Friday, October 31, 2008

Marketing for eBay's ProStores

Don't let it ever be said that I can't be positive about something eBay does. Though, like in the post you are about to read, I have many caveats.

ProStores 9.2 With Pay-Per-Sale Marketing - The Announcement

"Hi everyone...this is Matt Ackley, VP of Advertising and Internet Marketing at eBay. Many of our sellers who run their own Web stores face the challenge of marketing their stores in a cost-effective way. With the release of ProStores 9.2, we can now offer sellers a way to take the hassle out of marketing their stores online with zero upfront cost or risk.

ProStores 9.2 includes Pay-Per-Sale Marketing (Beta), a new feature where ProStores can market your store for you and you pay a commission only on sales linked to the traffic we drive to your store. Just set a minimum commission rate of 8% and increase it for more exposure. This makes it possible to get more potential buyers to your store while controlling your advertising costs—with Pay-Per-Sale Marketing you won’t pay more for advertising than you make in sales.

And remember, ProStores is the online store solution for eBay sellers—with ProStores you can open your own Web store instantly using your eBay listings and other settings.

Learn more about Pay-Per-Sale Marketing and all the new features now available in ProStores 9.2."
So what does this mean? Basically, you can set a minimum 8% FVF for sold items in your ProStore if eBay drove the traffic to you. Once again, in theory this is a good idea. An AdWords campaign can get scary because it takes a lot of effort to dial it in and get the right ROI (Return on Investment) With this new program by eBay, you only pay for an actual order that they drove to your ProStore. It is kind of like having eBay be one of your affiliates in an affiliate program.

If you have a ProStore, I would highly recommend participating in this program, hopefully there won't be too many glitches.


Just my 15%

Thursday, October 30, 2008

PayPal Unveils Holiday Plans - Press Release

SAN JOSE, Calif., Oct 30, 2008 (BUSINESS WIRE) -- PayPal today announced great deals and special offers for cash-strapped online shoppers this holiday season. Customers can receive up to 20 percent cash back on purchases from major retailers, such as American Eagle Outfitters, eToys and Blockbuster, as well as free shipping from select PayPal merchants and great eBay  deals for anyone paying with PayPal.

"With the economy tightening, consumers are shopping early and using every tool at their disposal to find the best deals on holiday gifts," said Cliff Hopkins, senior director for PayPal. "Many online merchants are responding with cash rebates, free shipping and other great deals for all our PayPal members this holiday season."

Forrester Research predicts online sales will increase by 12 percent this November and December over 2007 ("Outlook for US Online Holiday Sales," October 2008).
To attract online holiday shoppers, retailers are offering a number of holiday promotions to help PayPal members find great gifts at prices that won't break the bank.

Cash Back
Beginning December 1 through December 22, PayPal members can receive cash-back incentives on purchases from retailers such as Overstock, Blue Nile and eToys. Offers vary by merchant, but shoppers can find rebates and discounts ranging from five to 30 percent.

Free Shipping
Merchants such as SmartBargains and 1800 Flowers are also offering free shipping this season on orders paid for with PayPal.

eBay Deals
eBay continues to be the destination where shoppers can find the best prices on the gifts people want most. Shoppers who arrive at eBay through Microsoft Live Search ( www.live.com) can receive up to 30 percent cash back on the purchase of any eligible fixed-price item when using PayPal through the Microsoft Live Search cash back program. The cash back program, on top of eBay's already low prices, can generate savings of up to 60 percent on many of the hot gift items available for sale across the site.

And just in time for the busy holiday shopping season, eligible purchases on eBay.com paid for with PayPal are protected for the item's full purchase price plus original shipping costs with no cap on coverage if the items are not received or significantly not as described.

For more information about the 2008 PayPal holiday promotions, and to see a full list of participating merchants, visit www.paypal.com/holiday beginning December 1.

Just PayPal's 15%

Improve Your Customer Service this Holiday Season!

I'm mainly speaking to eBay sellers with this post, though website and other marketplace sellers have some of the same issues. 

With all of the changes happening at eBay and the impact of DSR's on your search standing/exposure, it is imperative that you don't drop the customer service and delivery ball this holiday season.

Veteran eBay sellers know their feedback scores can take a major pounding at this time of year. Q4 2008, that is even more likely, because it is the first Christmas of one-sided feedback and the dreaded DSR's (last Christmas DSR's didn't affect your standing in search). If you don't watch your inventory levels and double-up your efforts in customer service, you may find you won't show-up in search come January.

Answering the incessant emails from eBay buyers can become overwhelming, especially during this time of year. I would encourage you to add extra help if your budget can afford it, because falling behind on customer service this Christmas could be detrimental to your business.

Also, watch your inventory. Our biggest problem at Glacier Bay (during the holidays) was running out of stock on something that we had actually sold. The extra effort spent to find it from another source and deliver it in time for Christmas was overwhelming and made the deal unprofitable, I would have been much better off not selling the item than jumping through all of those hoops. Customers just don't care why you ran out of their product they just want the product they paid for and they want it to arrive when in time. Manage your inventory and your listings so you can deliver everything that is ordered in time.

This is going to be a strange holiday shopping season, especially on eBay, so do your best to keep inventory and customer service issues to a minimum. 

What I'm doing:

This is a major reason, I've chosen to use Amazon's FBA service. I can't sell an item I do not have in stock and Amazon handles all of my customer service. I can also offer buyers, gift wrapping services and next day delivery up to the 23rd of Dec. I'm looking at a 400% increase in sales Y/Y this Q4 and my only real concern will be getting product to Amazon by the 18th of Dec. so I have enough product to sell through the 23rd.

Just my 15%

Wednesday, October 29, 2008

Where the Hell is Pierre?

Sorry about that title, but honestly I am pretty worked up about this. Billionaire, Pierre Omidyar should stop writing tweets about the state of America and start concentrating on the state of eBay. Maybe if we shame him publicly, we can get him to do his job for the good of each of eBay's stakeholders. 

The problem with eBay is not John Donahoe (he's a hired gun), the problem is Pierre Omidyar. He is the majority shareholder and Chairman of the Board and the only one with any real power. 

He created a site that became the single best "personal empowerment" story ever told and turned it over to Wall Street and the MBA's. They enriched him so he could pontificate about the terrible state of America when he has in his grasp a tool to empower real Americans.

I have lost all respect for the man. He has no real principles he's just a blow-hard. If he wanted to, he could in a heart-beat tell John Donahoe and the rest of the Board what he wants. He had a vision in the early days but the money corrupted him. He owns 177 million shares, which gives him all the power he needs.Check Spelling

Steve Jobs, came back to Apple and turned it around. Pierre is no Steve Jobs, but he is the only person with any real power. Meg Whitman is just a director, John Donahoe works at the behest of the BOD (Board of the Directors) If Pierre had any balls he would just say; enough-is-enough this is what we are going to do. He then just needs to hire an entrepreneur with vision and guts to run the company.

There, sorry for the rant, but I'm laying all of this at Pierre's door.

Just my 15%

eBay's New In-Demand Tool! Update

Scot Wingo, just did a huge write-up on eBay's new In-Demand tool, on his blog, so I won't go into many details, but this is an interesting new tool for Power Sellers with high DSR's (4.8 or above). 

In a nutshell, eBay's In-Demand tool will tell you what product is in-demand on the site but the supply is limited. Again, like many things eBay does, it make sense in theory.

Unfortunately, I think eBay will lose interest in this within a few months and it will go the way of so many other things they've developed. 

I have a suggestion; why not put off these little projects until you bring enough demand to the site for the product that is already here?

Update: It looks like RBH at eBayInk just posted about the program with details. Currently it looks like there are 6,000 beta testers in the program. If any of my readers are in the group please email me your thought.

Just my 15%

Tuesday, October 28, 2008

My Webstore Stats!

I know how much you all love my stats, well now that my Webstore is up and running and taking orders, I have some early stats: (From Oct 17th through the 27th).
  • Unique visitors: 322
  • 27% of visits are from returning visitors. (Probably some of you).
  • 34.16 % of traffic has come from Google Product Search. (Google Base)
  • 29.21% of traffic has come from My Blog Utopia - Thank You
  • 10.64% of traffic has come from Yahoo organic search.
  • Sales to date: $132.16 
  • 6 affiliate sales (2 from my readers, thank you)
  • 2 of my own items.
Now you may laugh at those sales, but I'm very pleased. I haven't even started to actually market the site yet, this activity is pretty much straight out of the box. Once I fine tune my SEO efforts and add a blog to the site and start to do some merchandising, I'm feeling very confident that this will turn into a nice little revenue stream in the short-term and a sizable profit generator by Q4 2009. 

The next update will be in January of 09, so stay tuned.

Just my 15%

My Interview with the Savvy Seller!

In case you didn't have time to listen to my interview with the Savvy Seller yesterday, I've embeded the podcast here for your listening pleasure. I would love to hear your comments or questions.


Just click on the arrow and away you go.

Just my 15%

Just One of Those Days!

One very important rule in blogging is to post regularly. If you only post occasionally you won't develop a loyal readership. I try and write at least one post every day, but sometimes I just can't find anything I'm interested in enough to give you my 15%. In fact, today I've started 3 separate posts and lost interest half-way through each of them. Nothing overly exciting. 

So, I thought I would try something different today -- I want to hear your 15%

I'm going out on a limb here asking for comments, so if you don't post anything I'm going to be a little embarrassed. 

Here is the topic of the day: eBay announces holiday marketing plans.

Every year since 2002, eBay has had a coordinated holiday marketing campaign that included television -- some good, some bad -- at least they were trying. This year there is no television campaign, in fact I've not even heard of catalogs or direct mail this year. It appears the extent of eBay's holiday marketing efforts are what is listed in the press release.

If eBay is the place to find new in-season product at 30% or more off of MSRP, shouldn't they be shouting it from the mountain top? Or have they just written off this holiday season.

I'm interested in your 15%! If you think this is the correct approach, tell me why. I you think this is the wrong approach, I'm sure you will tell me why. Please read the press release and give me your 15% on their holiday plans. 

I'll respond to your comments and we can have a nice little discussion.

Update: As a point of comparison here are Etsy.com's marketing plans for this holiday season.

Just my 15%

Monday, October 27, 2008

Bonanzle Update!

Bonanzle just keeps growing! In less than 2 months they have registered over 6,000 users, with 250,000 items listed and  sales are starting to occur with growing frequency.

They had a little traffic hic-cup last week, because the GoogleBase feeds were being dropped, but team Bonanzle found a solution and once again traffic is on the rise. 

Just my 15%

Sunday, October 26, 2008

My Interview with The Savvy Seller 12 Noon EST

Monday at 12:00 noon EST, I will be speaking with Marlene, The Savvy Seller about selling online. Why don't you join the call. I'm not 100% sure how this works so you may not be able to speak to me on the call, but you will be able to join the chat room.

When: 12:00 pm EST (9:00 am PST for you Left Coasters) 
Where: Dial in number: 724-444-7444
Call ID: 19245

We will be talking about all things ecommerce and who knows maybe I will even be positive about eBay. Here is your chance to ask me a question, you've been dying to ask. Just follow this link and join the chat room to ask any questions. If you don't register, you will be anonymous and the pin # is 1#

Just my 15%

Saturday, October 25, 2008

Interesting New Website HandMeDowns.com

I haven't spent a lot of time at the site yet, so I can't give you a thorough review, but Mashable has a nice write-up. It looks like niche website geared towards mom's.

Mashable says:
"If you’ve had brothers or sisters or cousins older than yourself, there’s a reasonable chance that you’ve been the recipient of objects most frequently described as hand-me-downs.

Rarely would such an exchange elicit happy thoughts. Except for your parent or guardian, who saved some cash in the process, as well as the giver of said object, who could net some so-so karma for passing it along. (Major feel-good moments are had with Good Will donations and the like.) Well, there is now a service crafted to accommodate precisely this process. Fittingly, it’s name literally spells out Handmedowns.com. And quite frankly, it may actually be worth your while."

What happens when you don't have any more kids to "Hand Me Down" too. Sell or Donate at HandMeDown.com

Just my 15%

Blatant Promo: Get Oprah's $50 off on the Amazon Kindle

Oprah, says "I'm telling you, it is absolutely my new favorite thing in the world." and now you can get it for $50 cheaper because of that endorsement.

I've got the Amazon Kindle in my INet Media Source store and if you use the coupon code OPRAHWINFREY at checkout, you can save $50, making this revolutionary (okay that is marketing speak for cool) gadget, yours for $309. Update: Coupon code is good through the end of Oct.

Join the Kindle revolution and help support my blogging habit.

I now return you to your regularly scheduled eBay bashing and Amazon pumping -- that was for you Chris. :)

Just my 15%

Friday, October 24, 2008

A First Look at the eBay AdCommerce Program

Several years ago, eBay had a banner ad program for sellers that allowed them to bid on certain keywords and have a banner displayed at the top of search. I participated in this program at Glacier Bay DVD. 

I remember that I loved the idea of my company name getting millions of impressions on eBay, but that the click thru rate was terrible. It made sense for me at the time because, I sent buyers to my store and the FVF at the time was 5%.

Now, many years later eBay is trying to sell ads to sellers again, with AdCommerce. In fact several select sellers are now part of a pilot program that will begin running soon.

Thanks to ColderICE, for pointing me to a video for the new service, explaining how it works.

I'm on record for not liking this idea for a couple of reasons:
  • For low margin businesses, it doesn't make sense; at least to me. You are already paying for listing fees and FVF on the items you sell, so paying for clicks also just doesn't make sense. 
  • They only allow you to link to eBay items or stores. If they allowed you to advertise your website, I would be one of the first people in line. 
It may be a good program, or at least worth a test, if you have high margin, high velocity product. With "recent sales" such a big part of Best match right now, AdCommerce may be less expensive than Featured First and Featured Plus to get that additional exposure and increase your odds at winning the sku in Best Match.

The biggest problem I see with the AdCommerce program, is that the Diamond Sellers who have a lower fee structure and can afford to spend a little more on this AdCommerce program, will quickly be bidding up the keywords, so much that the regular sellers can't afford the program.

Just my 15%

Thursday, October 23, 2008

Is eBay Tight on Cash?

One of the reasons eBay is considered a value play by Wall Street, is they have always had a very strong balance sheet and earn lots of money every year. So it doesn't seem possible that they could be experiencing a cash crunch, does it? After all they had $5 billion in cash at the end of 2007 and zero debt and they are always very profitable. They even bought back $4.2 billion in stock by the end of Q1 2008, almost 10% of the shares outstanding.

As of the Q3 earnings call, they have $3.3 billion in cash, $2.9 billion of that is off-shore and they would be taxed heavily if they brought it back on-shore.

Where is the cash going? (Source Seeking Alpha earnings call transcripts)
  • eBay ended 2007 with $5 billion in cash.
  • At the end of Q1 2008 eBay had around $4 billion in cash.
  • At the end of Q2 2008 eBay had $3.7 billion in cash; $2.9 billion of that total off-shore
  • At the end of Q3 2008 eBay had $3.3 billion in cash; $2.9 billion off-shore
In 2008 eBay has bought back over $2.1 billion in shares through Q3, there have been no substantial acquisitions prior to those announced in Oct. So, in less than a year eBay's cash position has gone from $5 billion to $3.3 billion with all but $400 million of that money off-shore. 

It is nice to see that eBay has given money back to shareholders by buying back shares but hasn't really helped investors -- the share price is still in the tank at less than $15. With the acquisitions announced in Oct. eBay will shell out $1.3 billion to acquire Bill me Later and several classifieds sites. $1 billion of that will be coming from their credit line. For the first time ever eBay will be borrowing money.

The Bill Me Later acquisition also brings $500 million in short term debt to the eBay balance sheet. With all of these moves and the companies guidance for a slow 4th quarter, the eBay balance sheet may not look so valuable come their Q4 earnings call. 

Just my 15%

Christmas is Still on at Amazon

Everybody knows I'm very bullish about Amazon and though they have adjusted their guidance for the 4th quarter, to account for the uncertainty, they are still growing in this economy.

Here is what the analysts are saying:
  • Jeetil Patel - Deutsche Bank "We maintain BUY rating on shares of Amazon, as the fundamental growth (in metrics) remains solid, albeit affected by the strength in the US dollar and modestly by weak consumer spending. While FX headwinds and the current economic downturn have temporarily muted near-term growth and margin expansion, we expect unit growth in 2009 to power 19% operating profit dollar growth, which we think should lead to share price appreciation over the next 12-months." (Bold is mine)

  • Justin Post - Merrill Lynch "Three positives for long term shareholders: 1) strong customer growth in 3Q at 17%, 2) midpoint of 4Q guidance implies a still solid ~20% ex-currency rev. growth in 4Q even in the heart of the recession, and 3) unit growth in 3Q was steady at 30%. Amazon's long-term share growth thesis across categories is on track, in our view.  We do note that incremental margins in 4Q are expected at just 3.7% in our model, which is well below street long-term margin outlook (8-10%), so bears will argue Amazon is using lower margin sales to drive top-line. (Bold is mine)

  • Scott Devitt - Stifel  "Amazon reported 3Q08 revenue of $4.26 billion, an increase of 31%. Cash operating income was $231 million, up by 31%. Trailing twelve month free cash flow was $970 million, up by 21%. Amazon's domestic revenue growth rate was 29% and came in at 4x the industry. Amazon's international revenue growth rate was 33% or 28%, excluding currency. The company's quarter was solid in all respects and operating margin would have been better if not for the three capacity-driven domestic fulfillment center additions." (Bold is mine)
While Amazon management adjusted 4th quarter guidance down, it was due mostly to the effect of the stronger US dollar and less to the current consumer spending malaise. While you wouldn't want to go out on a limb and buy up a lot of Amazon stock right now, if you sell product online, you will still want to be selling on Amazon this 4th quarter. Christmas will run as scheduled over at "The River".



Just my 15%

Wednesday, October 22, 2008

Amazon Announces 3Q Earnings!

Amazon announced 3rd quarter numbers today after the close of the market and quickly saw it's shares lose 12% in after hours trading.

You know that I've been very bullish on Amazon as a business and it appears they are not immune to the economic slowdown, though they fared better than many of their peers.

Here are the numbers:
  • Net sales increased 31% to $4.26 billion in the third quarter, compared with $3.26 billion in third quarter 2007 - Wall Street was looking for $4.27 billion so they missed the estimate.
  • Net income increased 48% to $118 million in the third quarter, or EPS of $0.27 per diluted share, compared with net income of $80 million, or $0.19 per diluted share, in third quarter 2007. - The Street was looking for EPS $0.25 So they beat on the bottom line.
The problem comes with their 4th quarter guidance. Much like with eBay, Amazon is expecting a much slower 4th quarter, but unlike eBay Amazon will still have a Christmas. Amazon is expecting $6 billion on the low end for the 4th quarter as opposed to $4.26 billion for the 3rd quarter. eBay actually is expecting less revenue in the 4th quarter then they earned in the 3rd quarter.

4t Quarter Guidance:
  • Net sales are expected to be between $6.0 billion and $7.0 billion, or to grow between 6% and 23% compared with fourth quarter 2007. The Street is expecting $7.083 billion
Amazon has revised their 4th Quarter guidance down by about $500 million dollars and that is certainly disturbing. I was expecting a better 4th quarter forecast then this, so it is clear Amazon is not as immune to this consumer spending environment as I thought they would be.

More after I hear the Conference call.

Just my 15%

More Color on the eBay Layoffs!

Just an update on the eBay layoffs and I apologize upfront for the lack of confirmed details. eBay, still has not replied to my request.

There have been numerous reports on where the layoffs were coming from, so I will try and piece them together here:
  • I just found this blog post from a former eBay employee in Germany, where he laments the layoffs in Europe. He confirms what Henrietta over at The Red Ink Diary wrote shortly after the layoffs were announced:
    "It looks like the cuts in Europe basically meant that eBay slashed the local teams in each and every European country to a very bare minimum (often literally only a handful of employees) - and combining marketing and marketplace functions on a pan-European level in Switzerland and the UK respectively
    If you ask me that’s a rather bold move - and one which might backfire heavily: If there is one thing eBay should have learned with all their failed expansion plans (Japan or China anyone?), it’s the simple fact that eBay’s business is a rather local one and that you need the local face towards the seller and buyer community. With these layoffs eBay basically gives up on this idea and acts like you can run eBay like a machine - no interaction needed. I heavily doubt that this will work even in the short run - and that most larger Powersellers (who contribute a significant part of eBay’s revenue) will now finally throw the towel; looking for better managed outlets like Amazon Marketplace or their own webshops in conjunction with search & price comparison engine marketing."
  • We heard of layoffs in the Corporate Communications department with a boring memo from Alan Marks to his troops. 14% of the Corporate Communications team was simplified (a term Marks used).
  • Marketing functions were rolled into the Buyer Experience team and I have confirmed that Mike Linton, eBay's CMO will be leaving early in 2009. His team, what is left of them, will report to Greg Fant.
As I get more information I will update this post. It is clear that the majority of cuts came from the marketing side of the business, both here in the US and especially in the International markets. 

These specific moves are curious to me, as eBay seems to believe that they have a supply problem not a demand problem, while sellers believe just the opposite. If eBay believed they had a demand problem then they would not be cutting the one department tasked with increasing demand -- marketing.

Just my 15%

In A Perfect World - eBay and Amazon

In A Perfect World:
  • eBay would spin off PayPal.
  • eBay would sell Skype and hopefully make a little money on the deal.
  • eBay would sell their marketplace business, including StubHub and the classified businesses to Amazon. 
  • As part of the deal with Amazon, PayPal would be included in Amazon Payments. 
The two corporate cultures are very different, but I can't help thinking that eBay needs a dose of Amazon management to get out of this funk. By default this move would create eBay Classic and get rid of Amazon Jr.

Why would eBay do this? 
  • They can't seem to fix the problems with the marketplace and they aren't willing to listen to alternatives to their plan. This deal takes the marketplace headaches away and lets them concentrate on PayPal.
  • Adding PayPal to Amazon Payments and then making Amazon payments the default checkout on eBay, keeps PayPal part of the eBay revenue stream and adds another 80 million accounts with Amazon payments.
  • Having PayPal as a stand alone company will help them defend against regulations coming down the pike.
  • What other options do they have?
Why would Amazon do this?
  • Amazon gets a profit machine in eBay.com and growth in the classifieds business.
  • Amazon is having trouble expanding the categories they offer because of requirements for UPC codes and structured data. eBay can take that load off them.
  • Amazon can be the fixed price marketplace and eBay can be what it has always been; an auction site with hard to find items.
  • Amazon can expand their FBA and Webstore programs.
Sure, there are a ton of elements that I'm missing and I'm not even going into why investors would want to see this, but it could happen -- In a Perfect World.

Just my 15%

Tuesday, October 21, 2008

Diamond Sellers 101

With all the talk about the new eBay being a retail haven for the Internet 500, I thought it would be good to take a look at some of these companies.

Here are some interesting facts on these retailers:
  • The 2007 annual sales of the Internet 500 range from : #1 Amazon.com at $14.8 billion to #500 KneeDraggers, Inc. at $6.5 million. It is interesting to note that several current eBay sellers sell more than $6 million a year on eBay alone and they aren't getting any special listing deals. So my guess is you'd have to be doing $50 million a year or more for eBay's salespeople to come a knocking, but who knows maybe they are desperate..
  • 208 of the top 500 Internet retailers had sales of less than $25 million last year. Several current eBay sellers do more than $25 million a year on all venues. eForcity being one of them and because they are currently selling on the platform they don't get any deals, as far as I know.
  • 310 of the top 500 retailers had sales of $50 million or less in 2007. 
  • Two of the the Top 10 retailers have already tried to sell on eBay and decided it didn't work -- Dell and Sears Holdings.
  • Other top 500 retailers have sold on eBay in the past and backed out after a few years; #12 Best Buy being one of them. 
  • #33 Buy.com is currently the poster boy of Diamond Sellers on eBay and their current GMV on eBay, while impressive from my perspective, may not even amount to 6% of Buy.com's total GMV for the year. In fact Buy.com might be much better off just paying for sponsored ads and banner ads on eBay, rather than managing an eBay business and all of the overhead that requires. 
  • Other Internet 500 retailers that won't be showing up on eBay: #7 Apple, #11 QVC, #14 Wal-Mart, #16 Circuit City, #17 Neflix and the list could go on and on.
  • Some brands just wouldn't work well on eBay: #27 Zappos and #32 Nordstrom for example. High value brands in a discount marketplace just don't work.
  • Some on the list have already filed bankruptcy; #176 The Sharper Image and #154 Linens and Things and others are teetering on the edge. Not really a time to try a new platform like eBay.
I could go on and on, but you get the point. Of the top Internet retailers, only a small number would even consider selling on eBay and once on the platform they would quickly understand what long-time eBayers are saying. There is not enough demand on the marketplace for the existing group of sellers plus Buy.com, what makes eBay management think adding another 20 large retailers will do to the marketplace.

I hope these companies are not signing any long-term deals with eBay, because they will find out after about 6 months, this is not what they thought it would be. Ask, Buy.com how they feel about this deal 6 months into it. I just checked their sales since FP-30 launched and their sales are down 

If anybody from one of these Internet 500 retailers reads this blog, do yourselves a favor, contact me and get the real story before committing the resources to selling on eBay.

Just my 15%

Let's Talk Business!

My Blog Utopia gets a fair amount of traffic on a daily basis and I only have one advertising option on the site; Google's AdSense. So, I'm reaching out to those of you who read this blog and want to reach my readership. It's as simple as targeting http://www.myblogutopia.com as part of your AdWords campaign.  

What do you need to do?
  • First you need to include Google's content network in your campaign; not just search. You can then just select http://www.myblogutopia.com as a targeted url for placement of your ads.
  • This gets you in front of a very specific readership and allows Google to serve up ads that will actually be of interest to my readers and certainly help you with conversions.
  • Now you can also target my RSS feed through Google, to reach those regular readers who rarely come to the blog; just over 500 to date.
Here are some stats that will be of interest. My analytical tools are not sophisticated enough to break down the demographics of the site, but I can give you an idea of who my readers are: 
  • eBay Sellers, both small and large read my blog on a daily basis. They are interested in tools and information to help improve their business and many of them are looking for clues to what eBay is doing. They are also interested in new marketplace options and services. You folks at Amazon should be targeting this blog with your ads. :)
  • Media Sellers read my stuff because I live in their world, so if you have something to offer them this is the place to offer it.
  • Employees and execs at Google, eBay, Amazon and smaller marketplaces subscribe to my RSS feeds and read the blog on a daily basis, so if you want to reach out to them, this would be a good place to start.
  • Investors, read the blog to get a feel for what is happening in the ecommerce world. This is a smaller segment of the readership but they are visiting regularly, though most often around earnings season.
Here are some basic readership stats:
  • 7,036 absolute unique visitors in the last 30 days and 19,900 absolute unique visitors in the last 3-months.
  • 22,801 page views in the last 30-days an 64,402 page views in the last three months.
  • 520 RSS subscribers.
  • 41.49% of my Blog Utopia visitors are new in the last 3 months.
If you have any questions on how to target this blog through Google AdWords please email me and I'll walk you through it.

Now back to your regularly scheduled bitching about eBay.

Just my 15%

Digging for Diamonds!

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

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

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

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

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

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

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

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

Just my 15%

Monday, October 20, 2008

Former eBay Employee Alan Lewis Visits!

No he hasn't visited My Blog Utopia, though I will begin working on that shortly. He actually is participating in a discussion thread on the eBay Stores Board.

A user posted a link to his most recent blog post which I have linked to here and Alan jumped into the discussion. There is some very interesting conversation going on.

Check it out.


Just my 15%

Sunday, October 19, 2008

Ina Steiner Interviews Former eBay Seller Bruce Hershenson

If you haven't visited Auctionbytes yet today, you might want to click on the title of this post and go read her interview with emovieposter.com founder, Bruce Hershenson. He shares some very interesting comments regarding why he left eBay. 

Many of you have followed his story, so this may be nothing new to you, but I wanted to share one quote that should provide some perspective for you smaller sellers trying to find a new home for your product.
"I have heard many smaller sellers complain that the alternate selling sites do not have the traffic that eBay does, and therefore they give up on them. They forget that the eBay I first encountered in 1998 had very little traffic, and it was only after many people like me supported it that it gained substantial traffic. I think that over time, many eBay sellers will gravitate to one of the alternate selling sites, and that that site will become real competition to eBay. Until that happens, I suggest that all small sellers look for alternate ways to diversify, opening an inexpensive website, exploring selling on many alternative sites, etc. If today a seller's business is 100% eBay related, they can look to make it only 90% eBay in a few months time. It may not seem like a big difference, but it is an important first step to becoming less dependent on eBay."
Just my 15%

Does This Sound Like Your Business?

I have heard many folks talk about the work/life balance in regards to their jobs. eBay supposedly does a good job of helping their employees with the work/life balance, but what about online sellers? 

I came across this comment from Anthony at AACS Autographs on the PeSA, discussion board and with his permission I would like to share it with you.

Anthony, was responding to the following question from another member:

I would like to ask JD about the balance between work and life, which they advocate for their employees. I would like to know if he feels sellers are entitled to the same level of balance.
I like that question... I like it a lot!

FYI, when we were 100% eBay (just a few short weeks ago) I worked 6 days a week, 10-12 hours a day, and I'd done that for that last 10+ years. Now that we're only about 25% eBay, 75% my own auction site, I've taken each of the last four Fridays off to spend with my wife, have played several rounds of golf and have even knocked off early a couple times. 

Now that my fees have dropped from $5k - $6k per month to about $1k and I don't have all the eBay related hassles, I'm finding I don't have to work nearly as hard to make the same money. Life is good and I'm not sure I ever could have gotten here staying on eBay as it was consuming more and more of my time.

Anthony
If, what Anthony is describing above, doesn't sound like your business, it may be time to seriously re-evaluate what you are doing. 

As I said in an recent post; Glacier Bay DVD used to be my life. Today, I have a lifestyle business; the best of both worlds. A business that is growing at a steady, if unexciting, pace and a life to go along with it.

If you haven't already sat down and evaluated your business and what you want to get out of it, then I would suggest you do that very soon. If eBay is a part of the business going forward, make sure you are using the platform and not letting it use you.

Just my 15%

Amazon Earnings WebCast Weds. Oct. 22nd

Amazon is getting ready to announce their 3rd quarter, 2008 Earnings this coming Weds. and many online retailers, analysts, investors, bloggers and eBay executives are going to be very interested in what they have to say.

What everybody wants to know, regarding this Amazon earnings call is, will Amazon cancel Christmas just like eBay did?

We know the economy is doing poorly and you would think it would treat Amazon and eBay alike, after all they are conducting business in the same economy. eBay has already cancelled Christmas because of the economy, it just makes sense that Amazon will have to as well - doesn't it?

If Amazon meets or beats, Wall Street's estimates for Q3 and doesn't revise their Q4 guidance down in response to the macro-economic headwinds, eBay execs better run for the hills, because there will be nowhere to hide. 

I have said all along that eBay's results are mainly due to poor execution, not the economy. eBay should be excelling in this economy, but appears to be lagging behind. If Amazon, doesn't disappoint on Weds. then the "fat lady" has sung.

My suggestion, for those merchants who sell on both eBay and Amazon: Listen in on this conference call or read My Blog Utopia on Weds and if the word is that Amazon won't be cancelling Christmas this year, then make plans to have the lion's share of your inventory on their site as soon as possible.

Just my 15%

Friday, October 17, 2008

The eBay Pinks Have Left the Building!

For those of you who don't know what a Pink is:  They are eBay employees who help out on the discussion boards. They can be identified by a pink header to their discussion posts

Over the last several years they have become kind of scarce; as seller and buyer unrest increased. While they often received a lot of grief, most of them were well respected and appreciated. The fact that they are being let go solidifies the message that "this ain't your mother's eBay" 

For those that are leaving I wish you well.

And a post by a Pink named Maeve

Hi everyone, Friday is my last day with eBay. I wanted to thank all of you and many others for making it a very memorable 9 years.

I've found a lot of laughter on these boards punctuated with times of great sadness and the one thing that shone through is the great hearts of all our members. 

Its been a pleasure getting to know you.

Maeve 
Thanks to mh for bringing this to my attention.

Just my 15%

It's Alive! It's Alive! INetMediaSource.com

I'm going against the grain a little here, making an important (for me) blog post on Friday afternoon, but I'm so jazzed to have the site up and taking orders, I couldn't wait.

Drum Roll Please -- Introducing my new webstore http://www.inetmediasource.com



This is version 1.0 and will be changing a little between now and Christmas, mostly from a product and navigational standpoint. Two things to highlight though, that are real exciting for me:
  • Right now I only have 1500 different items available and they sell both on Amazon.com and in my webstore. When I have the product in stock, the webstore listing will be for my item, but if I've sold it on Amazon.com or in the Webstore before you get there, then it will be replaced by an Amazon listing. (I get affiliate revenue from that)
  • The cool part is; if a customer buys one of my items and also buys one of Amazon's they will be shipped in the same box and they still qualify for Super-Saver and Prime shipping.
  • I am also selling items by other 3P merchants, even some of you guys who read this blog. If a customer chooses one of your/their items then I still get an affiliate commission (thank you) but you get the sale. Just make sure you ship the darn thing, fast.
  • I'm really looking forward to selling my first MovieMars item and getting that 8% commission. (Sorry Doug and Dan, I couldn't resist.)
As, we get closer to Christmas I will also be highlighting used DVD's, CD's and Video Games that I have in stock -- in their own section. My used "Very Good" product is as clean as a new snow, so it can be given as a stocking stuffer this Christmas -- hey, we are in a recession -- and because my product is in Amazon's warehouse you can have it gift wrapped as well.

So for all of My Blog Utopia readers:  If you are going to be buying a DVD, CD, Book or Video Game this Christmas, give me a shot at http://www.inetmediasource.com -- I'll take care of you. Oh that's right Amazon handles just about everything. Tee Hee!

Just my 15%

eBay Borrows $1 Billion from Credit Facility!

According to a recent filing with the SEC:
On October 16, 2008, eBay Inc. (the "Company") drew down an aggregate amount of $1.0 billion under its revolving credit facility (the "Facility") pursuant to the Credit Agreement (as amended, the "Credit Agreement") with Bank of America, N.A., as Administrative Agent (the "Agent"); certain lenders named therein; JP Morgan Chase Bank, N.A. and Wells Fargo Bank, N.A., as Syndication Agents; and Banc of America Securities LLC, J.P. Morgan Securities Inc. and Wells Fargo Bank, N.A., as Joint Lead Arrangers and Joint Book Managers. This borrowing under the Facility currently bears interest at a rate equal to one-month LIBOR plus a margin of 0.20% (4.67% as of October 16, 2008). We expect that the funds will be used for general corporate purposes, including financing the acquisition of Bill Me Later, Inc. and its associated receivables. Following this borrowing, the remaining availability under the Facility is approximately $840 million (which also reflects a $160 million reduction in available borrowing resulting from the bankruptcy filing of Lehman Brothers Holdings Inc., the parent corporation of Lehman Brothers Commercial Bank (which had a $160 million lending commitment) [Bold is mine]



Just my 15%

Blast From the Past: How Did We Survive our Youth?

Many of you may have seen this before and I do not have the authors name to attribute this to him/her, but if you are out there, thanks. You young-uns listen up! :) This is one of those, when I was your age posts.

TO ALL THE KIDS WHO SURVIVED THE
 
 1930's, 40's, 50's, 60's and 70's!! 

First, we survived being born to mothers who smoked and/or drank while they were pregnant.

They took aspirin, ate blue cheese dressing, tuna from a can and didn't get tested for diabetes.

Then after that trauma, we were put to sleep on our tummies in baby cribs covered with bright colored lead-base paints. 

We had no childproof lids on medicine bottles, locks on doors or cabinets and when we rode our bikes, we had baseball caps not helmets on our heads. 

As infants & children, we would ride in cars with no car seats, booster seats, seat belts or air bags.

Riding in the back of a pick up truck on a warm day was always a special treat.

We drank water from the garden hose and not from a bottle.
 
We shared one soft drink with four friends, from one bottle and no one actually died from this. 

We ate cupcakes, white bread, real butter and bacon.  We drank Kool-aid made with real white sugar.  And, we weren't overweight.  WHY?

Because we were always outside, playing...that's why!

We would leave home in the morning and play all day, as long as we were back when the streetlights came on.
 
No one was able to reach us all day.  And, we were O.K. 

We would spend hours building our go-carts out of scraps and then ride down the hill, only to find out we forgot the brakes.   After running into the bushes a few times, we learned to solve the problem.
  
We did not have Playstations, Nintendo's and X-boxes. There were no video games, no 150 channels on cable, no video movies or DVD's, no surround-sound or CD's, no cell phones, no personal computers, no Internet and no chat rooms. 
We HAD FRIENDS and we went outside and found them! 

We fell out of trees, got cut, broke bones and teeth and there were no lawsuits from these accidents.

We ate worms and mud pies made from dirt, and the worms did not live in us forever. 

We were given BB guns for our 10th birthdays, made up games with sticks and tennis balls and, although we were told it would happen, we did not put out very many eyes.

We rode bikes or walked to a friend's house and knocked on the door or rang the bell, or just walked in and talked to them.   

Little League had tryouts and not everyone made the team. Those who didn't had to learn to deal with disappointment. 
Imagine that!! 

The idea of a parent bailing us out if we broke the law was unheard of.  They actually sided with the law! 

These generations have produced some of the best risk-takers problem solvers and inventors problem solvers and inventors ever.

The past 50 years have been an explosion of innovation and new ideas.

We had freedom, failure, success and responsibility, and we learned how to deal with it all.   
If YOU are one of them?  CONGRATULATIONS! 

You might want to share this with others who have had the luck to grow up as kids, before the lawyers and the government regulated so much of our lives for our own good.

While you are at it, forward it to your kids so they will know how brave and lucky their parents were. 

Kind of makes you want to run through the house with scissors, doesn't it ?

This clip thanks to Dan Wilson in the UK.


Just my 15%

Thursday, October 16, 2008

The Morning After - eBay's 3Q Conference Call.

Somehow this post feels like I'm just piling onto to eBay when they are down. It almost seems unfair since they are so vulnerable, but after 2 years of blogging about eBay, I finally feel vindicated. The analysts and the press are finally seeing the light. 

What the Press has been Saying
There were two excellent articles recently by Victoria Barrett of Forbes and Brad Stone of the New York Times. These are the first two articles to identify the real problem with eBay and it isn't eBay sellers.
What the analysts are saying:
Other than Jeetil Patel of Deutche Bank, most analysts have felt that eBay was an undervalued stock, that had a few problems in the marketplace business, but they were still bullish. Now that there is irrefutable evidence that the demand for eBay items is declining and the structural problems are clear to be seen, they have finally changed their tune.

  • Jeetil Patel - Deutche Bank has seen the problems all along. He is sometimes a lone voice in the wilderness. " We reiterate our SELL on shares of eBay, and are lowering our price target to $13. We think the stock will remain under pressure, particularly as business trends onsite appear to have worsened dramatically in September, largely due to the structural issues facing eBay (lack of demand, increasing seller fees, lack of reinvestment).

  • Scott Devitt - Steifel Nicholas - Scott still has a buy rating on the stock, but admits: "Unfortunately, our view of the stock has been mostly wrong, but we believe that current share prices more than reflect the significant headwinds facing the business."

  • Justin Post - Merrill Lynch - Justing just recently downgraded the stock to underperform. "Given magnitude of eBay's 3Q GMV miss ($14.3bn vs $14.9bn expected) and weaker 4Q guidance, results have a negative read-across for AMZN and GOOG. However, eBay sellers as well as private and public eCommerce companies have indicated more deterioration on eBay than other channels and off-eBay PayPal volumes beat our estimate by $260mn.  We are incrementally more cautious on sector, but believe some of eBay's 3Q $640mn GMV miss likely moved to AMZN."

  • Mark Mahaney - CitiGroup - Mark recently downgraded the stock to a hold and had this to say; "What's Gone Wrong? - 1) Macro -- negatively impacting eBay, PayPal, StubHub, everything; 2) Execution -- fee/rule marketplace changes have been highly disruptive & arguably poorly implemented; & 3) Structural - Decreasingly desirable Auction format & an infrastructure-less business model arguably ill-equipped to match rising consumer requirements."
If you listened to the conference call John Donahoe and Bob Swan blamed all of this on the economy; the macro-economic environment. But next week, Amazon will announce their 3Q numbers and Q4 guidance and while they may be impacted slightly by the macro-economic environment, their numbers will not be anywhere as dire as eBay. 

This year, Amazon put eBay in their rear-view mirror, but I believe this holiday season they will put eBay out of view completely. This should never have happened and short of the Board of Directors pressing the reset button on this management team, the eBay marketplace will not recover.

Just my 15%

Wednesday, October 15, 2008

Announcements Galore at eBay!

Today, Vice President of Seller Experience, Dinesh Lathi announced several important changes coming to an eBay listing near you.
  • New Look for eBay’s Product Pages
    In the next few days, we’re making some important design updates to eBay’s product pages (i.e. the pages you see when you click on "Matching Products" in search results.) You’ll see two different versions of this page—one style is for Books, Music, Movies & DVDs, and Video Games and one is for products in other categories. Sellers’ items will appear on these pages when they list with pre-filled item information. Basically this is a move to standardized content similar to what Amazon does, where there is a product page and then seller listings are sorted below, except on Amazon they are listed by lowest total price. eBay is using their wonderful Best Match to sort. Here's a example for media - looks similar to half.com


  • Offer Starts: FREE Subtitle for Media Listings
    From now through the end of the year you’ll get a FREE Subtitle upgrade when you list books, music, movies, DVDs and video games with pre-filled item information. Subtitles show up on the new product pages, so take advantage of this offer to help your listings stand out. Hey, its free so make use of it.

  • Introducing Featured First, a New Listing Upgrade
    We’re also introducing a new listing upgrade called Featured First. Add Featured First to your listings for an opportunity to appear in the featured area at the top of the first page of search results. A limited number of Featured First listings are randomly selected to be rotated into the featured area, so there’s no guarantee yours will appear. But this upgrade is still a great way to significantly boost your chances of being displayed on the first page for increased visibility and increased likelihood of a sale. It’s also a great way to jump start "recent sales" for a new Fixed Price listing. This was first introduced in the UK and has now made it to the US. [After seeing the cost below, I would suggest staaying away from Feature First]
    Featured First takes the place of Gallery Featured and is offered for the same price: $24.95 for up to 10 days, and $74.95 for up to 30 days. This upgrade is available only to sellers who have not been demoted in Best Match search results (see your seller dashboard for your status). Also note Featured First is not available for any Motors categories. Gallery Featured is still available for Motors sellers.

  • Re-list Credits Ending for Fixed Price Listings October 22
    As you know, we recently reduced Insertion Fees for Fixed Price listings to just 35 cents for a full 30 days, and just 15 cents in Books, Music, Movies & DVDs, and Video Games. As a result, starting October 22 we will no longer be offering Insertion Fees credits when Fixed Price items are re-listed. Credits will still be issued for unpaid items and are now being extended to single quantity Store Inventory Format listings if there is an unpaid item. Note that re-list credits for Auction-style listings will continue. Make sure to calculate no re-list credits in your costing.

  • Best Match for Store Inventory Format Listings in Search Expansion Box
    As you know, when search results surface a limited number of items, the search results page expands to show matching Store Inventory Format listings available from eBay Stores sellers. Best Match is now used as the sort order for these Store items, using the same factors that apply for Fixed Price listings. These include recent sales, competitive pricing—including shipping—and seller track record. Also, you may have noticed that we’ve increased the threshold for when Stores items appear from 30 listings or fewer to about 50 to show even more of your Store Inventory listings. Sellers, if your model consisted of store listings at the lowest price, this new sort throws that strategy out the window. Best match all-around. 
Lots of things to consider. Its nice how they waited until the the first 30-Day FP listings were about to expire to give you time to revise your strategy.

Just my 15%

eBay Announces 3rd Quarter 2008 Numbers

Real quickly you can get the results from eBayInk blog by clicking on the title of this post or on this link. After the conference call I will have a more in-depth posting:

Highlights are:
Third quarter revenue was $2.12 Billion (up $228 million from the same period in 2007). Net income on a GAAP basis was $492 million ($0.38 per diluted share), and non-GAAP net income was $592 million ($0.46 per diluted share). 
Here is the take from CNBC
eBay reversed last year's loss and beat analysts' expectations, but a weak outlook hammered the firm's shares in late trading.

The online auction site turned in a third-quarter profit of 46 cents a share, excluding items, on sales of $2.12 billion, against earnings of 41 cents a share on sales of $1.889 billion in last year's third quarter.

For the current quarter, eBay now expects to earn 39 cents to 41 cents a share excluding items. Analysts had foreseen a profit of 47 cents a share.

The company also sees fourth-quarter sales falling below expectations, to a range of $2.02 billion to $2.17 billion, versus the current consensus estimate of $2.44 billion.
That guidance is significantly lower than expected.


Just my 15%

Tuesday, October 14, 2008

On eBay: The Little Guy Can't Take it Anymore!

Norma Rae: Forget it! I'm stayin' right where I am. It's gonna take you and the police department and the fire department and the National Guard to get me outta here! 
It appears that some eBay sellers have finally had it; the changes, the fees, the declining sales, the back-room deals with Buy.com and other Internet 500 retailers. For many small sellers there are no viable alternatives to eBay. 

No, they aren't screaming for a union, like Norma Rae, but they want a return to the eBay they helped build and they want Buy.com and the big retailers off their site.

In the past, sellers have voiced their outrage at eBay management, trying to get the press to see their plight. They've tried boycotts, protests, talked of class action lawsuits and more, but nothing really came of it. Now it appears their tactics are changing, or more accurately their "focus" is changing.

Let me lay the groundwork:

Earlier this year, eBay negotiated a special deal with Internet 500 retailer Buy.com. Though details of their arrangement have never been made public, it doesn't take a rocket scientist to figure out that Buy.com isn't paying listing fees. This deal was exactly what eBay Founder Pierre Omidyar was concerned about when he coined the phrase "level playing field" and that idea was reinforced during a video interview he had earlier this year.



This clip is 2:57, but pay close attention to what Omidyar says beginning around the 2:30 mark. I've quoted him below.
"... have people, by virtue of ...of ... their stature outside of the eBay community, some how, be treated better. You know like special deals, behind the scenes, because they're a big retailer and we want to get them to come onto eBay, that kind of stuff, that would have been ... that's a disaster. That's what I meant by level playing field.

So you can imagine the uproar this caused in the eBay community, and I'm sure that Buy.com was surprised by it as well. After all, they were just doing what any large business would do; negotiate the best deal possible. 

The unrest grew as rumors surfaced that more Internet 500 retailers would be coming onto the site in the fall. 

Enough is enough apparently, because sellers are now organizing against a new adversary. They are no longer protesting about eBay's behavior, instead they are concentrating their attention squarely on Buy.com and the other Internet 500 retailers who are waiting in the wings. 

I received a letter today, sent to me anonymously, directed at Buy.com, with assurances that similar letters would be sent to other Internet 500 retailers who might be considering taking eBay's offer. I normally would have dismissed this, but there is a groundswell building here that has some legs.

I've decided to reprint the entire letter in this post, and I've also posted it on the web using Google Docs. This letter was directed to Buy.com, but the sender stated they would send similar letters to other Internet 500 retailers.

Topic: Why we’re not buying at buy.com

Nobody likes a bully. They push and shove to get their way and don’t care about others. Pretty selfish behavior.

Usually they get away with it too. If they are bigger and stronger, who is to stop them?

Well we can’t speak for patrolling the school corridors, but when it comes to companies like buy.com bulling their way onto the eBay marketplace we believe it’s time to take stand. Together.

Everyone knows that eBay is the best place in the world to find a huge variety of merchandise. It is the self-titled “World’s Greatest Marketplace”. The diversity of eBay’s products is matched only by the diversity of people who buy and sell on the site. In fact, it is these people, millions of them around the country, who actually create the eBay marketplace. Without them, there would be no buying and selling on eBay.

Approximately 1.3 million people make a living selling on eBay. Most are hard working Americans like you and me who are trying to make ends meet in a very tough economy. Some are stay-at-home moms and individuals with disabilities who count on non-traditional jobs, like selling on eBay, to pay their bills.
We applaud all of their efforts, courage and hard work and want to support them.

So who is bullying our hard working neighbors on eBay? They are what eBay calls “Diamond Sellers” and they get special treatment and fee discounts on eBay that gives them an unfair advantage over the smaller sellers who are the heart of eBay.
These Diamond Sellers use their size to push other sellers aside by listing thousands of items and monopolizing the categories they list in so eventually they get most of the customers on eBay too. Not exactly the “level playing field” ideology that was a founding principle of eBay. So Diamond Seller growth is coming at the expense of small businesses who conduct hard, honest work every day…Not cool.

What type of company you ask, would do such a mean thing? I mean what type of a CEO wants to answer this question:
“Do you think it is ethical for your business to enrich its executives and shareholders at the expense of working mothers, disabled persons and small businesses around the country?” Uh, next question PLEASE.

So we would like to ask senior management at buy.com what they were thinking when (based on what we can see on eBay) they decided it would be okay to dump hundreds of thousands of items onto the eBay marketplace in return a sweetheart Diamond seller deal on listing fees?* 

* All sellers must pay a fee to list an item on eBay in order to avoid crowding the marketplace with stuff. eBay has historically spoken of how important this listing fee is to ensuring the diversity and quality of products on the marketplace but does not disclose the specific terms given to Diamond sellers. 

Do you think buy.com considered the 1.3 million hard working Americans around the country that rely on eBay to make a living? Did buy.com think that a stay at home mother raising children and using her eBay business to help pay the bills would get a job as an accountant instead? Do they think that an eBay that resembles the local mall and only sells homogenized goods from big name retailers is what this country needs more of? 

We hope not. We’re guessing they didn’t think about these things at all and maybe it’s not their fault. The eBay team and the buy.com team probably had some meetings. Maybe even a nice steak dinner and they looked at the numbers together and smiled and said, “Hey, we can definitely afford desert now!”

Fortunately it’s not too late for buy.com. They can do the honorable thing and excuse themselves from their eBay “test”. They probably didn’t know how many businesses they would wipe out with this deal. Hopefully they have a better understanding now.

After all, if we wanted to buy from them we could simply go to the buy.com website. Isn’t that the reason they added us to the buy.com mailing list (we don’t recall opting-in to that, hmmm) after we made a test purchase on eBay?!

But until buy.com removes their items from the eBay marketplace we won’t be buying from them. We won’t be buying from them on eBay and we won’t be buying from their website either. We won’t be buying from them now or when we start shopping for holiday presents this year. In fact, we’re not sure why anyone would want to support buy.com at a time when they are putting our friends and neighbors out of business. 

After all, nobody likes a bully.
And as for any other large retailers (you know the ones with the huge customer service departments that make you wait on hold for an hour when you call – if you can even find the phone number) who are considering selling their mass-market products on eBay, we strongly encourage them to reconsider.

So, are we calling for a buy.com boycott you ask? No, not yet.

Now for my 15% on all of this: 

I don't believe that Buy.com and these other retailers are bullies, but they do have bargaining power that allows them to negotiate deals that are not available to regular sellers. In fact, the Diamond Seller level hasn't been bestowed on any existing eBay sellers, as far as I know, even though several have met the requirements. One such company was recently told, "don't call us, we will call you" when they tried to open up Diamond talks.

Now, I don't know what impact this letter will have on Buy.com, but I do believe that other Internet 500 retailers, who receive similar letters, will think long and hard before they sign their Diamond deals. 

Honestly, do you think ZapposBest Buy or J&R Electronics would be willing to put their brand on the line in this kind of environment?  I guess, it might be worth it, if sales were astronomical, but even Buy.com's sales have declined since the launch of FP-30, which can't make them too happy. 

Why would any large retailer take the risk of bad PR and mediocre sales, just because eBay threw a great deal at them. Not to mention the extra work dealing with the high maintenance eBay customer. Just the fact that eBay has to bend-over for these retailers and give them sweet-heart deals, is evidence they don't have any real leverage. I asked for a deal every year I sold on eBay and they always told me, "we don't negotiate on price".

Will this protest fail, like so many have failed before? I'm not sure, because these big online retailers have something to lose here. They've worked long and hard to establish their brands, and they would have to be very confident of the rewards in order to risk those brands. 

Where does this leave eBay? Are their 4th quarter earnings estimates, dependent on these Diamond sellers? What happens to eBay, if this little letter campaign is successful? What happens if Buy.com leaves the site, because it just isn't worth it? Where does that leave the "new eBay"? After-all the "new eBay" is being built for these Internet 500 retailers.

Well, we are soon to find out!

Here is Henrietta's take over at the RedInkDiary.

Just my 15%

Do You Still Not Understand Twitter?

Thanks to ColderICE, I found this video tutorial on Twitter, called "Twitter in Plain English". I think it will help you understand the power of Twitter, not only for connections on a personal level.

There are business uses as well. Tony H. the CEO of Zappos is on Twitter, Barry Judge the CMO of Best Buy is on Twitter, just to name a few. It really opens you up to a whole new universe of contacts. 

I keep in touch with my readers, friends, customers, vendors and associates on Twitter. I even found a "style coach" on Twitter. You can also find me on Twitter.

Enjoy!


Just my 15%

Online Sellers Will Have to Work Harder This Holiday Season

I know many of you are saying, how can I work any harder? 
  • Well, you are going to have to manage inventory much more effectively this year. It will be tough to gauge demand with the economy in the shape it is in, so the long-tail may need to be shortened a little so that you don't get stuck with product. Also, your suppliers are dealing with the same issues and won't want to be sitting on a lot of excess inventory so there may be shortages later in the quarter. Watch the demand and keep in close contact with your vendors. You may need to go with smaller more frequent orders.
  • Manage your Marketplaces: By this I mean, identify which marketplaces are best suited for which product. You want the product on the site that will generate the most profit for you and as inventory dwindles, you should shift it to the site that will give you the most bang for your buck.
  • eBay Sellers will have Best Match and Finding 2.0 to deal with. I wish I could give you the recipe for success on eBay, but it would just change next week anyway. I can say this; if you get sales for a SKU/Listing, concentrate on keeping up your inventory for that item. With the "Recent Sales" weighting for Best Match, you can actually "Win the SKU" meaning that because you have "Recent Sales", you will always have preference in search (of course you have to keep the DSR's up). But, the opposite is true as well, if you "Lose the SKU" to another seller, you may just be waisting listing fees if you keep re-listing it -- Concentrate on the winners this holiday season and bag the losers.
  • Coupons and Cash-back will be big sales drivers: eBay and Microsoft are also going to be "buying customers" for you, so make an effort to go compare your product to the competition in the Microsoft Live Cashback site. I've heard of 30% cashback for a lot of items on eBay.
  • Free Shipping on your Website, may be your competitive advantage: You will be competing against every marketplace and big retailer out there. Free Shipping makes sense on the website because you don't have to pay the marketplace fees on top of everything else. Get creative! I'm not so sold on Free Shipping on eBay, but if it increases exposure in search, you may need to consider it.
There will be winners and there will be losers this Christmas, if you don't stay on top of each element of your business this Q4 you may be the latter.

Here are some great articles on what to expect this holiday season:

Just my 15%