counter to fly out to the Amazon Seller Conference in Seattle. My driver’s license, that wonderful 2×3 inch piece of laminated government formality, was safe and sound…at my office 15 miles away.

I have flown many, many, many times, and I have never once not brought my license. So here’s what happens to you, if you’re lucky, to still get on the plane without it (in this order):

Raised eyebrows from the baggage counter girl. “Do you have any id at all?”.

I did have several credit cards with my picture on them, as well as a Sam’s Club card with my photo. I pulled them out and showed them to her, along with several pictures of my family and my Starbucks card for added “I am not a terrorist” emphasis. Somewhat reluctantly, she checked my bag and handed me my ticket, and I headed for security.

I’m yanked out of line the second I tell the “checker” that I don’t have my license. I get the full SSSS treatment - strip search, cavity search (ok that isn’t true, but I did have my shoes off and my belt undone, which is further than I ever got on many, many dates), bags opened, bags swabbed with some magic bomb detection cloth, and finally, I’m through.

Flights go well - conference in Seattle goes well.

Today is again travel day. I show up to the airport, get to the baggage counter, do my no license spiel, pull out the credit card with the picture, check my bag, get my ticket, and head for security.

You all already know what’s coming, don’t you?

I had the wonderful pleasure of meeting the head of the TSA security shift this time - Steve, badge number 17384. I give him my speil, pull out the credit cards with photos, pictures of the family, Starbucks card (I’m in Seattle for Chrissakes).

He gives me a blank stare. He asks me to step to the side where all the terrorists have to stand and walks away. I begin seductively undressing myself because, well, I know what’s coming.
Only it doesn’t come. He walks back over a minute later with a piece of paper. “Write down your home address and your date of birth please”. I did. He then makes a phone call and just stands there next to me on hold.

10 minutes later, I ask him “hey Steve-O, what’s the dellio?”. He says that protocol is to call in to a single (!) phone number in D.C. to speak with somebody who can verify my identity. “Allrighty,” I say.

30 minutes to flight departure.

10 minutes later, you may as well have fast forwarded us ahead 10 minutes. I’m still standing there holding my pants up and he’s just standing next to me holding the phone to his ear.

10 minutes later - yeah, same thing.

38 minutes after Steve-O makes the phone call, somebody in D.C. answers the phone. 7 minutes later - I am indeed…me. Steve stamps something and I rocket through security.

“Where’s S Gate?” I yell back to Steve.

“Oh, it’s on the other end of the airport - you won’t make it”

Steve-O was right. 3 people movers, 1 tram, and 4 miles of walking later, I breathlessly get to my gate.

“Atlanta,” I manage to get out to the humored Air Trans rep standing at the locked door.

“Long gone. Left 10 minutes ago.”

I stare at her for a few minutes blankly. “But, my luggage is on that plane.”

“Yeah, it made the flight!” she responded cheerfully. I refrained from choking her simply because they wouldn’t be able to verify my identity at the jail.

She booked me on the next available flight, which is tomorrow.

Well, nothing to do now except go rent a car and go explore Seattle til morning. I actually got 3/4 of the way to the rental counter before it hit me.

No drivers license.

I’ve got a laptop, my iphone, and my wallet. I am a stranger in my own country.

But we are entrepreneurs, people. We take lemons and make lemon juice - mainly because we pound the lemons real hard because we’re so mad and make juice. Making lemonade out of lemons is just stupid - who walks around with sugar and a glass? I’m off point.

So I hop in a cab and tell the driver to take me to the ferry pier. I buy a round trip ticket to Bainbridge Island, hop on the ferry, and we float off into the Puget Sound. From the water, Seattle is absolutely stunning. I’ve got the Space Needle to my left and I’ve got an unbelievable Mt. Rainier on my right, looming in it’s snow covered greatness. It’s 95 degrees back home, but here, in the wind of the bay, it’s barely 60. Just beautiful.

I ride to Bainbridge, walk off, walk right back on, and ride the ferry back. I get all melancholy, so I plug in the iphone and listen to my favorite melancholy music, Stings’ “The Soul Cages”. Start with “Why Should I Cry For You” and carry on til the end of the CD - try it, I dare you.

So here I sit, after a wonderful salmon dinner at Ivar’s Clam Digger Lounge, drinking coffee (required, I’m in Seattle), writing away, and staring out at the bay. Seattle has this way of making me quiet and introspective - beautiful places do that to me. I feel very envious of the people who live here. Somehow, watching a man feeding crackers to the seagulls that glide along with the ferry is just more important than working. Seattle, to me, feels like a city that kind of lives and breathes on it’s own, and the people here are just content to be a part of it.

Think of me at 7 am tomorrow - I get to start pulling out credit cards with my picture on them all over again.

The Story Contunues:


Kevin

Musings About Amazon!

I just got back from the Amazon Seller Conference and thought I would jot down some observations, they may be a little scattered so bare with me.
  • Being at the conference this week and spending time at Amazon headquarters took me back to the good old days at eBay -- I was blown away by how similar it felt. I was also struck with the realization that I now know more Amazon employees than I do eBay employees -- Most of my eBay contacts have moved on to other ventures.
  • On eBay there is a lack of trust in management and the marketplace, but I don't get any of that from Amazon. The marketplace has no trust issues, management tells it like it is and it is clear this is their show.
  • This is the impression I got about management: We have a plan; we are implementing it to the best of our ability; we are open to your suggestions, but we are going to run this business according to our plan. This approach works because they are providing value to sellers. As we've seen with eBay, it doesn't work when there is little value provided.
  • Amazon executives tend to be pretty straightforward. Not a whole lot of time is spent saying "we hear you", but that isn't to say they don't listen.
  • The hierarchy of needs at Amazon is clear: #1 Amazon Customers, #2 3P Sellers and #3 investors. Though 3P sellers are considered customers of Amazon, they are also held to some very high performance standards because they are there to serve Amazon's #1 priority; the Amazon customer.
  • Amazon provides great customer service for their #1 priority (the customer) but they need work on serving the #2 priority (the seller). They realize they need some improvement in that area and were open to suggestions, but were honest about some of the challenges they face in scaling that kind of customer service.
  • Amazon has lots of things that are not quite working on all cylinders, but it is clear they have a plan and will eventually get there. eBay says they have a plan but I have little faith they will get there.
  • There are some very large sellers on Amazon. I thought I was big at Glacier Bay DVD but I would have been dwarfed by many of the sellers that sell on Amazon.
  • Amazon will eventually sell everything available, but it may take years before they can roll out every category. eBay sellers who are anxiously awaiting the day when Amazon opens their category may be waiting for awhile. I realize this does not provide much comfort for those hanging on by the skin of their teeth but rolling out new categories can't be accomplished quickly on a huge platform like Amazon.

I'm looking forward to the future of ecommerce with Amazon as the leader, but make no mistake this is their game and they are in it to win. As long as they continue to provide value for buyers and sellers they will continue to grow and take more share of ecommerce.

Just my 12%

Monday, July 21, 2008

Heading over to Amazon Headquarters!

I'm getting ready to head over to Amazon headquarters for a meet & greet with Amazon execs and hopefully Jeff Bezos. I understand there will be a Q&A session as well as some focus groups, so this should be quite interesting.

I will write more in-depth tomorrow when I arrive back home, but hopefully I will be able to blog from the meeting. If not I will at least Twitter as much as possible.

Just my 12%

Sunday, July 20, 2008

Quick Hits from the Amazon Seller Conference

Here are some quick take-aways from the morning meetings:
  • Amazon wants to be in every category you can imagine, but it takes time to roll these categories out. My note to eBay sellers, who feel they don't have a place on Amazon at this time - they are working on it and your time will come.
  • They envision some categories that are strictly 3rd Party sellers where Amazon doesn't have a retail presence, this will happen more in international markets but is something they are considering.
  • They hope to facilitate the list once-to-all listing strategy at some point in the future. Basically if you are in the US and list your items as being available internationally then they will be available on those international sites. This functionality is not available now, but they are looking at how best to implement it.
  • There are 79 million active user accounts on Amazon.
  • 1.4 million sellers accounts and for the first time this number is actually bigger than eBay's number of 1.3 million sellers accounts.
  • There are plans to open China and India to 3rd Party sellers but the time-lines have not been finalized.
  • Low Price, product selection and Marketplace trust are Amazon's three keys to an excellent customer experience.
  • Additional categories opening up this year are: Industrial & Scientific, Golf products (in the Sporting Goods category) and Tires and Wheels (in Automotive Category).

Trust and Safety observations:

  • It is obvious to me that Amazon cares equally about the buyer and the seller and the only differentiation is when sellers do not excel.
  • Amazon actually stops Buyer fraud before the seller even sees a "Ship Now" order. Sellers on Amazon never have to worry if they are going to get stiffed on an order.
  • Less that 3% of all feedback left on Amazon is negative, which is pretty amazing to me.
  • Feedback is left for 19% of eligible orders in the US
  • Seller performance management revolves around Order Defect rate which includes Negative Feedback as a % of total orders, A to Z Claims as a % of total orders and Charge Backs as a % of total orders. Amazon wants to see a less than 1% order defect rate. The vast majority of sellers are well below 1%

These are just some of the things that stood out to me this morning and I'll add additional items as I come across them.

Amazon truly partners with sellers and works to protect them from buyer fraud, but they have a high standard for performance.

In contrast eBay seems to view seller performance as the problem with the marketplace and many of their changes are considered punitive rather than constructive. It may just be a difference in perception but Amazon actually considers sellers to be customers/partners while eBay talks-the-talk and just appear to walk-the-walk.

Just my 12%

Amazon Seller Conference Day 2

Day one was really kind of basic, so I spent most of the day networking and connecting with vendors and other sellers. Though I did break away to go see The Dark Knight, BTW Heath Ledger's performance alone is worth the admission price.

Today is Amazon day:
  • Keynote with Sebastian Gunningham SVP of Amazon's 3P Business
  • Matt Williams - General Manager, Amazon Web Store
  • Joseph Sirosh - Amazon Alliance (actually its called something different now) Amazon's version of Trust & Safety from a sellers perspective.
  • Kevin Yurica, Amazon Merchant Web Services

After lunch there will be break-out sessions on FBA, Listing, Post Order Care and members from the Tech Support team will be here to answer questions.

Tomorrow, we will be traveling to Amazon headquarters to participate in an Executive Panel and take a tour of the facility. Hopefully they will let me blog from the session.

I'll be back with some tidbits from the conference sessions later today.

Just my 12%

Friday, July 18, 2008

Customer Satisfaction - It's All Relative!

For eBay sellers, the feedback rating has always been a standard of customer satisfaction. Prior to May of 2008 (before neutrals were counted as negs) many a seller was proud of their 100% feedback rating.

But, how do these ratings on eBay compare to the rest of online ecommerce? According to Forsee's American Customer Satisfaction Survey, the #1 online retailer is Netflix, with a rating of ... drum-roll please ... 86% on a 100 point scale. How can that be? That rating would get you kicked off of eBay ... well not exactly.

eBay Feedback ratings give the customer 3 options in rating a purchase; Positive, Neutral and Negative (not really a complete survey on the subject) so the ratings are certainly going to be higher because of the limited choices.

The Forsee survey on the other hand takes a detailed scientific approach: "Because online satisfaction is such a vital metric, ForeSee Results measured the top 100 online retailers using the methodology of the University of Michigan’s American Customer Satisfaction Index (ACSI)...

The ACSI’s customer satisfaction methodology is a forward-looking analytic that can predict a retailer’s future success. Because the most critical success factor is future sales, online or offline, ForeSee Results also measured and reported on purchase intent for each of the Top 100 retailers. The ACSI methodology can show how likely people are to recommend and purchase (online or offline), giving web retailers a tangible way to quantify the contribution of the web channel on overall business goals, critical information whether the retailer is a pure play or a multichannel company."


So you really can't compare the two, right? Well not until Buy.com began selling on eBay.

According to the Forsee survey, Buy.com has a rating of 72, a far cry from the #1 spot of Netflix at 86 (Amazon has an 83 and Zappos a 78) but on eBay, Buy.com's feedback rating is a lofty 99.

Buy is the same company, selling the same product on eBay, as on its website and eBay customers are notoriously high maintenance, much more so than regular online shoppers, so how do we make a comparison? We really can't, because any comparison reveals that eBay's feedback rating is worthless as an indicator of customer satisfaction. It really isn't even an effective method for differentiating sellers.

I can understand management's switch to DSRs as a measuring tool, but with Buy.com getting 4.8's across the board on their DSRs, it make DSRs worthless as well, IMO.

So what can we conclude from this whole exercise? eBay does not have an effective method for measuring customer satisfaction and this whole "buyer experience" kick is a farce. If you can't measure customer satisfaction effectively, you will never improve the buyer experience. Sure, eBay does their own surveys of buyers to measure improvement but does any of that really corelate to Feedback and DSR's? Not likely.

Strangely enough eBay was not included in the Forsee survey results, because they are a "venue" not a retailer, it would be very interesting to see where eBay would rank in that survey.

Just my 12%

Thursday, July 17, 2008

Spending the Week in Beautiful Seattle!

If any of my readers are in the Seattle area and have some time today, I'd love to come by and see your operation. Also, if anybody reading the blog has a contact at Microsoft, I would really like to meet with them while I'm here. See what they are planning from an ecommerce perspective.

I can be reached at rksmythe at yahoo

Just my 12%

eBay Earnings the Day After!

eBay's shares are down 11% in pre-market trading this morning to $24.98 on tepid guidance for Q3. It looks like Wall Street is finally seeing the real problems here and moving to other investments.

I read the transcript of the earnings call and honestly, I was bored. It isn't like we haven't been telling them this was going to happen.

Amazon announces earnings next week and if they have a good Q2 and raise guidance for the rest of the year, what does that say about eBay? It's not the economy, or more accurately in a slowing economy, buyers prefer Amazon.

If eBay management does not change course and fast, they may actually see decline in the Marketplace business by the end of the year.

They can turn it around, but they would have to completely change their strategy and it isn't likely that they will do that. This management team is too committed to this current strategy.

Just my 12%

Wednesday, July 16, 2008

I Missed the eBay Earnings Call, But ...

There was some great coverage of the call. RBH over at eBay Ink live Tweated (is that really a word?) You can get his take here.

Scot Wingo has a couple of good posts over at ebaystrategies.

In after hours trading the share price is taking a beating. As if this post it is down nearly 7% to $26.19 per share.

PayPal and Skype continue to shine while eBay Marketplaces continue to struggle. Management seems to believe they have it under control, but what else are they going to say.

I'll wait for the transcript to give you more color on what was said.

I'm sitting here in a Starbucks in Duval, Washington so I'm a little out of it right now, but I'll see what else I can dig up.

Just my 12%

eBay Seller NARU and Inactive Accounts on the Rise

According to SellerDome there has been a marked rise in NARU and inactive eBay seller accounts.

From 5/25/2008 to 7/16/2008 (52 days), the number of NARU and Inactive eBay Sellers (sellers with no feedback for the past month, past 6 months or past 12 months) ranked in the top 100,000 by feedback on SellerDome.com has increased nearly 15.1%.

On 5/25/2008, 18.5% (18,514) of the Top 100,000 eBay Sellers were NARU or Inactive. Today, 21.3% (21,308) of the same group are NARU or Inactive.

They have a chart available on the SellerDome blog:

This will be something to watch a 15% rise in NARU or inactive seller account is not small.

Just my 12%

Scot Wingo on Finding 2.0

This is just a quick hit to recommend Scots recent post on Finding 2.0. If you are planning on maximizing your eBay business, you will need to know how this all works.

Please link here for the entire post: Mega Finding 2.0 update!


Just my 12%

ChannelAdvisor Acquires RichFX

Sorry about just posting the press release but I'm getting ready to board my flight to Seattle and I didn't have time to come up with my 12% on the acquisition. Here goes:

ChannelAdvisor today announces the acquisition of RichFX, a leader in the rich media image space, to further round out its portfolio of e-commerce management solutions. With over 10 million rich media assets served a day, RichFX has delivered hosted rich media solutions to the world's leading multi-channel merchants since 1997.

Now in addition to offering a full complement of solutions for merchandising to online marketplaces, comparison shopping and search engines, ChannelAdvisor offers the myRichFX hosted rich media platform. This enterprise-scale platform integrates scalable infrastructure, robust imaging applications and expert support services to help retailers implement effective rich media that sells across all their channels.

ChannelAdvisor’s new myRichFX platform is the foundation of an entire suite of rich media tools that allows retailers to create a broad range of rich media including:

  • Image solutions including resize, product zoom and color swatching
  • Personalization including product configurators
  • Catalog and circular solutions

To learn more about how the new myRichFX platform complements ChannelAdvisor’s multi-channel management offerings, register now to attend this informative webinar.

I did have time to read Scot Wingo's blog post about the acquisition and found some examples of the use of RichMedia:

This is just a sampling of the solutions ChannelAdvisor will now be able to offer.

Just my 12%

Tuesday, July 15, 2008

Will the Market Weigh-in on the Buy.com Deal?

When I originally posted about the Buy.com deal back in early May, I sent several emails to my analyst contacts to get their take. I was underwhelmed with replies, mostly because they didn't believe it was material -- One deal would have little to no impact on the company.

Well now, with the Q2 earnings call just a day away and the NY Times (requires registration)writing about the deal, perhaps Wall Street is changing their tune a little bit.

I came across this quote from a Reuters article this morning:

"Analyst Stephen Ju said the agreement with Buy.com could be only the first of such deals, adding that he expects the company to post a slight acceleration in U.S. gross merchandise volume in the second quarter.

Gross merchandise volume, or GMV, is the total value of goods and services sold on eBay sites -- on which eBay takes a cut in the form of transaction fees.

"Over the next few quarters, these deals may have the effect of replacing high-rent with low-rent tenants and average take-rates may begin to compress," Ju said in a note to clients.

As a result, the effect on the company's revenue may be more muted despite a modest rise in GMV, said the analyst, who maintained his "sector perform" rating on the stock."


A single deal is not material, but more deals like this replacing high take-rate business with low take-rate business certainly could have a material impact on eBay's business.


Just my 12%

Monday, July 14, 2008

Amazon Seller Conference is this Weekend!

Everybody calls it the Amazon Seller Conference, even though Amazon does not really sponsor it; executives do attend though. It runs this weekend in Seattle from the 18th through the 21st.

I'm looking forward to networking with a whole different group of sellers and vendors than I'm used to; though I'm sure I will see some old pals. Kevin Harmon from InflatableMadnessDVD.com will be there so it will be good to catch up with him.

From what I gather this conference is nothing like eBay Live and is a more traditional style conference similar to the ChannelAdvisor Catalyst or other industry meetings. Everybody is there to see how they can improve their business and there is an added bonus of getting a tour of Amazon's headquarters -- Hopefully Jeff Bezos will say hello.

If you cannot attend, but have questions you need answers to, please email me or post your questions in the comment section. I am flying up on the 16th to see my brother and his family, but I will certainly be blogging from the conference.

Oh I will also be sharing some info on my buy back site and selling through FBA.
Just my 12%

Connecting the Dots on Amazon Payments!

Back in Dec of 2007 Amazon announced that they had invested in the payment service Bill Me Later and would soon be adding it to Amazon.com as a payment option. Well, it appears that day has come with little fanfare.

I was doing my normal daily web surfing when I came across this announcement:"Amazon.com now accepts payments made with the online payments service Bill Me Later. Additionally, Amazon is also now a featured store on the Bill Me Later home page."

So, I immediately went to my Amazon account to verify if this was the case and low-and-behold, there in my payment options was Bill Me Later. So, this news got me thinking:

I've been hearing quite a bit of chatter regarding Amazon's payment business and there are rumors swirling around about a PayPal competitor coming soon from Amazon, well its starting to look to me like they are getting their ducks in a row.

Let's see if we can connect the dots:

  • In August of 2007, Amazon announces FPS (Flexible Payment Service) for developers to create applications using Amazon's payment platform.

  • In Oct. of 2007 word leaked out that Amazon had bought TextPayMe, a service for transferring money via text message -- I've tried it and it works great by the way.

  • In Dec of 2007, Amazon invests in Bill Me Later.

  • In April of this year, Amazon announces TextBuyIt, which allows mobile phone users to buy Amazon product from their mobile devices.
  • Also in April, Amazon developers released a "Pay Now" Widget for websites and followed that up with a Marketplace Widget for ecommerce sites.
  • Then I recently went to my Amazon Payments account and noticed that all of these individual applications were tied together on one site including:

    Send Money from Your Computer - Use your Amazon Payments account to send or receive money from any e-mail address -- kind of sounds like another service I've heard about :)
  • Then late last month, rumors started to fly about a PayPal killer that Amazon was working on, when Derek Brown of Cantor Fitzgerald released a research note that said;

    "At the same time, we see potential changes to the competitive landscape. Most noteworthy, our research leads us to believe that Amazon.com may soon launch a PayPal-esque Payments service for use by consumers and merchants across the Web, potentially siphoning growth and/or profit from eBay's crown jewel."

Am I reading too much into this? Does ecommerce need another payment service? It sure seems to point to one thing to me: Amazon Payments will compete directly with eBay's PayPal for the non-eBay ecommerce business. Of course we all know eBay wouldn't accept Amazon Payments, thought they certainly couldn't use the same excuse they used to keep Google Checkout off the site.

Imagine if Amazon enabled their 70 million active users to use their Amazon account including A2Z guarantee on any website they choose to buy from (except eBay of course)

What is even more fun to consider, is that an eBay seller accepting Amazon Payments, offering Amazon's A2Z guarantee and using Amazon's FBA for fulfillment could provide that world class "buying experience" eBay so desires for their users.

Update: Well, I guess I was right about this. Amazon Launches Merchant Payment Service

Just my 12%

eBay Prevails in Tiffany Lawsuit!

According to Reuters this morning, "EBay Inc, scored a major court victory on Monday when a federal judge ruled that Tiffany & Co had failed to prove the online auctioneer was responsible for the sale of fake Tiffany jewelry on its site."

This is the only reference I could find that there was a ruling in the case. eBay sure could use a win in this case after losing two cases (LVMH and Hermes) in France and having to backtrack on PayPal only in Australia.

Update: The eBayInk blog just posted regarding this.
Further Update: Here is the link to the courts decision in pdf format .

Just my 12%

I Heart the NY Times!

I spoke with Brad Stone of the NY times last week regarding the Buy.com deal with eBay and then kind of put it out of my head, because I wasn't sure when the piece would run. So when I checked my stats this morning, I was quite surprised to see nearly a whole days worth of visitors -- before 7:30 AM PST.

The power of the press! My little blog about ecommerce is mentioned in the print version of the NY Times as well as linked from the online version. So now I feel I must write something profound to keep all of those visitors coming back.

If you are new to MyBlogUtopia please take some time to look around. I've even brought back some of my best posts for you to get caught up:

And I'll even throw in a little Amazon to mix things up.

Thanks for stopping by. Please take some time to subscribe to MyBlogUtopia RSS feed and MyBlogUtopia Reader Feed, follow me on Twitter or link to me at LinkedIn.

Just my 12%

Sunday, July 13, 2008

eBay Q2 Earnings Call is Weds. 7-16

The sense on the street is that eBay will meet or beat their numbers, which should be no surprise, that has happened every quarter that I can remember -- eBay knows how to make their numbers.

The concern for investors should be centered around the Marketplace business and if the recent changes are having the desired effect. It is great for PayPal and Skype to be growing very fast, because their growth helps the overall business and limits the financial damage coming from the Marketplace business, but if eBay can't stop the bleeding in the US business, management is going to have a tough time.

Some things to look for during the conference call:
  • What are the active user numbers? Are they growing again?
  • Is GMV growth still in single digits?
  • Is International GMV taking more share of total GMV?
  • Did the Buy.com deal grow GMV in their categories or just take it from other sellers at a lower take-rate?
  • How much of PayPal's revenue is coming from outside of eBay.
  • What happens if Amazon actually launches a true competitor to PayPal?

It will certainly be an interesting conference call, as it will be the first where John Donahoe was fully in charge. I have no doubt they will meet their numbers; CFO Bob Swan is that good. Do they have the right strategies and right people in place to turn around the flagship eBay business?

During the Q4 2006 earnings call, Meg said;

"Responding to a changing competitive landscape is part of this company's DNA, and I believe we have a great set of assets, the right strategies and the right people in place to maintain our sizable lead in all of our business units. Even with these challenges, we still delivered strong results for the full year and are extremely well positioned for continued success into 2007." (bold is mine)

Obviously they didn't have the right strategies and right people in place, because in January of 2008 they created new strategies and put different people in place. So what will John Donahoe say this Wednesday that I can quote him on 2 years from now?

Just my 12%

eBay - Equal Opportunity "Pisser Offer!"

Sorry for that title, but as I hear from both sellers and buyers and read thread after thread and comment after comment on my favorite blogs, it has become ever so clear that eBay is basically pissing everybody off -- well that's not entirely true there are several groups that are happy.

First those that are "Pissed Off":
  • First we have the sellers, with well documented complaints about the changes being made.

    Sure eBay back-tracked somewhat on the feedback issue, but the consensus is; the reason for that move was not so much listening to their users, as it was saving their Power Sellers numbers. [I am so cynical]
  • Finding 2.0 and "Best Match" are starting to "piss off" buyers. I'm hearing "why fix something that wasn't broken" every single day now, from both Buyer and Seller and when Finding 2.0 is made the default in August you are going to hear a completely different group of complainers; "buyers".

    Veteran eBay buyers have already figured out how to make eBay work for them, they don't need eBay telling them what they should see in search. Newbies will look at the new Finding 2.0 and just say huh?
  • "Long" Investors are "pissed off" (though they don't go public with the anger) the share price just sits there and even after eBay beats Wall Streets estimates next week, the share price will continue to just sit there.

    PayPal, Skype, StubHub and the Non-GMV business are all growing but the Marketplace business is just treading water. Until the company is no longer called eBay and is considered much more than just an auction business, the stock will just sit there.
  • Employees are "pissed off", there are few old-guard employees still with the company and the new employees are already tired of all the whining and wondering what they got themselves into.

    eBay compensation is heavily geared toward stock options, so how long will these employees stay in this environment, knowing that their strike price is less than the actual share price.
  • Vendors are "pissed off" because many of them are dependent on eBay for a large portion of their business and there is no longer any growth in that channel.
  • Manufacturers are "pissed off" and suing eBay to keep their product off the site.
  • If I had to guess, eBay executives are "pissed off" that nobody gives them a break.

Now for those that are happy:

  • Competitors, who've seen an opening for the first time ever.
  • Bloggers and the Media who are happy to write about all this trouble; negative stories always get more run. I guarantee you nobody would be reading my blog if it was all "peaches and cream".
  • Lawyers are happy, as they line-up to sue eBay. In fact one of my very regular readers is with a major litigation firm in Washington DC.
  • Regulators and Government Agencies are happy that they can step in and protect the consumer and eBay has opened the door for them to step in.
  • Short Sellers are happy because they can profit from all the unrest.
  • Consultants (ie. Bain & Company) are happy because they've got a nice revenue source in eBay.

Let me be clear, the current leadership team is not wholly responsible for these problems. Many of these problems began back in [2006] while Meg, Bill and Company were still in charge, but Meg has been able to distance herself from all that trouble by bringing in her surrogate in John Donahoe. So I would imagine even John Donahoe is "pissed off" a little.

Just my 12%

Thursday, July 10, 2008

New Poll Shows Americans Losing Interest in eBay

This information comes from MoneyCentral Blog and MSN's Kim Peterson

"According to a recent MSN-Zogby poll, only 31% of Americans plan to buy or sell anything on the auction site in the next year. That's down from 40% who said they bought or sold something on eBay in the last year."

Read the entire article here.

The question I have, is why MSN commissioned a study about eBay, hmn!

Just my 12%

eBay Announces Further Feedback Changes

And I was going to take the day off, well I just found out that eBay is preparing to announce additional changes to the eBay Feedback system.

Here is what I have seen so far:

"Recalculating Feedback percentages without neutrals: Effective in late August, neutrals will no longer be counted as part of the Feedback percentage. This means we will be recalculating Feedback percentages retroactively for users worldwide. In the interim, no one will lose their PowerSeller status as a result of neutrals being included in their Feedback percentage."

Helping you resolve issues and satisfy buyers: By the end of October, we will roll out a new process to help you resolve issues with buyers, even after the buyer has left negative feedback. Everybody makes mistakes – buyers and sellers alike, and buyers should have a mechanism to change feedback if they make a mistake or if the seller rectifies an issue in a timely manner. Unlike with our previous Mutual Feedback Withdrawal system, our new process will enable buyers to change their feedback of the seller, not just withdraw the rating. We’ll provide more details of this new process in the fall.
"

The information I have quoted above may not be the final announcement, but it will be close. I expect the complete announcement to come via the eBay Announcement board shortly.

I'll update this with the complete announcement as soon as it is available.

Update: Wow, that was fast. Here is the link to the official announcement.

RBH also has a good post about this over at eBayInk

I really liked this section from Richard's Post.

"Finally, even though it’s good to hear that “we have removed more than 60 percent of the negative/neutral feedback left by buyers in an unpaid item (UPI) process”, I’d also like to find out why a buyer, who doesn’t pay for an item, is still able to leave feedback at all (positive, negative or otherwise)." (bold is mine)

The recalculation of Feedback, removing neutrals, is a good move, and as they say better late than never. I'll have to see what the final changes are for Feedback removal/change in Oct., before I have any opinion on those changes.

Just my 12%

Taking the Rest of the Week Off!

For those regular readers who get upset when I don't post on consecutive days, sorry but I'm going to be taking the rest of the week off. I've got to get caught up on stuff here at the house, processing order to ship to FBA and I have a couple of consulting projects to finish before I head out for the Amazon Seller Conference next week. The conference doesn't begin until Friday the 18th but I'm going up early to visit with my brother and his family.

I will be checking with my regular sources and Twittering through out the day, so if anything earth shattering happens, I'll be sure to let you know.

Just my 12%

Wednesday, July 09, 2008

Amazon Adds Customer Metrics Console to Seller Central

This announcement comes from the Seller Central Dashboard

"We are pleased to announce the launch of the new Customer Metrics in Seller Central. This tool provides reports that give you greater insight into how you are doing with respect to your customers’ satisfaction. For detailed information about the metrics available to you with this new tool, please visit our Customer Metrics Help page."

The following performance metrics are included in the report:
  • Order defect rate (ODR): The percentage of orders that have received a negative feedback, an A-to-Z Guarantee claim or a service credit card chargeback. It allows us to measure overall performance with a single metric. [This really has nothing to do with actual product defects, just problems with orders.]
  • Pre-fulfillment cancellation rate: This measures your in-stock rate for items sold with Amazon.com. [sellers may need to tighten up their inventory management]
  • Late ship rate: On-time shipment is a promise we make to our mutual customers. Orders ship-confirmed three or more days beyond the expected ship date are considered to be late.
  • Percentage of orders refunded: High refund rates may be an indicator of item stock-outs.

Amazon has always measured these results, but with the new Customer Metrics console they've gathered them into one place.

The ODR (Order Defect Rate) should be under 1% and they measure it both short-term (30-days) and long-term (120 days).

Here is what Amazon says about Performance Targets:

"All Amazon.com merchants should be working toward achieving and maintaining a level of customer service that will result in an order defect rate of no more 1%. Failure to meet this target does not necessarily put your account in negative standing, but failure to improve may negatively affect your account.

This is a baseline goal. Merchants with exemplary performance have the opportunity to distinguish themselves to buyers through the feedback rating that appears next to each of their listings. Most merchants are exceeding this target, so the stronger your performance, the better your chance of building a stronger, more competitive business."

UPDATE: For clarification; the ODR percentage is the number of defective (problem) orders divided by total number of orders during a selected period.

The Feedback rating is calculated on total feedback left not total orders.

For example my 30 day ODR is 0.44% and the Feedback portion of that rating is 0.41% (yes, you can still get negative FB using FBA) My actual Feedback rating is 97%

Just my 12%

Tuesday, July 08, 2008

Cafepress Acquires ImageKind.com

According to TechCrunch Cafepress has acquired ImageKind for a reported $15 to $20 million. For those of you unfamiliar with CafePress or ImageKind, here is a brief description of each business from Crunchbase.com:
  • "Based in Foster City, CA, Cafepress.com allows its users to independently create and sell a wide variety of products on the web. By allowing individual sellers to set up free “shops” within their domain, Cafepress makes it easy for artists and designers to sell their goods online. Over 2.5 million independent shops have been opened on Cafepress since its opening in 1999."
  • "Imagekind is an online marketplace for art. It has disrupted the world of art through democratization, by returning control of the global marketplace to the artists who can showcase and sell their work on its site. Imagekind allows the artist to build online galleries, set their own prices, keep profits and even collect commissions. In addition, Imagekind allows anyone to discover their inner artist through the “create path” which allows customers to upload their favorite pictures or piece of child art and turn it into a framed masterpiece or a museum-quality print on canvas. Imagekind is the world’s first community to serve as a hybrid online art gallery, photo-sharing and a print-on-demand service...."

This combination looks like a great opportunity for artists that are part of Imagekind to now have access to the Cafepress marketplace.

When I read this, I thought about my faithful reader ms.pat who is an artist; perhaps this combined company will create a great marketplace opportunity for those eBay sellers in the art category.

eBay's Share Price Rises 5% in Early Trading

I know it is still early, but what would explain an almost 5% rise in eBay's share price? The only news I can see out there, is a deal with Google Gmail to put a stop to phishing emails for eBay/PayPal customers who use the gmail service. That hardly seems worthy of a 5% pop.

Nope, there is something else in the wind and it must be quite interesting. I'll see what I can find out.

Just my 12%

IMA Threatens to Shut Down Bloggers

I was just going to let this whole IMA story die a natural death. Many other bloggers have been covering the story, so I've only touched on it here and there, but now I read over at Scott Pooler's blog that IMA President Steve Grossman is threatening to sue bloggers who have posted information they have obtained from the IMA forums.

I contacted IMA for an official response regarding this controversy, prior to this news that IMA would go after bloggers and received an email from Mr. Grossberg. I will post that response here in its entirety:

"I have not read any blogs or forums and therefore cannot answer as to what the cause is for those and what will be done. I can say the board of IMA has always acted with integrity and with the best interests of the organization in mind, and consistent with our by-laws and Florida state law for non profits and will continue to act this way now and inthe future.

We are aware of some members who are leading a charge for supporting an action that is most likely not consistent with our by-laws or Florida state laws. Unfortunately it appears some our members do not fully understand IMA is a legal entity, and is a non profit corporation and the board of directors has a duty to ensure we are operating within these laws. Ultimately the board is the ones who were elected and responsible for all business affairs of the organization and we have a moral and legal responsibility to our members and the organization and its assets and to see legal advice to protect the same if they ever come under attack.

Regards,
Steven C Grossberg

This whole issue apparently began with a disagreement between an IMA member (Debbie Levitt, CEO of AsWas) and Steve Grossberg, President of IMA on the IMA forums. It snowballed into something completely different, with IMA board members resigning and then airing their grievances on various blogs and then threats from membership to go to the Florida State Attorney General with their issues. Now with this reported threat by Mr. Grossberg to go after bloggers, it takes this all to a new level.

This just keeps getting more interesting by the day. I'll continue following it and keep you updated with any new information and certainly will let you know if MyBlogUtopia gets sued.

Well, since I am not a member of IMA, I've had no access to their forums, but I certainly have access to those "offending" blogs and have linked to some of their stories.

What started out as being a story of interest to maybe 200 people, has snowballed into a real news story, if IMA actually goes through with their threat to shut down bloggers.

Just my 12%