Sunday, March 29, 2009

While Some Run Away From eBay, Mercent Moves Closer.

Over the last couple of years many 3rd Party Software vendors have diversified off of eBay to other marketplaces. As eBay has slowed down, many of them have begun searching for growth elsewhere. 

Now, kind of like Salmon swimming up-stream, 3rd Party software vendor Mercent has actually expanded onto eBay. 

Mercent began in 2004 by integrating large retailers onto the Amazon platform and now they are doing the same with eBay; through eBay's Large Merchant Services. In November of 2008, Mercent launched SmartBargains on eBay and last week they announced the launch of online retailer Altrec.com.
"Mercent™, a leading provider of online marketing technology and services for retail merchants, today announced that the company is an approved member of the eBay Certified Provider Program. The program qualifies companies with expertise and experience in growing eBay seller businesses, and provides sellers with the tools to locate them.  Mercent also announced the launch of a new eBay storefront for online retailer Altrec.com, integrated with eBay’s Large Merchant Services using Mercent Retail™, the company’s hosted online marketing software." 
"By partnering with Mercent, the extension of Altrec.com’s e-commerce presence onto eBay was predictable and efficient, and we’ve seen immediate results,” said Kevin Bauer, VP of Business and Product Development for Altrec.com.  “Our product pricing, inventory, and merchandising offers are all automatically updated on eBay, resulting in a high-performance eBay presence.”

Mercent provides enterprise retailers like Altrec.com the ability to optimize listings across eBay, and efficiently process high order and payment volumes through eBay and PayPal. Mercent is the first eBay integrator to leverage eBay's new Large Merchant Services, designed to increase profitable, high-volume product sales for large sellers on eBay." 
Mercent seems to be bucking a trend here, but it looks like they see an opportunity to introduce their clients to a completely new market and customer base, after-all everyone is looking to grow incremental sales. Look for Mercent to launch more large retailers on eBay in the future.


Just my 15%

Friday, March 27, 2009

Shopping.com Listings on Completed eBay Items

This has actually been happening for awhile now and I didn't blog about it because it doesn't seem to do anything except get everybody riled up. eBay will continue to maximize their use of sponsored ads and shopping.com listings on pages they feel are not competitive; in this case a completed listing.

I wasn't going to blog about this but my buddy John Lawson of ColderICE did a video blog on it so I thought I would post his take here at MyBlogUtopia




Just my 15%

Wednesday, March 25, 2009

Another eBay Top Seller Summit

I know I haven't been around much lately but I still hear stuff that is going on at eBay. Most of the time I shrug but today I figured I would just blog quickly about the new Top Seller Summit being held at a secret location in Florida.

It will run for one day and then we won't hear anything knew until April sometime when I hear the big announcements are going to be made.

I'm not real sure why it took so long for them to hold another of these Top Seller meetings but unlike the last one when no real information leaked out, I'm hoping somebody gives in and shares a little. 

Just my 15%

Wednesday, March 18, 2009

Half.com Moves to eBay - My 15% Update!

I've been talking about this move for years now, I'm glad I can finally say, "I told you so!" BTW, this change was tested back in the days of eBay Express.

The details are a little bit murky and the deal isn't actually happening until May, but lets take a look at how this change might actually work:
  • Half.com listings in Books, DVD, CD and Video Games will be available on eBay.com only if the Half.com merchant opts into the program. 
  • Items with a price under $1 on Half.com will not show on eBay.
  • There will be no listing charge to be included on eBay, but the items will not be available in search, they will only be available via the product pages. The product pages do not get as much exposure as items in search, so the additional exposure for Half.com listings may be minimal.
  • The product pages look a lot like Half.com; where the top 4 offers per product condition (New, Like New, Very Good, etc) are shown on the first page. Half.com results will be mixed in with the eBay listed items but still only 4 will show (per condition) on the first page. We all know that if you aren't on the first page, the chances of a sales are greatly reduced.
  • Orders will be processed just like they are currently on Half.com, except payments will be made to your PayPal account and available immediately. It will be interesting to see how eBay manages the sales process when a merchant has a Half.com listing and an eBay listing in the same order.
That's the basics on how it actually works, but much more important is how sellers react to the change. 

Since there is no cost to list, I can't imagine that current eBay sellers will not begin listing also on Half.com, but since there will be limited visibility of Half.com items on eBay, most will continue to list on eBay, hoping to get additional exposure/sales from their Half.com listings.  

On Half.com items are sorted by lowest price and sellers are only rated on 3 DSR's (No shipping cost DSR) but DSR's have no impact on sort order. Half does not have Best Match.
We don't quite know how items will be sorted on eBay after this change, but lowest price seems to make the most sense -- who knows what eBay will decide on.

I'm not sure how much of an impact this will have on eBay sellers, it really depends on how many buyers actually click onto the product pages. If that number is large, the impact may be substantial, if very few look at those pages then it will be minimal.

I know a lot of sellers are worried about the increased listings drowning out their paid eBay listings, but I don't think it will effect DVD's, CD's and Video Games as much as it will Books; especially text books, unless the product pages become the standard way buyers find product.

For the most part Half.com is [mostly] just a text book marketplace and two times a year (Jan and Aug/Sept.) it gets lots of traffic. In between all of that it isn't all that vibrant of a site. 

The real interesting aspect of this for me will be how Textbooks begin to sell on eBay.  With Textbooks students usually search by ISBN number. If this search method is used on eBay it will show the product pages and that kind of traffic could be substantial.  

If this test is deemed a success by eBay, look for this approach to be duplicated in other categories with Shopping.com listings.

Update:
I spoke with eBay about this coming change and most of what I have written above is accurate but the section on DSR's needs a little more explanation: Half.com only rates sellers on three DSR's.  -- the one they do not rate sellers on is Shipping Cost. Having one less DSR will not advantage or disadvantage a Half.com seller when their items are listed on eBay.

I was told that this change is a test of a new buying experience on eBay and it made sense to use media as the guinea pig (my choice of words). 

Certainly there will be sellers who try and game the system but how much of an impact this will have on current eBay sellers depends greatly on how many buyers click over to the product page. Knowing eBay buyers, they hate change just as much as sellers.


Just my 15%

Thursday, March 12, 2009

eBay Analyst Day - Morning After

After a big party there is often a huge hangover. So, what are the analysts saying the morning after eBay's big PayPal coming out party?

Jeetil Patel - Deutsche Bank
"eBay hosted its analyst day yesterday, at which management provided details behind its financial goals for 2011. While filled with long-term optimism, we thought the analyst event lacked near-term reality with respect to the current deteriorating fundamentals. In light of no near-term (2009) guidance, anticipate acceleration in growth, competitive pressures and economic backdrop, we think it's difficult 
to put much credibility into the 3-year plan. We think investors should gauge eBay against near-term performance. We reiterate our SELL."
Justin Post - Bank of America/Merrill Lynch Research
Analyst Day overview - PayPal will do heavy lifting
EBay held an analyst day, introducing its new management team (70% of top executives are new or in new positions) and outlining its plans to turnaround its core while continuing to grow its PayPal and Skype businesses. Biggest positive: 2011 growth targets for PayPal ($4-5bn) and Skype ($1bn+), which even with flat Marketplace rev. would put total rev. at $11bn, well above Street at ~$9.0bn. Biggest negatives: No obvious fixes to marketplace share losses, and US net debt position limits ability to attract value investors with buybacks.
2011 outlook well above the Street
EBay expects to drive $10-12bn in '11 revenue vs street at $9.0bn (BAC-ML at $8.8bn) with $4-5bn from PayPal, $5-7bn from core, and $1bn+ from Skype. Implied operating income target is $2.3-3.9bn, above our $2.1bn estimate even at low end, and EPS at midpoint would be around $2.10, vs our $1.54.
Why we are lower than management's outlook
Guidance is based on a return to a more normal economic environment in 2010, with marketplace maintaining share in '10 and growing share in '11. With Amazon, Craigslist and Google growing users, we expect marketplace to remain under pressure, which could have a spillover effect on PayPal and advertising.
Maintain Underperform - share headwinds in '09
Upbeat presentation, but one message from the day was that eBay was still early in their turnaround and that things would get worse before they would get better.  We believe that the Market is putting companies, and especially turnarounds like eBay, in a "show me" box and we think other stocks are more likely to react positively to signs of an economic turnaround.
I will post additional Analyst notes as soon as I receive them.

Update: Here are three more from the Silicon Alley Insider Blog. "Analysts Barf All Over eBay (EBAY)"


Just my 15%

Wednesday, March 11, 2009

eBay's Big Plan - CNBC Video

PayPal, PayPal, PayPal















To see the entire interview go to CNBC

Just my 15%

eBay/Amazon Smackdown CNBC (Video)














Just my 15%

Move Along - Nothing to See Here!

That's how I feel about today's eBay Analyst day -- the first one since 2006. It is going to be much ado about nothing as far as I can tell.

Looking through my crystal ball, here is what I see.
  • Paypal, Paypal, Paypal - They will lead off the presentations today by discussing Paypal and Paypal and Bill Me Later will take up a lot of the discussion today.
  • Marketing Services - The new shining light for eBay Inc. Marketing Services is now a billion dollar business, made up mostly of advertising and StubHub.
  • Marketplace - We still face challenges in the business but we are on the right path, yawn.
  • Skype - Continues to be a great stand alone business that is not currently a distraction (until you analysts ask about it)
There you have it, the entire day, condensed into 4 bullet points. 

eBay's share price has gone up in the last day with the rest of the market, by the end of the day, you will know what Analyst think of their plans. Now move along there is nothing to see here.

Just my 15%

Thursday, March 05, 2009

Amazon Gets Into the Buy Back Business.

Sometimes great ideas just take resources to make them happen and when you are Amazon, you have a ton of resources.

Today we find out, thanks to ZDnet, that Amazon is now in the Buy Back business, though they call it Trade-In. Consumers can trade-in their used video games to Amazon in exchange for a credit on Amazon for future purchases. Could DVDs, CDs, Books Consumer Electronics be far behind.

It isn't clear what Amazon does with the used Video Games once they have them, but rumors have circulated that they are working on a program, where they will begin selling used "Certified Used " video games and compete directly with their 3P merchants in the used space. 

My guess is they would not sell them directly under the Amazon name but more than likely through the Warehouse Deals business, which currently handles returned merchandise, etc.

Tin Hat Warning!

I don't want to be an alarmist here but this opens the door for Amazon to compete against their 3P merchants and my guess is that won't go over well.

I know this idea works because I bought back used media this way. When Amazon gets into this business it gets a little scarrier for 3P Merchants in the media category.

Just my 15%

Wednesday, March 04, 2009

What I've Been Up To!

I know you all love my recap posts, so here's what I've been up to lately:
  • Not as much blogging: I'm sure my regular readers have noticed I don't post as much these days and there are a number of reasons for that. First reason is; I have a day job and that has changed my schedule a bit. I still haven't come up with a better schedule for blogging. Second, I'm tired of writing the same eBay stuff. After 2 years making suggestions and writing about eBay, I'm pretty much burnt-out. 
  • I'm really enjoying my time at Buy.com. This is week number 6 and I'm starting to get into a routine. Buy's marketplace business is growing and there is a ton of upside, so it's a lot of fun being part of that and for the record, CEO Neel Grover does not have horns.
  • My own retail efforts are on hold. While I am still selling used media items through INet Media Source it is mostly liquidation of inventory that I have in at Amazon's FBA warehouse. I'm getting down to the really long-tail items now because I'm not replenishing product through the Buy Back website any longer.
I'm committed to making Buy.com's marketplace business a win-win selling option for online merchants. We aren't open to every merchant yet, but as we grow categories and our product catalog we will expand opportunities for many online merchants. Right now we are very much under-the-radar as a marketplace, but we won't be able to keep the site under wraps for much longer.

Anyway, that's what I've been up to in recent weeks and I hope to get back to more regular blogging as I develop a new routine. Hang in there, I'm not going away.


Just my 15%