Saturday, August 30, 2008

Get to Know Your Favorite Blogger!

It has been a whirlwind for me the last couple of weeks, with a trip to Seattle to visit with Amazon and then a roadtrip to eBay to hear about the most recent changes. I'm looking forward to settling in and watching how the final quarter of the year turns out for online sellers.

I've also been making the podcast circuit; first an interview with Ina Steiner of Auctionbytes then a podcast with my buddy Kevin Harmon for Startup Nation, followed by a get together with ColderICE and then this morning, an Interview on eBay and Beyond: Basics to Business my interview is in the second hour of the show following Doug Minnick of Overstock Auctions.

As you probably know by now, I have an opinion about many subjects -- some I should keep to myself :). I call it my 15% and MyBlogUtopia is the perfect place to express those opinions, but if you want to get a different perspective on who I am and what I think about selling online, please listen to one or more of these podcasts -- they are not short but hopefully they are interesting.

The slogan for MyBlogUtopia is: "Enable sellers and get out of the way" and my goal is to comment on what is happening in ecommerce and give online sellers as much information as I can, to help improve their business.

My 15% is just that - Mine, but I want to hear your 15% as well, so please take the time to share using the comments section on the blog. I'll do my best to champion the business of selling online.

I hope you all have a wonderful Labor Day holiday.

Just my 15%

Friday, August 29, 2008

eBay & Beyond - Join me Live at 11:00 AM Saturday

If you have time Saturday morning, I will be a guest on the weekly radio show eBay & Beyond: Basics To Business. This is an Internet radio show that will be replayed throughout the week, but we will be "Live" on Saturday morning to take your calls.

The show begins at 10:00 AM EST so you "Left Coasters" will have to get up pretty early. The first guest will be Doug Minnick from Overstock.com and then I'm scheduled for 11:00 am EST but make sure to listen into the whole show.

We will be taking calls, so if you have time and have questions about selling online, join us for a great show.

See you at 10:00 AM EST www.basicstobusiness.com, Toll free call in number is 866-357-7746 and there is a live chat board available on the site if you want to use that for your questions.



Just my 15%

Off Topic: My 15% about the Presidential Election

Sorry, I know a post like this is not why you come to My Blog Utopia, but it is a Friday and there isn't much ecommerce news, so I thought I would make some politcal observations: (I'll probably tie some of it to eBay somewhere)

The 2008 Presidential election is historic and interesting for a number of reasons:

Age and Experience:

  • Two Senior Citizens are running - McCain (72 today) and Biden (66 in Nov.)
  • Two 40-somethings are running - Obama (47) and Palin (44)
  • Two Senators with over [25] years in national politics.

So the experience/no experience issues are cancelled out. There is enough experience to go around for both parties and BTW, when is someone in their 40's considered young :)

Barriers Broken - It is about time that we have a black presidential nominee and a female nominee for VP (on the Republican side) -- It only took, nearly 250 years to change that whole dynamic.

No Experience vs Four More Years of the Same - These two mantras need to be jettisoned from the debate -- both of them are silly and obnoxious. (Of course they are easy to say so they will continue until we are sick of them.)

No Experience:

  • JFK was 43 when elected president in 1960 after 13 years in politics. Obama is 47 and has been in state and national office for 11 years.
  • Sarah Palin (the presumptive Republican nominee for VP) has been in politics for 16 years, many of those years in an executive position as Mayor and Governor; unlike the other three Senators in the race.
  • Besides, their are two seasoned old-geezers in the race that have plenty of experience.

4-More years of the Same - Anybody who follows politics should know, that when the Republican party is concerned about McCain's less than conservative views and his willingness to work across the aisle, that comparing him to President Bush is just plain silly; but it does make for a good chant.

  • McCain agrees with the President on some things and doesn't on other things. He's called a "Maverick" by most journalists and pundits: "A maverick is a person who shows independence of thought or action, a non-conformist or rebel." source Wictionary. How can you call someone a "Maverick" and then say it will just be 4 more years of the same stuff?

Change! - Take it from eBay sellers, change is not always good or enjoyable. Obama, and the Democrats mention change constantly and the message fits well with the "4 more years of the same" slogan, but honestly, in the 30 years I've been voting nothing much has ever changed in politics. Change for change sake is foolish if you don't have a well thought out plan -- here comes the eBay bit -- eBay management is all about change and look at the turmoil in the marketplace.

  • True "Change" comes over time, not by speaking it into existence or wishing it would happen.
  • True "Change" comes through pain and heartache not through slogans and wishes.
  • True "Change" needs to happen when things are going well, not when things are going poorly, because "change" should never be reactionary, it should always be well thought-out and planned.
  • "Change" for "Change" sake does nothing but shuffle the deck and leave the real problems for another generation.

I agree much needs to be changed in this great country, but it needs to happen first with the political parties. What is the old saying "nobody changes until they are forced to", just because that saying is true doesn't mean it should be. I want well thought out considerate changes that help all Americans. I don't see that happening with either candidate, but I'll take my chances with the Maverick, because that is "just how I roll".

Now back to your regularly scheduled programming.

Just my 15%

Thursday, August 28, 2008

What Are you Doing This Saturday?

If you have some time available this Saturday, I will be a guest on the weekly radio show eBay & Beyond: Basics To Business. This is an Internet show that will be replayed throughout the week, but we will be "Live" on Saturday morning to take your calls.

The show begins at 10:00 AM EST so you "Left Coasters" will have to get up pretty early. The first guest will be Doug Minnick from Overstock.com and then I'm scheduled for 11:00 am EST but make sure to listen in to the whole show.

We will be taking calls by phone and Twitter, so if you have time and have questions Saturday will be your day.

See you on Saturday August 30th at 10:00 AM EST www.basicstobusiness.com, Toll free call in number is 866-357-7746 and there is a live chat board available on the site in addition in case you can't twitter.


Just my 15%

My Twitter Plan to Take Over the World!

Okay, maybe not take over the whole planet, but possibly a small slice of the Internet. For those of you who are Twitter Virgins out there, you may need to consider joining in.

The folks at Twitter haven't quite figured out how to make money at this, but it is one very useful tool for a blogger like me and IMO anybody who does business online. Since I've begun actively participating on Twitter, I've made quite a few new friends and business contacts. My circle of influence is growing.

Here's how Twitter works:
  • Create an account at www.twitter.com
  • Make your first post - most people just type "setting up my twitter account"
  • Follow me: go to www.twitter.com/rksmythe and click on the follow button below my "ugly mug"
  • Follow MyBlogUtopia account where I list my posts and have added my Reader feed. My Reader is basically the stuff I find of interest on the Internet each day, mostly regarding ecommerce.
  • What do you talk about? Well, just share what you are doing in regards to work, family, play, your online business, hobbies, etc. Heck, I found a style coach on Twitter, well actually I just made her my style coach and she went along with it.
  • Here are some of the folks I follow, so you can get an idea what kind of stuff to write about: colderICE, andotherstuff, zappos (my twitter mentor), redINKdiary, ebayandbeyond, Biddy, Scott_Pooler, vpgames and the list goes on.
  • If you want to reply to somebody's comment than just click on the arrow under the star on the right hand side of the comment, or you can just add the @ symbol in front of their user name.
  • Try it, you may like it. I believe it is an essential tool for bloggers to connect with their readers but it can also be valuable to online sellers.

One story that illustrates the power of Twitter: I was planning to go to San Jose to visit the folks at eBay regarding changes to the site, so I decided to drive instead of fly, mainly because I wanted to test the power of Twitter. While I was sitting in traffic in LA, I tweeted (from my cell phone) that I was going to be in Santa Barbara around 7 pm and I was looking for a recommendation for dinner, I wanted Mexican food. Well, not more than 20 minutes later I got a direct message from vpgames suggesting we meet for dinner at El Paseo and he gave me directions and everything. I arrived in Santa Barbara at 7pm met with vpgames and had a great conversation over dinner.

When I arrived at eBay, several people commented on the fact I had driven and mentioned they had followed my trip on Twitter.

Twitter is a good tool for me to get up-to-date information and news and keep in touch with readers, friends, business contacts, etc. I currently have 245 followers on my main Twitter account and I'd love more.

Just my 15%

My Podcast Interview with ColderICE about Amazon

Earlier this week I had the opportunity to speak with John Lawson, the owner of 3rdPowerOutlet.com. He is also known as ColderICE on Twitter and and he created a podcast of the interview, which you can find here.

I know, I've been doing a lot of these recently, but I enjoy the process and as long as folks keep asking, I'll keep accepting -- you have to "make hay while the sun shines," right?

In this podcast we switch things up a little and discuss what I'm doing with FBA (Fulfillment by Amazon) and some other stuff happening in the ecommerce biz. Though there will almost always be something about eBay in everything I do, the focus of this podcast is not eBay.

Please use the comments section on John's site as well as here at MyBlogUtopia.com to tell me what you think, ask questions or make suggestions about future topics. I think I'll be doing more of these in the future.

Just my 15%

Wednesday, August 27, 2008

Consider FBA (Fulfillment by Amazon) This Christmas!

As you make your plans for the 4th quarter of 2008, it might be beneficial to take a look at Fulfillment by Amazon this holiday season.

I've been using FBA for almost a year now and have zero complaints. Amazon's service frees me up to do other things and I actually take home more money than if I shipped the items myself.

I would recommend you at least test the service this holiday season for several reasons:
  • With FBA, customers get access to all of Amazon's world class services (Prime, Super-Saver Shipping, Gift Wrapping, etc.)
  • You can ship all the way up to Dec 23rd for arrival on Christmas Eve. When I ran Glacier Bay, we didn't offer any expedited services, so we had to cut-off Christmas orders by the 18th of Dec. each year. With FBA, your customers can order on Dec. 23rd for delivery on Christmas Eve -- that is 5 more days of sales.
  • You can charge more for the product and still get the sale.
  • If you are an eBay seller you are fully aware of the customer service issues that dominate the holiday season. Well, if you use FBA, Amazon handles the customer service for you. No need to spend your days before Christmas answering emails from customers wondering where their product is.
  • FBA saves you money and exposes your product to a completely different customer base on Amazon. Prime members cannot buy from marketplace sellers without having to pay extra for shipping because the seller ships the product. Only FBA items are eligible for Prime members.

Here is how everything works on a standard DVD using FBA as compared to shippig the item yourself. Your costs will vary depending on the type of product you sell.

Self-fulfilled DVD for a seller with an office/warehouse and staff:

  • Sale price - $10.00
  • S&H reimbursement from Amazon - $2.98
  • Total revenue: $12.98
  • Amazon commission 15% on the sale price only = $1.50
  • Amazon variable fee per DVD $0.80
  • Avg cost to ship a DVD, including DC and packaging - $1.80 estimate
  • Now add up all of your monthly overhead that is directly related to fulfillment and customer service and divide it by the avg.number of items shipped per month. At Glacier Bay that per item cost for me was: $0.45 and I had to ship a lot of product to keep that number from getting to high.
  • Total Net Revenue: $8.43

FBA fulfilled

  • Sale price - $12.97 (I beat the lowest total price by one penny so I show up at the top of the list) With FBA there is no S&H reimbursement.
  • Total Revenue: $12.97
  • Amazon commission 15% = $1.95
  • Amazon Variable fee - $0.80
  • FBA Handling fee - $0.50
  • FBA weight based fee - $0.07
  • FBA warehouse fee - $0.01
  • Avg. cost for in-bound freight to Amazon warehouse (Including direct labor @ $8 per hour) - $0.16
  • Total Net Revenue: $9.48

The savings for using FBA over self fulfillment in this example is $1.05 and I do not have to worry about customer service, returns, employees not showing up for work, warehouse space, utilities, benefits, payroll, etc.

This is of course a best case scenario with an ideal product, so I would love it if I could get some feedback from readers who sell heavier, bulkier items. I'm not promising anything but if I can get some info, I may create a Google Spreadsheet so you can determine your own costs.

Also for companies that are in the middle of a warehouse lease, or sell through multiple channels there are other issues to consider, but I can't see any reason you would not test FBA to see if it can improve your business.

So in a nutshell:

  • FBA gets my product in front of buyers I wouldn't have access to any other (Prime, Super-Saver).
  • Lets me ship all the way up to Christmas.
  • Saves me money therefore makes me more money.
  • Saves me time and hassle. No more running to the post office or answering emails.
  • I can concentrate my efforts on getting product, which is what I'm best at.

Why wouldn't you at least test this? Fulfillment by Amazon

One more thing. Regular MyBlogUtopia reader and Twitter friend Cliff Aliperti has a fantastic take on Amazon FBA, warts and all. I recommend his post highly and I also recommend Scott Pooler's Trading Assistant Journal for great ecommerce info.

Just because I haven't had any issues with FBA doesn't mean it is always "peaches and cream". In fact Cliff started small using the Easy Sell program and thought the costs were high. I hope my Amazon readers pay special attention to some of his issues.

Just my 15%

Getting Ready for Q4

Okay, eBay has made their announcements and so has Amazon (oh that's right they haven't said anything). So now sellers need to get down to work.

As an online seller, you get paid for selling product, not debating Feedback, DSRs, INRs, NPBs and a host of other acronyms. Sure, you have some very valid concerns about the future of eBay and the changes that have been made this year, but it is now time to concentrate on your business, or more accurately on the part of your business you can control.

Leave the protesting and complaining for January of 2009. Take a break to concentrate on the most important things. Commit today, to fine-tuning your business for the 4th quarter. If you sell on eBay do your best to come up with a business plan through the rest of 2008.

What are your strengths? What are your weaknesses? Don't change your business because eBay wants you to, change your business becasue it will make you more successful.

I'm not really a "How-to" guy (Skip McGrath is much better at that than I am) but I'm going to make some suggestions to help you develop your 4th Quarter 2008 plan on eBay:

First off, if you sell on multiple channels, I would suggest you button-up the final touches to your Amazon, Overstock, Buy.com and web site plans. More than likely, you will have a good feel for what you need to do with each of those.

Now look at the recent eBay changes and develop your plan for the 4th Quarter:

  1. Develop a listing strategy for your eBay business and test it during the early days of the new fee change. Take a good look at your inventory and identify what product is best suited for Auctions, for the new 30-day FP listing and lastly for Stores; yes I said stores.
  2. Tread lightly with auctions during the early days of the fee changes, make sure you have a good feel for the way the new Best Match works before committing to an ambitious auction listing strategy.
  3. Next, identify the items in your inventory that sell at least once a month and add them to your new 30-day FP CORE listings. eBay says they will surface the most successful listings, so make sure each listing has plenty of inventory. Do not throw the whole kitchen sink into CORE because you will just be waisting money on a good number of those listings.
  4. Put the rest of your inventory in stores, so it is available for the occasional buyer or the one who wants to add something to their auction or FP purchase.
  5. Identify the things that are working and maximize them -- stop the stuff that that doesn't work.
  6. Be aggressive with your pricing on the items that sell well and less aggressive with the long-tail items. Use the same strategy Amazon does -- fastest movers = lowest prices. With 30-day listings you can play with the pricing throughout the 30-days, so dial in the right amount.
  7. Stop worrying about eBay and start worrying about your business.
  8. Be nimble enough to change things when they need to be changed and concentrate on managing your inventory so you don't have problems.
  9. Fine tune your processes so that they run flawlessly.
  10. Bring on additional temporary staff if needed to help you handle the business (adding staff means you are very busy)
  11. Smaller sellers, make sure you have some support to help you as well.
  12. Lastly, do not do any of this for eBay! I repeat, do not do this for eBay! Do it for your customers and for your family and for your business. Determine right now -- today -- to make your business a success in spite of all the turmoil in the marketplace.

Are you ready for this upcoming 4th quarter? Well you better be, because your success is in your hands.

We can all go back to bitching about eBay in January!

Just my 15%

Tuesday, August 26, 2008

Off Topic: Video on Demand for the Long Tail

I was on twitter this morning, when I noticed a cry for help from @wilsondan in the UK. He was in search of a movie from 1962 called Jigsaw starring Jack Warner. Well, movies are my specialty so I told him I would find it for him.

I did my normal searches and found info on the film, but nothing about its availability on DVD or even VHS. It looks like this film, like 1,000's of others, is just available for the occasional broadcast on TV.

What was interesting about my search was that, not only was Dan looking for this film, so were several others and that got me thinking:

VOD (Video on Demand) has not really taken off like music downloads, mostly because of bandwith issues and the fact that movies are meant to be played on a big screen, not a computer monitor, so why doesn't Amazon use their experience in self publishing for the book business and start doing the same thing for the movie business.

Lets face it many films don't have the sales potential for a large DVD production run, but there are still lots of people out there who would like to watch them or own them, so here is the idea.
  • Allow rights owners to upload their films and specialty videos (the really long-tail) to Amazon's servers for resale.
  • Amazon could make a digital download, or stream available for those who wanted to view it quickly or they could do what they do in the book biz and produce the item as orders came in -- Burn it to a DVD with Amazon packaging and ship it to the customer.

The studios still have a huge list of films in their deep catalog, that have never been released on DVD, why not do an exclusive deal with Amazon for VOD on these titles? No need for a big production run, marketing campaign and lots of bells and whistles just upload the films to Amazon's secure servers and collect the money on the sale. Instead of selling 1,000 units of one film they could sell 1 until of 1,000 films. Since the costs of storing the item on a server is so low, volume for any particular item wouldn't matter. The price could be higher because these are low demand items and the sales data could be used to gauge interest in the film for a possible DVD release.

They could also link to the download from the IMDB database for a quick purchase. In fact Amazon has all the search query data from IMDB, so they could even solicit certain films with lots of searches.

Anyway, just a little off topic idea, now back to eBay bashing :)

Update: Well, ask and you shall receive. After posting this I was contacted by one of my new best friends at Amazon, to tell me that they did have a service like the one I suggested; called CreateSpace.com. In fact "just recently, MTV agreed to use CreateSpace DVD Demand Technology to offer exclusive content on Amazon.com."

See I've got some great ideas, sometimes others get there before me though.

Just my 15%

eBay Changes Webinar - Aug. 27th 2pm EST

Scot Wingo and his ChannelAdvisor team are going to be holding a Webinar tomorrow to discuss the recent eBay changes. These webinars are always very informative and you won't want to miss it.

So get Scot's 15% on the new eBay changes, tomorrow Aug 27th at 2pm EST.


How do you like my new tagline. Probably a bit to much huh?

Just my 15%, plus 15 cents for listing, plus PayPal, minus FVF discount if you qualify.

ChannelAdvisor Launches StoreAdvisor Premium

Just in time for Christmas!


Research Triangle Park, NC– August 26, 2008ChannelAdvisor, the leading provider of e-commerce channel management solutions, today announced StoreAdvisor™ Premium, a powerful e-commerce storefront that allows online retailers to design customizable, search-friendly sites that enhance the shopping experience and lift conversions. Fully integrated with MarketplaceAdvisor Premium, a consolidated interface helps sellers better manage their businesses and experience stronger growth across all e-commerce channels.

This new offering in part of a natural progression for ChannelAdvisor as they develop tools and applications to help online sellers.

"Multi-channel retailers want to focus on growing their businesses instead of keeping up with website technology,” said Scot Wingo, CEO of ChannelAdvisor. “With StoreAdvisor Premium, they can rely on our expertise to build the shopping experience their customers want and integrate it with MarketplaceAdvisor Premium’s unified inventory system to get the same ease of use, scalability and reliability they’ve come to expect from us.”


Here is a great example of what you can do with the new StoreAdvisor Premium

Just my 15%

Monday, August 25, 2008

So, How Did eBay Bucks Work?

I was looking through some stats for the blog and noticed several people recently visited my post on eBay Bucks, that I wrote back in May. It occurred to me that the eBay Bucks test period was supposed to end in mid-August and today was the 25th.

I was surprised, that I hadn't heard or seen anything written about the program. According to the eBay Bucks FAQ

You can earn rewards from May 15, 2008 to August 14, 2008. Note that only purchases paid for after enrollment are eligible ...

... For users that earn rewards, eBay will email a reward coupon which includes a code to redeem rewards. Reward codes will be issued before August 22, 2008. Users may also access their reward code by logging into http://rewards.ebay.com.

How do I redeem my reward? You will be emailed an eBay Bucks coupon once your reward is ready before August 22, 2008.

To redeem your reward, just:

  1. Go to www.eBay.com and log in with the User ID you used to sign up here.
  2. Start shopping. Be sure the seller accepts PayPal.
  3. Pick something you love with a value close to that of your eBay Bucks. (You may use it one time with a single order and a single seller. Any balance is forfeited.)
  4. Pay for your item with PayPal before the expiration date: September 21, 2008 11:59:59 PM PST.
  5. In eBay checkout enter the unique redemption code printed on your coupon.
Have any of you MyBlogUtopia readers used the eBay Bucks program? I would be interested to hear your thoughts. Just curious.

Just my 15%

Sunday, August 24, 2008

Startup Nation Podcast - Kevin Harmon and Randy Smythe

Join Kevin Harmon from Inflatable Madness and yours truly as we wax poetic on all the changes happening at eBay. Breaking News: eBay - It's a Whole New Ballgame

I'm starting to like this podcasting thing.

Just my 15%

Saturday, August 23, 2008

If Auctions are Dead - eBay Killed Them.

I feel like a salmon swimming up-stream fighting against the current. I don't think auctions are dead ... yet, but, we may be eulogizing them soon, just like Adam Nash eulogized eBay Express.

If Auctions are dead, than the idea that I am going to present won't have any impact, but it also doesn't have any downside. If Auctions are not dead, just held captive by the Fixed Price hordes, than by not even considering my idea, eBay will be turning their back on their brand and a very profitable business.

The premise: Auctions are a niche and should be treated like one. Fixed Price is the dominant ecommerce standard and is what eBay should focus on to grow, but they don't have to sacrifice Auctions to do it.

There current strategy will end up sacrificing auctions, because they don't have the balls to make the hard choices. eBay Express failed because of execution, but it wasn't the wrong idea. It wasn't the version of eBay that should have been spun-off.

Here are three reasons why splitting the site up makes sense:
  1. The site is made up of small sellers and big sellers, auctions and fixed price, Hard to find unique product and commodity product. Management is trying to be all things to all people and that just won't work. Splitting up the site makes room for growth for each separate group.
  2. The "noise" will abate as soon as they split off eBay Classic. The traditional eBay shopper and buyer will once again feel comfortable at their "new" auction only site and the new convenience shopper won't have to be bothered looking at all those auctions.
  3. If auctions are dead than you can't hurt them anymore by separating them from eBay.com. But, if they aren't dead you open up room to grow once again.

Adam Nash and I have discussed this and there is a disagreement. I believe that my idea of eBay Classic is much different than the creating eBay Express. Adam, beleives eBay Classic will face some of the same challenges.

So, I've included Adam's reasoning for why eBay Express failed and I will add my 15% in bold as to why that issue will not affect eBay Classic.

  • Branding. It was a tough decision. If you don’t use the eBay brand, you lose any possibility of the positive affiliation and traffic that comes with a known consumer parent brand. But, if you use it, you are also stuck with the negative attributes. eBay means auctions to most people. We ended up going with eBay Express because in the end, it was eBay inventory and we expected traffic to flow from the eBay association. It didn’t, and it also didn’t generate any real unaided awareness for us.

    eBay Classic on the other hands benefits from the eBay brand. By adding Classic to the name it also sets it apart from the "New eBay" and helps the Fixed Price marketplace separate itself from auctions.
  • Traffic, traffic, traffic. One of the unanswered questions was how to drive sufficient traffic to the new site. We had initial stabs at this problem, but eBay was still in a phase where it believed in buying traffic. TV, Catalogs, Email, Paid Search. It doesn’t take an Internet genius to realize that buying traffic is horrendously expensive, and frankly, ineffective. Our biggest course correction post-launch was a crash course on how the rest of the e-commerce world looks at traffic generation. Figuring out how to drive traffic in volumes to the site, and build organic traffic in the long term became our 24×7 focus.

    eBay Classic, will not have the same needs to generate traffic. The auction business is already a huge part of eBay Marketplaces so those buyers who want that experience will naturally migrate there. eBay Express was a new experience and required retraining. If eBay Classic is created than eBay.com can become what management wants it to be and the brand will change. All of the organic traffic will still come to eBay.com, those looking for auctions will find them everybody else will just get fixed price items in their search results.

  • Inventory and merchandising. It may be hard for most people to believe this, but eBay at the time was incredibly under-developed on many of the retail basics of merchandising, inventory selection, and promotion. Why? Well, because eBay.com isn’t actually a retailer of anything. We realized post-launch that we needed to develop that expertise, quickly, even to the point of understanding sourcing, distribution, and product selection. Having 10 million+ products is great, but it’s no good if you don’t have the right products at the right price.

    eBay Classic doesn't demand/require any additional resources or learning, just set it free and it will take care of itself. Management is already committed to the Fixed price marketplace and that is where the resources will be focused. Basically, if you split things up, one can grow organically and be very profitable and Jeff King and his team won't have to try and figure out how to work auctions into the new search.
  • International. We designed and built the site, from the ground up, to meet the different needs of the US, UK, and Germany. In fact, I even spent time on concept versions for India, China, and a host of other countries. There were some fundamental disagreements about which model would be most effective, so we built a platform to handle them all. In retrospect, we should have done the US only, and only expanded internationally once we nailed the basics. The distraction, debate, and expense was counter-productive, and in the end, a mistake.

    eBay Classic doesn't have that problem, it is already available in most if not all International markets. For those markets that don't have a sizable auction business you may not roll it out, but for many it will be just like in the US -- Split it up and roll it back.
  • Expectations. There was so much enthusiasm internally around the various aspects of the project, and it was impossible to contain expectations rationally. The reality is that building a consumer brand and a billion dollars in sales doesn’t happen overnight, and it isn’t cheap. Look at how long Amazon has been stretching to build it’s third party sales efforts. We believed we could cut that time in half, but rationally, that was still a minimum 5+ year effort. In the best of times, that kind of effort requires a company with long term focus and commitment. And as we all know now, 2006+ were not the best of times for eBay.

    eBay Classic won't have high expectations, remember auctions are dead; so any growth that comes from eBay Classic will be exciting. It is also already close to a $30 Billion business. Tell me how many companies can say that.

One other thing, that Adam didn't include in his eulogy. If eBay were to spin-off eBay Classic then 90% of the "noise" would end. The traditionalists would have what they want and the big sellers and commodity sellers would have what they want and the complaining would cease.

The "New eBay" could do the things necessary to compete with Amazon while Classic eBay would move along at its own pace, but still be very profitable for the company. Sellers would stop complaining (well okay that might not happen entirely) and everyone could concentrate on improving their business.

Alright, I feel like Don Quixote tilting at windmills, but I'm opening myself up to those of you who think I'm loony. Before you tell me what you think, answer this question. What is the downside to splitting off a business that everybody in the world says is a fad or dying?

Just my 15%

Friday, August 22, 2008

My Podcast with Ina Steiner - eBay Changes 8-20-08

If you are interested in my 15% on these recent changes and want to actually hear me talk about them, then go to http://podcast.auctionbytes.com and click on the top podcast.

I have to warn you it is longer than most podcasts (18 minutes) so make sure you've had your coffee. We don't cover all of the changes but I think it still might be interesting for you. Please no critiques of my picture or radio voice; I can be very sensitive :)

Just my 15%

Thursday, August 21, 2008

My Day in San Jose

It was a pleasure for me to be invited to eBay's campus this past Tuesday, for a briefing on the changes coming to eBay -- I did leave bread crumbs just in case I was "disappeared".

I'd like to thank Melissa for shepherding me and Skip McGrath around from meeting to meeting and it was good to meet up with the PR team for coffee. Usher Lieberman moved around alot that day, but he was present during the key briefing with Dinesh Lathi, VP of Seller Experience. He even provided cookies.

When I arrived at the campus, I was expecting maybe an hour meeting about the changes and then a "see you later, but don't write anything until 9pm", instead we received very in-depth briefings from Jeff King who heads the Finding team and Max Mancini, who heads up the developer team as well as some time with Griff and Todd Lutwak.

All-in-all much more than I expected and everybody was very nice.

I'm going to spend a little time over the next couple of days, discussing what Finding 2.0 really means for eBay and the huge bet they are making on this search as the way out of the wilderness, so check back tomorrow for more.

I've had quite a week really. Last Thursday and Friday, I visited Amazon and met with several groups on the merchant side of the business and then Tuesday I spent the day at eBay, quite an eye-opening experience comparing and contrasting both companies.

We are in for a wild ride this 4th Quarter.

Just my 15%

A Eulogy for eBay Express!

I've already added this blog post by Adam Nash, former Director of eBay Express, to My Blog Utopia reader, but I felt it needed some additional exposure.

It is a great post and presents a very interesting look at the inner workings of eBay. Please take time to read the comments as well, many of those commenting worked on the project while at eBay.

With all of the changes being made to eBay today, it is clear to me that the lessons learned from the failure of eBay Express may be going unnoticed.

A Eulogy for eBay Express

Just my 15%

Sellers Discuss eBay Changes on Podcast

John over at 3rdPowerOutlet.com just hosted a podcast on the recent eBay changes and there are some interesting comments. A number of sellers and bloggers participated in the call and it is well worth the listen. Here is the link

Just my 15%

What Would Happen if eBay Sellers Didn't Take the Bait?

Okay, bear with me here ad I reason this out.

Media sellers seems to be the most concerned about these changes, but they shouldn't as long as they can adjust their model and collude with other media sellers. Sorry, "work with" is so much better than collude.

Here's how it works:

The long-tail items stay in stores where you pay $0.02 less to list and 3% less on the back end. Only put product in core that you know sells regularly or is high ASPand keep the inventory updated; daily if needed. You don't want a listing to end because the recent sales history ends with it.

Don't put all 2 million media items in FP core. Out of 60K DVD's available, you probably regularly sell 5 - 10K different titles in a 6 month period, only list those titles in CORE that you have a good sales history on and keep the rest in stores.

The problem with this approach is that there will always be one guy who breaks from the crowd and lists there entire catalog in CORE. Once that happens everybody else has to do the same thing and all hell breaks loose.

Just my 15%

eBay Management - Where's the Demand!

These latest announced changes are meant to shift a large amount of inventory that sits in eBay stores, up "above the fold" into CORE, where the vast majority of eBay transactions happen. I'm all for that thinking.

Stores have always under performed because they are so far down the search list, or often not in search at all. Now with the fee changes for Fixed Price items there is no reason to list items using SIF (Store Inventory Format).

So all of that product, that has been on eBay for years will now get surfaced in CORE. Well this is where eBay earns their money. Sellers pay for exposure and eBay's main job is to stoke demand for product that sellers sell.

Soon the supply will be there (in CORE) but will there be enough demand? Based on these moves, eBay managers must believe there is enough demand on the site, or they wouldn't make this move.

It's like in the Wizard of OZ when Doorothy and crew went to see the Wizard and they met this booming voice with smkoe and fire, but when you pulled back the curtain it was this mousey little man runninh things. The changes that eBay has made here will pull back the curtain on the demand on eBay. I hope they are ready for the potential fallout.

Buy.com has been in CORE with more than 800,000 listings and has a 2% STR (sell thru rate) which is comparable to the Store STR for most other sellers and Buy.com is dominating their categories.

Media sellers are getting a sizable increase in fees to move to the new listing strategy. In stores they paid 3 cents and 12% FVF, now they will pay 5 cents and 15% FVF if the demand is not there and they don't see a huge increase in STR from what they experienced in Stores this will end the life of many of these business on eBay.

If eBay does not stoke demand for all of this new supply, these changes will be an unbelievable failure.

eBay, demand is your job. You better start working on it now!

Just my 15%

Wednesday, August 20, 2008

eBay Puts Store Items Back in Search!

Yep, you heard that right! No, the announcement did not state that store listings would be in search, but the truth of the matter is, the changes made today will force sellers to list their store items in CORE or risk zero exposure. (Thanks Nadine for pointing this out)

Let's look at media items:
  • The vast majority of eBay media items are listed in the Store format today, where a $0.03 30-day listing fee and a 12% FVF are the cost.
  • The new 30-day FP listing will cost $0.05 for sellers who list with the catalog and 15% FVF, which is a substantial increase over current store fees.

After Sept. 16th Store items will have even less exposure than they do now, so it will now be dead money to list in the Store format unless of course nobody changes their listing strategy (not likely). The big unanswered question is; will the exposure increase these items will get in CORE be worth the additional fees?

I will have to take a wait and see approach with this. In theory, CORE items get a lot more exposure than store listings, but when all of those store listings are now in CORE the STR (Sell-thru Rate) will decrease substantially and it will take time to determine if it was worth it or not. If the STR is the same as it is currently with Stores than you are going to have some very unhappy people.

Media sellers are busy crunching the numbers and trying to figure out if the $3 S&H cap can work for them. Many of them currently charging $5.95 for S&H, so the additional $2.95 is going to have to come from somewhere. It will most likely come from an increase ($2.95 each) in the price of product. I'm skeptical that eBay customers will go for the higher price of product, but eBay told me the data supports it.

So after sleeping on these changes over night, I am starting to get concerned about what this means for Media on eBay. It will be a huge fee increase for media sellers, if the value of moving the store inventory to CORE doesn't increase STR and even then it may be a wash.

If eBay doesn't do anything about the demand problems on the site, none of this will matter

Just my 15% Updated, so as not to short change my readers.

Tuesday, August 19, 2008

My 12% is Now 15%

Just like the price of gas even my opinion sees a price increase. So, in honor of eBay's recent change in FVF for media items, I've decided to change my tagline. From now on you will get my 15%.


Just my 15%

Update: Do The Math! Are eBay Changes Better for Your Business?

I've made an update to this post, to better compare the rates. Changes are in bold.

As I look into the numbers behind the eBay fee changes, it is clear they are decidedly less expensive in some categories, but are they truly less expensive than Amazon for media?

Lets say an eBay seller wants to list 10,000 FP listings under the new rules on eBay and they also list 10,000 items on Amazon. For argument sake each item is $10 plus $2.98 for S&H. Total revenue per sold item is $12.98. We will also say they sell 1500 items in a month from each site.

Listing Fees and Subscriptions.
  • Amazon - $39.95 to list (Pro Merchant fee) - Cost per sold item is $0.03 ($39.95 / 1500)
  • eBay - $500 to list (10,000 x $0.05) Cost per sold item is $0.33 ($500/1500)

FVF is the same on both sites so that is a wash, so each site charges $1.50 per item in FVF.

On eBay the payment side of the transaction is separate, so if they use PayPal and have $2.98 S&H they pay $0.59 in PayPal fees (2.2% plus $0.30 fee) I changed to 2.2% for PayPal because a seller listing 10K items is more than likely selling enough to earn that fee.

On Amazon, you would pay a $0.80 Variable Fee.

Total cost per item for Amazon - $2.33

Total cost per item on eBay - $2.42 (this is the updated cost and does not reflect FVF discounts earned)

Based on eBay's published info from May, regarding Power Seller FVF discounts, 34% of Power Sellers earned a 15% discount on their FVF which in this comparison would save $0.23 cents making the eBay fee lower than Amazon.

So the revised eBay cost with the earned FVF would be $2.19 as opposed to Amazon's $2.33 or a savings of $0.14 per item.

So in this comparison eBay has lower fees than Amazon if you are one of the 34% of sellers that received the 15% discount.

Do the Math!

Just my 12%

eBay Announces Big Changes! Drumroll please!

I spent the day at eBay's San Jose Campus (quit laughing) and here are the changes that will be announced on Weds to the public.

If you are a Blog Utopia reader, feel confident you are one of the first to get this info. Though I think Ina Steiner and Chris and Sue at Tamebay have the info as well.

There are a lot of changes and rather than give you my 12% on each of them, I've decided to just list them, so that the info can get out quickly. I will post a follow-up with my 12% probably later this evening or tomorrow morning.

Fees: (Changes go live Sept. 16, 2008)
  • No changes to Auction Format fees. (All categories)
  • No changes to Store Format fees. (All categories)
  • Fixed Price items will now have a 30-day duration with GTC (Good Till Canceled) in CORE for a flat $0.35 per listing. (Exception is Media)

    Example: One FP (Fixed Price) listing with a qty. of 100 Ipods will be available for 30 days in core for only $0.35. Yes, that is correct, start price and quantity no longer add to the cost of a Fixed Price listing. With the current pricing you would have to pay $4 for a 7-day FP listing.
  • The Fixed Price FVF may go up or down, depending on the category. Each category has a different FVF percentage.

    Example: Computers went down to 6% FVF, Consumer Electronics went down to 8% and Media went up to 15%. I did not get access to the changes for each category in time for this post. These FVF changes are on Fixed Price items only.

Media Specific changes:

  • Media listings (CDs, DVDs, Video Games, Books, etc.) will have a $0.15 cent 30-day Fixed Price fee, but if a seller lists a FP item with the pre-filled catalog information, it will cost only $0.05 for each Fixed Price listing. (Again no matter what the start price or quantity available)
  • FVF will rise to 15%
  • Shipping and Handling will be capped in the media category.

    Example DVD's and CD's will have a $3 cap for S&H on domestic standard service. (This change will go live in early October. Video Games, Books will have a different cap. Media is the only category with a S&H cap at this time.

Shipping Changes:

Expect to see more promos going forward for the use of Free Shipping, including advantage in search and double FVF discounts on items with Free Shipping -- more details to follow.

Seller Standards:

Beginning Nov. 1st, sellers with a 4.25 rating on any of the 4 DSR ratings will be suspended. According to eBay, this is a very small percentage of sellers.

Payment Changes:

Beginning in late October, checks and money orders will no longer be an acceptable method of payment on eBay. Sellers can use a Merchant Account, PayPal or other acceptable payment method. (Don't even ask)

Finding 2.0 Changes: (I'll post more about this later)

  • Auctions will get their own Best Match sort with a heavier weighting on ending soonest, in addition to the trust factors and S&H.
  • Fixed Price listings will have their own Best match sort with limited to no weighting for ending soonest and the addition of Recent Sales History.
  • The two formats will still be displayed on the same page, but will no longer be sorted the same way. Basically, the current Best Match was not ideal for both formats.

Other bits of info:

  • Classic Search will be replaced completely by Finding 2.0 some time in 2009.
  • eBay Express will be shut down (no timeline).

I heard a lot of stuff today, so forgive me for the "Plain Jane" approach to posting this. I felt it was better to get the info out as quick as possible and it will take some time to analyze these changes.

I still haven't had time to do the math, but at first glance I can see some positives in these changes -- I know, I know, I must have spent too much time in the Sun.

There is a lot to go through, so I will follow-up this post shortly.

Just my 12%

Terapeak to Take Over for eBay Marketplace Research!

Just a quick bit of info while on the road.

Victoria, BC (Aug. 18, 2008) – Terapeak, an eBay Certified Provider, today announced that Marketplace Research by Terapeak is being offered as an alternative for eBay Marketplace Research, which eBay plans to retire as of September 15th, 2008. Available to all existing eBay Marketplace Research subscribers, and to all eBay users going forward, the tool will be accessible from the eBay website, and Terapeak will provide dedicated customer support.

Fred Speckeen, CEO of Terapeak/AERS, says, “The transfer of research responsibilities to Terapeak reflects our longstanding business relationship with eBay, and our company’s commitment to providing the best market research product possible. Although most eBay sellers know us for our Terapeak product, AERS was the first licensee of eBay data, and also provides e-commerce analytics based on eBay data to the larger Fortune 1000 community. We are proud and excited to be invited to offer Terapeak as an alternative to eBay Marketplace Research.”

“Millions of eBay transactions are analyzed and processed by AERS systems each day,” says AERS CTO Andrew Sukow. “We continue to improve our processes, our systems and the Terapeak product in order to help eBay sellers maximize their profit potential.” Marketplace Research by Terapeak will provide important and useful research for eBay sellers based on completed eBay listings. Terapeak plans to extend the range of reports and features that were available via the eBay tool. These new features include a greater data history, including up to two years of category trends, seller-specific searches, and dedicated customer support.

"We are pleased to join with Terapeak to offer our customers an alternative service for eBay Marketplace Research," said Laura Della Torre, Senior Manager, Seller Platform at eBay. "We have been working with Terapeak as a Certified Provider for several years and believe they are well suited to provide a research product that meets the needs of our customers."

Just my 12%

Monday, August 18, 2008

My Blog Utopia Roadshow!

I am supposed to be in San Jose tomorrow for a meeting, so I decided to drive rather than fly and make a roadtrip out of it. I will be traveling this evening and will be in San Jose until Weds. so I would love to meet up with any of you readers who live in the bay area or along route 101.

You can reach me at rksmythe at yahoo if you want to set something up or follow me on Twitter to see where I am along the trip.

Look for a special blog post on Weds morning.

Just my 12%

Quiet Before the Storm!

This is the week we should all hear about the changes eBay has planned, more than likely they will be major, though I would be surprised if they are revolutionary -- perhaps they will announce eBay Classic :)

Over the last few days we've heard about the possibilities of Free Listings and it is clear that all the signs are there, but at this point there aren't any details to back up that speculation.

I do know this, we will here something this week. So buckle your seat belts we may be in for a wild ride.

Just my 12%

Thursday, August 14, 2008

Travel Day Today!

Getting ready to head out to the airport, so I'm not going to be blogging today and tomorrow but you can still follow me on Twitter. Of course if I hear anything of importance or get a chance I might still pop in for a post.

I will be enjoying a couple of days in the great northwest.

Just my 12%

Wednesday, August 13, 2008

eBay has Another Crown Jewel!

I did find something positive to write about concerning eBay!

I'm sure when you think about eBay Crown Jewels the first thing that comes to mind is PayPal and that certainly is the case. PayPal is the industry payments leader. But, there is another Crown Jewel in eBay's collection and that is StubHub.com

StubHub was acquired 2 years ago (January of 2007) for $307 million and has been run as a separate company for the entire time it has been in the eBay fold.

Rather than trying to integrate StubHub into the eBay.com platform they have chosen to manage the business as a separate brand and the results are amazing. In fact I just recently saw a TV commercial for StubHub and it looks like the TV campaign will continue.

StubHub's revenue and profit numbers are not separated from the marketplace business segment, so it is difficult to get a read on how much the business generates annually, but from everything I can gather it is performing very well.

In fact if eBay were to take StubHub's numbers out of their marketplace GMV and profit numbers it might paint an even bleaker picture of eBay.com (Sorry I couldn't stay positive for the whole post).

StubHub President and General Manager Chris Tsakalakis and his team have done an exceptional job in growing StubHub. Chris formerly grew the eBay Stores business into the #1 online stores platform in the world - part of me wishes he were still there.

The success of StubHub should be a lesson to eBay managers on what to do with their business assets. Set them free and let them grow. I would hope that they would consider spinning of the store platform and the auction business and running it like they do StubHub.

Just my 12%

How Amazon is beating up eBay!

Click on the title to go to the MSN Money story!

I've covered most of the information found in the article in previous posts, but wanted to comment that this article is part of the perception battle that eBay is facing. All the news about eBay is bad and all the news about Amazon is good.

Sure, MyBlogUtopia fits squarely in the negative about eBay camp and I would be glad to write positive pieces about both eBay and Amazon unfortunately. I just can't find much positive to say about eBay.



Just my 12%

Tuesday, August 12, 2008

Perception is eBay's Reality!

It is my belief, that the eBay brand and the perception of eBay by the public, is a major factor in the struggles eBay management is currently facing. They appear to want to morph into a traditional online retailer (Amazonification) without taking into consideration that their 84 million active users don't shop eBay for that type of product or that type of experience. And, those folks who don't shop on eBay currently have a perception of eBay that is not consistent with that type of retail experience.

eBay is known for used items, hard-to-find stuff, One-of-a-Kind treasures, long tail items, deep catalog product, antiques, one man's garbage is another man's treasure items, grill cheese sandwiches with the face of Jesus, collectibles, celebrity items, auctions, etc.

Sure, there is new product available on the site, but it is usually out-of-season, grey-market, surplus or liquidation product and available for a lot less than at traditional marketplaces and retailers.

eBay is also known for fraud, fakes and knock-offs, not-as-described product, surly sellers, poor customer service, high S&H and you can fill in the rest.

So how do you effectively introduce a completely "New eBay" without changing those perceptions of the brand? IMO, it is impossible -- Just adding new product from Buy.com and other Internet Retail 500 companies won't change what eBay is. eBay management needs to change the brand and the perception of what eBay is and that takes advertising and PR and lots of money -- they have the money, but they won't spend the money.

So, if eBay is not going to spend the money necessary to change the perception, why don't they concentrate their efforts on improving what they are good at, rather than trying to become something they are not good at?

If eBay mangers truly believe that the future of eBay is in this new type of product and relationships with online retailers, then they need to spend money. The problem is they can't spend the money without making less profit (in the short-term) because right now there isn't enough growth to pay for the ad campaign.

Why is Amazon considered to be firing on all cylinders and eBay considered to be spinning their wheels? Why is eBay's stock thought to be under-valued and Amazon's stock thought to be over-valued (based on fundamentals)? In a recession/slow down, why is eBay not growing while Amazon continues to outgrow everybody?
  • Amazon has a long-term plan that is pretty obvious; eBay has short-term plans to make their quarterly numbers.
  • Investors see tremendous upside in Amazon's stock and they see eBay spinning their wheels.
  • Buyers see eBay as a gamble and when you are worried about having enough money to live on, why would you take a gamble on eBay?

Perception is reality! Unless eBay changes the perception of their marketplace, all the changes in the world to search, feedback, seller requirement, bringing on new diamond sellers won't amount to a hill-of-beans.

Just my 12%

eBay Seller Exodus Continues!

And the beat goes on!

Inactive and NARU sellers accounts grew 3% since they were last measured on July 16th according to Seller Dome:

NARU: +3.1%
Inactive 1 month: +3.9%
Inactive 6 months: +1.1%
Inactive 12 months: +2.6%

These are just the numbers of sellers who have ceased selling on eBay, many other have diversified to their own websites or other marketplace sites. In Q2 Amazon announced that seller registrations there increased 18% Y/Y

This will be an interesting trend to follow, especially as we get close to the 4th Quarter.

Just my 12%

Monday, August 11, 2008

Repost - My Experience with Amazon Prime.

This is a repost of an earlier post about Amazon Prime, yes I am lazy and didn't want to rewrite it. I do have one update though; I still Love Amazon Prime - Try it out for One-month Free just click on the promo button on the right side bar.

Okay, I'm jumping the gun here with this post, because I just signed up for a free trial of Amazon Prime on Monday and made my first order Monday evening, so I haven't even received my items yet, but I've had enough exposure to the service to write about it.

Here is my 12%:
  • With Amazon Prime and One-Click turned on, shopping on Amazon is a breeze. In fact I would dare say it was fun. No way, eBay ever comes close to this shopping experience.
  • When shopping with 3P Merchants, I just selected "Eligible for Prime" offers and whola I narrowed down the search to Amazon and one or two 3P Merchants. That number of offers will increase as more 3P merchants sign-up for FBA.
  • I purchased one of my own items and National Treasure 2 with standard 2-day shipping. I was going to choose Next-Day for $3.00, but since I wasn't going to watch the movie until Friday night, why pay the extra $3.00.
  • I received notice on Tuesday, that both items have shipped together and will arrive on the 22nd. They were shipped UPS and I have a tracking number.
  • I have absolutely no doubt that I will receive these items on Thursday the 22nd, just as the email said. The combination of Amazon's World Class service and UPS assures me everything will be fine. If it had shipped USPS I might have a little concern.
  • Now here is the fun part. I bought National Treasure 2 for $22.99 with Free Shipping. My Prime Membership will only be charged if I decide to keep the service after 30 days. I'm going to watch it this weekend and then add it to my FBA shipment on Monday, where I will re-list it on Amazon as Like New for $19.56. I guarantee it will sell within a week of being listed.
  • My total rental is $7.73 after I pay Amazon fees and include the difference in sale price. More than I would pay from Netflix or the corner Blockbuster but well worth the experiment.

Now, I am not a real big shopper but I am looking for a laptop and I normally would get that from Dell. Now that I have an Amazon Prime account, I will have to at least check out the laptops on Amazon --maybe it is time to purchase a Mac.

If I choose to buy the laptop from Amazon, I will save $51 with my Prime membership over a purchase from Dell (with 2-Day service) and $82 if I choose next day service. So I can pay for my yearly Prime membership with a single purchase and have the product by Friday. What a country!

I'll let you know what happens.

Update: I received my order from Amazon today just as they said I would. Both of my items shipped together. I paid no S&H and will turn around and resell these items next week.

As a seller, I could not even come close to offering this kind of service (2-day) at no charge. I'll pay for my Annual Prime membership when I purchase my new laptop this weekend (still haven't made the decision on Mac or Toshiba)

How Much Time Does eBay Have Left?

Sorry for the doomsday title -- I'm getting prepared for the up-coming (late August) announcements about more changes and it has me wondering: If all of these changes do not get the eBay Marketplace business growing again, where does that leave the company?

I've said it many times before; the strategy eBay management has chosen is a big gamble. If it works, there really isn't a huge upside, IMO. If it doesn't work the downside is going to be pretty bad.

For the most part, the changes have successfully kept eBay Marketplaces running in place, but I certainly don't see any huge growth happening.

Questions affecting eBay's future (in its current form).
  • Do the changes give management enough running room to grow the non-GMV businesses and PayPal, to take the pressure off of Marketplaces?
  • Can they pull a rabbit out of a hat and sell Skype for at least $4 billion? (that would give them some running room)
  • If the "economy" is the problem with eBay Marketplaces, then what excuse will they have if Amazon has a great Q3 and even better Q4?
  • How long will investors, sit around waiting for the turn-around?
  • Will the courting of Internet Retail Top 500 merchants save eBay? Who are the next "big guys" to come to eBay and Anchor a category?
  • If eBay has a demand problem rather than a supply problem, will they need to spend more money to stoke demand?

Here's how I see it playing out; no I do not have any crystal ball. If I am wrong, you can find this post sometime next year and tell me I'm an idiot.

I'm working from the belief that the current eBay strategy is wrong, so I already believe it will fail, but I think we are in for a rocky rest of 2008:

  • The next 2 quarters for eBay will continue to show slowing growth and Amazon will continue to grow faster than everybody else - taking share.
  • Margins will be maintained, because management won't spend the money necessary to get growth moving again. If you are changing the way eBay works shouldn't you be letting the world know that this is a new eBay? I haven't heard one word about a new ad campaign.
  • Investors will get tired of all of this and start voting with their shares, as some already have. Opening the door for one more year of restructuring, under a new management team and/or the company will be acquired.

I know I'm going out on a limb about the management changes. It seems unbelievable that the management team would only get a year to turn the business around, but I just can't imagine there is that much rope for this team.

Yahoo investors were calling for Jerry Yang's head 9 months after he took charge and he's a company founder. John Donahoe took over eBay in March but he was in charge of the Marketplace business for 2 years before that.

Unfortunately, I think we are past the point of no return on this strategy, so it is just going to have to play out.

And yes, if you have read my blog in the past, I do have a strategy that I believe will work, but it is too late to implement it now. We will just have to wait until Q1 of 2009 when eBay once again re-organizes.

Just my 12%

Amazon's Third Party Business is $6 Billion!

I came across a blog post this morning that estimates Amazon's Third Party GMV at $6 billion which is roughly 10% of eBay's $60 billion in GMV. I think that is quite impressive since Amazon has half the categories available for 3P sellers, doesn't sell using the auction format (50% of eBay's GMV) and they have 20 fewer countries to sell in -- they also don't sell cars like eBay (Motors) and sell tickets like StubHub.

I wonder how that $6 billion in GMV stacks up with eBay on an Apples to Apples comparison?

---

Now the blogpost went on to assert that the reason Amazon's 3P business isn't bigger, is because their fees are too high:

Amazon’s higher fees and commission rates are the most significant factor holding back retailers from selling more products on the platform. Amazon charges higher initial fixed fees than eBay and has a 13% average commission rate that does not step down as the value of the sold product increases, compared to eBay’s 8.1% average take rate. Based on our discussions with third party sellers, we believe that if Amazon reduced its fees and commissions for selling products, it could meaningfully accelerate the pace of third party sales growth.

I can't really wrap my head around that concept. Amazon's fees are certainly high, but I talk to a wide variety of 3P sellers every day and honestly Amazon fees never come up. Sure, if asked, sellers would say they would list more if fees were lower but that is not the most significant factor affecting Third-Party sales on Amazon.

I contend that Amazon's growth in 3P will accelerate as it expands categories. Many of Amazon's categories are closed or gated, meaning that 3P sellers must be approved to sell in those categories, and there is a waiting list a mile long to get in. Also, Amazon doesn't have anywhere close to as many categories as eBay does, so as they roll out new categories that portion of their business will grow.

It really has nothing to do with fees, sure fees could be lower, but they aren't the reason Amazon's 3P business is a 10th the size of eBay's.


Just my 12%

Sunday, August 10, 2008

Updated: eBay Continues to Have Technical Issues!

eBay has become known as GlitchBay to many users over the past few years. They have been rolling-out numerous changes to the live site for a couple of years. These glitches actually have increased in frequency and really wreak havoc on the "buying and selling experience" on eBay.

Here is a blow-by-blow accounting of the most recent glitches:

***Original: DSRs Displaying Incorrectly***
August 07, 2008 11:49AM PST/PT

Some Detailed Seller Ratings (DSRs) are currently displaying incorrectly. We are working on this issue with the utmost urgency, and expect to have it corrected soon. We absolutely understand the necessity of displaying accurate DSRs for our sellers, and we apologize for the frustration and confusion this may be causing you

***Updated: DSRs Displaying Incorrectly - Resolved***
August 08, 2008 04:17PM PST/PT

Between 11:00am PT Wednesday morning (8/7/08) and 3:00pm PT Thursday afternoon (8/8/08), some Detailed Seller Ratings (DSRs) were displaying incorrectly. The issue is now resolved, and all DSRS are displaying correctly. We apologize for the confusion this caused our sellers, and appreciate your patience while we resolved this issue.


***Original: Incorrect Seller Notifications***
August 08, 2008 12:20PM PST/PT

Some sellers are receiving eBay notifications that their Store Inventory Format listing has ended, when in fact, it hasn’t. In these cases, an item has been sold from Store Inventory, but the listing has not ended; however, the email notification indicates that it has.

We are working to fix this problem as quickly as possible, because we certainly realize how confusing it must be to our sellers. In the meantime, please be assured that your buyers are receiving the correct notifications. Thank you for your patience, and we apologize that this is happening.


***Updated: Incorrect Seller Notifications - Resolved***
August 08, 2008 04:28PM PST/PT

On Thursday night (8/7/08) and Friday morning (8/8/08), some sellers received eBay notifications that their Store Inventory Format listing had ended, when in fact, it hadn't. In these cases, an item had been sold from Store Inventory, but the listing has not ended; however, the email notification indicates that it has. The problem is now resolved, and if you received such a notice, please disregard it, and view the information in My eBay to manage your sales that occurred during this period. Thank you for your patience while we resolved this issue.


***DSRs Displaying Incorrectly - Updated***
August 09, 2008 03:42AM PST/PT

Between 11:00am PT Wednesday morning (8/7/08) and 3:00pm PT Thursday afternoon (8/8/08), some Detailed Seller Ratings (DSRs) were displaying incorrectly. Upon further investigation, it is found that a small portion of the community may still be affected. This should be completely resolved within the next few hours.

We apologize for any confusion brought about by this issue, and we appreciate your patience while we work to resolve it.


***DSRs Displaying Incorrectly - updated***
August 09, 2008 06:00PM PST/PT

As a result of an issue we experienced during the daily update to the 30-day Detailed Seller Rating (DSR) averages, some sellers are experiencing either an increase or decrease in their DSR scores. In order to recalculate all DSR scores as quickly as possible, we have temporarily disabled the Seller Dashboard. We are also removing the trust factors (DSRs; buyer satisfaction rating; and shipping cost, including free shipping) from the Best Match algorithm so sellers are not promoted or demoted unfairly. (bold is mine)

Finally, we will not calculate PowerSeller discounts or Best Match standings until the recalculation is complete and the DSR averages have been verified. We are working these problems around the clock and apologize for any inconvenience or confusion that we may have caused our sellers.

Update: ***DSRs and Seller Dashboard Weekend Issues - RESOLVED***
August 11, 2008 01:11AM PST/PT

From Thursday 8/7 through Saturday 8/9, 30-day DSR averages were incorrect. As a result, we temporarily removed the Seller Dashboard so the incorrect information was not displayed. The problem has been resolved - the 30-day DSR averages are now displaying correctly, all feedback has been recalculated, and we have restored the Seller Dashboard.

On Saturday, we also removed the trust factors (DSRs; buyer satisfaction rating; and shipping cost, including free shipping) from the Best Match algorithm so sellers were not promoted or demoted unfairly. This will remain in place for the rest of the week (at least) so items listed during this time will continue to be weighted equally with other items until they end naturally. Additionally, PowerSeller discounts will be based on the corrected DSR scores, so no seller will lose his or her discount as a result of this issue. It was paramount to us that our sellers were not harmed by this technical problem.

Finally, and just as importantly, we want to thank our Community for your patience during this issue. We apologize for the frustration and confusion this caused you, and are grateful for your support.

Just my 12%

Thursday, August 07, 2008

Best Match Becomes Default Sort on eBay Motors!

eBay announced today that beginning Aug. 18th Best Match would become the default sort for eBay Motors and just to drive home the point, knowing that there would be a seller uproar they said:

"As a reminder, Best Match has been the default sort option on eBay.com since March, and it has been the default sort even longer in other international markets, such as France and Germany. Best Match helps buyers find relevant items quicker and easier than other sort methods. In fact, since its launch, our data show that Best Match has a better buyer conversion than any of our other sort methods, such as "Time: Ending Soonest."

Okay, so why will sellers be upset? eBay says "our data show that Best Match has a better buyer conversion than any of our other sort methods, such as "Time: Ending Soonest." but this is not seller's personal experience.

So, if it is working for eBay then it has to be working for sellers correct? It certainly is working for some sellers but at the detriment of others. Because eBay's GMV is growing a measly 4% Y/Y all best match is doing is moving share of sames around.

Ending soonest gave everybody a share of the pie, but Best Match distributes that share differently. A smaller number of sellers are getting the majority of the benefit. Hey, that is the way of the world in a competitive business. I really don't have much of a problem with the idea, except every seller is paying the same fees to list and getting vastly different exposure (except Buy.com)

What are the chances that eBay will stop charging listing fees any time soon? Nil!

Just my 12%

Survey Says! New Value in Used Goods

eBay recently commissioned a survey that found:
"U.S. consumers are buying used goods as a way to save money and even
help the environment. Today, 75 percent of adults are purchasing used
(pre-owned) goods to save money and nine in ten adults (88 percent) view buying pre-owned merchandise as a form of recycling
, a new survey released today by Harris Interactive® for
eBay (NASDAQ:EBAY - News) reveals. More than a quarter of adults (27 percent) who have purchased used goods in the past six months say they saved 76 percent or more off the retail price of the last item they purchased." (bold is mine)

Used goods have always been eBay's strength and in this uncertain economy, should be what sets them apart from from the rest of ecommerce. Instead, sites like Amazon are actually making head way in the used market. In fact, I sell my used media items (DVDs, CDs and Video Games) on Amazon because I can get a better price.

Here are two examples: (From the sellers perspective)
  1. The Wizard of Oz (DVD) - This particular version of the film is OOP (Out of Print). It is the original Warner release on DVD and I sold a "Used - Very Good" one this morning on Amazon for $17.97 -- BTW, they just received this item in the Reno FBA (Fulfillment by Amazon) warehouse this morning and it sold before 8:00 am.

    On eBay, using Terapeak to research completed sales, I found that over the last 30 days this same Used DVD has an ASP (Average Selling Price) of $12.20.
  2. Seven - 2-Disc DVD - I sold one this morning (again it was just received in Amazon's warehouse this morning) for $5.96. On eBay the 30-day ASP for this title (used) on eBay is $3.42
These are just two examples but I could search on thousands of titles and the results would be similar. How could eBay, the "King of Used" have lost so much ground to Amazon?
  • I usually only have a quantity of 1, with most items, so I'm going to choose the marketplace that gets me the highest price, sells the fastest and is the least hassle. On Amazon I got a higher price, they both sold the same day they arrived in Amazon's warehouse - oh and I won't get any emails from the customer.
  • On eBay I will get a lower price; if I auction the item it will take 7 days to sell and possibly another 2-3 days to get paid - oh and I guarantee I will get a minimum of 2 emails.

According to the survey "The most popular items purchased secondhand within the past six months include consumer electronics and entertainment, which 56 percent of pre-owned shoppers have purchased, and clothing and accessories, which more than half of pre-owned shoppers (54 percent) have purchased."

Amazon is an online leader in Consumer Electronics and Entertainment so they stand to benefit from this trend. eBay still has a lead in clothing and accessories, but the way Amazon is going that may not last.

Now, I know I come across as anti-eBay and pro-Amazon and I certainly lean that way, but it is because eBay has become marginalized. In fact, other than category advantages (breadth of categories) Amazon is besting them at every turn.

Update: One thing I forgot to discuss: If eBay has lower prices why wouldn't the consumer shop there, rather than Amazon?

I forgot to mention S&H in quoting the eBay numbers. The avg. S&H cost to ship both of the DVDs mentioned above on eBay was $5, while on Amazon it is $2.98 and in my case (with FBA) shipping was free.

That makes the Wizard of Oz sale comparable in price between Amazon and eBay (except the customer gets 2-day shipping on Amazon) but the Seven DVD is much more expensive.

Which is the better buying experience?

Who would have thunk it - if you want something used buy it from Amazon.

Just my 12%

Wednesday, August 06, 2008

Is eBay Hiding Your Listings!

Chris, over at Tamebay.com, had a great post showing that eBay is hiding listings in some searches, and in the two cases he identifies, he found that up to 25% of paid listings are not showing up in search. Of course, this is nothing new; eBay has been hiding Store listings for years and recently began disadvantaging some CORE listings with Best Match.

Sellers, of course, are a little upset about this. They pay an insertion fee to be included in search and if their listings are hidden, they are getting no/reduced benefit for their fees. True, the items will not be hidden completely, but it may not be for the length of time they thought they paid for.

eBay's new multiple-listings rules went into effect last week:

"Starting this week, the display of multiple identical items from the same seller will be limited to one in Search results. An item is considered identical if it has the same title and the same listing format, and the listing chosen for display will be determined by the sort option that the buyer chooses. We will be rolling this out to all sort options by next week. When multiple auction-style listings with the same title have a different number of bids and different prices, these are no long considered identical and will all be displayed.

Also, the number of unique listings (listings for different items) per seller will be up to ten per page. In a case where a seller has a number of items—for instance 20—that could potentially show up in the same search results, 10 will be shown on the first page, and the other 10 will be on the second page. (These improvements go hand in hand with the removal of the Multiple Listings Limit policy.)"
(bold is mine.)

This really isn't a concern for Fixed Price listings because a single Fixed Price listing can have multiple quantities available, so there is no need for multiple listings and Fixed Price items don't get the same impact from ending soonest, but for auctions this can be a real pain for sellers. Many sellers have multiple quantities of a given item and want them each closing on a different day.


Here is how I see the rule affecting sellers who have multiple quantities and use the auction format:

A seller has 7 identical items and lists them at auction, so that each one is closing a day apart for a 7 day period. With the old display rules, that seller knew they were going to get identical exposure for each listing, but under the new rules it is a crap shoot.

Now only one of those 7 listings will show up in search until it either gets a bid or doesn't sell. If it doesn't sell than the listing scheduled to close the following day will have one day to find a bidder. This throws too much uncertainty into the process for sellers to deal with.

For many large sellers this throws the famous eBay sales velocity out the window -- it is already affecting several sellers that I've spoken with. If you didn't convert 100% of your listings before this change you are in danger of seeing a large drop in conversion. This really doesn't affect eBay's conversion because every sale made, no matter which sellers sells it, is an eBay sale -- the buyer is still going to find an item to buy.

The real issue here is; should sellers get 7-days of exposure because that is what they paid for? I understand eBay's desire to clean up the clutter, but when sellers are paying for exposure and eBay doesn't give them the full "customary" value for their payment, this causes all kinds of problems.

I understand eBay management's desire to improve the buyer experience, but as long as they charge a listing fee, this approach is just plain wrong. Stop charging listing fees and you can control the marketplace as much as you want.


Just my 12%