EBay's Bid To Go Beyond Auctions Disappoints 83
Carl Bialik from WSJ writes "eBay is having trouble attracting online shoppers with its new fixed-price sales site, the Wall Street Journal reports. From the article: 'Jonathan Garriss, executive director of the Professional eBay Sellers Alliance, an independent group of eBay sellers, estimates eBay Express accounts for less than 1% of sales for the group's more than 1,000 members, who together sell more than $1 billion a year in merchandise. And while eBay's main auction site attracted more consumer visits than any other online retailer in November, eBay Express was at No. 87 on the list of top shopping and classified sites, according to research firm Hitwise Pty. Ltd.'"
eBay doesn't get it (Score:5, Interesting)
They've also done a piss poor job of keeping their sellers happy. They raise fees twice a year, regardless of what people say and always say it's being done for the "health of the marketplace." Their spokesman Hani Durzy says the same shit over and over. yet, eBay is FLOODED with goods and sellers The marketplace is so diluted on eBay now that it's very difficult for sellers to make money anymore.
I don't know what the solution is, but eBay certainly doesn't have it. eBay Express is a dog. They threw in the towel in China (which was a HUGE initiative for them the past two years that has failed miserably), their stock is flatlined and every initiative outside of auctions has essentially failed.
Half.com? (Score:4, Interesting)
Re:eBay doesn't get it (Score:3, Interesting)
Well, it's probably worth remembering that at one time, Amazon.com was "defined in stone" as an online bookstore. That's all they sold, and they were by far the largest book seller online. It was to the point where when Barnes and Noble announced they'd be creating a web site, a lot of analysts wondered why they'd bother - despite BN having dominated the offline book market for years.
Today, I've counted a bunch of comments here, and several quotes in the linked article, saying they'll just "buy on Amazon" rather than look for anything on Ebay Express. So clearly, the definition of Amazon.com has changed in peoples' minds. It can be done.
I agree that it's rare, and that it takes a combination of good luck and savvy strategizing. You have to pick your battles and expand your reach slowly into areas that make sense. But businesses don't always have to stick to their "core" - lots of big companies started out doing one thing and gradually moved into other areas. I mean, IBM used to only make accounting machines; they were synonymous with accounting machines. They gradually moved into typewriters, then computers, then services and more. Nowadays it's those services that are their "core" business - they have almost completely moved away from what made them successful, but they are still successful. The same can be said of any big company that's been around for a while. GE used to just make light bulbs, for another example, but now they make aircraft engines, they have a large financial services arm, etc. and all of these are money-making businesses for them.
Ebay's buy it now was in jeapordy (Score:5, Interesting)
I am curious though, how long ebay can continue to raise it's fees and continue to offer LESS features and service and still maintain it's business model. Personally, I think the worst thing ebay ever did was to go public. It never needed to go public, it was a cash cow and was one of the few initial Internet businesses that actually made a LOT of money by doing essentially nothing, but hosting servers. Now ebay's future is dictated by the stockholders.
Slow lingering corporate death.... (Score:3, Interesting)
They announced a few days ago that they were going to relaunch their China operation, due to the fact that this market has failed for them. Desperate measures. It's taking a little longer than Japan, but surely dying nonetheless. Pretty much every day since their Eachnet purchase they've been bleeding customers.
Their stock price is less today than it was the same time last year, which is less again than the same time the previous year. It is slowly and surely sliding downwards.
The talented Jeff Jordan is gone, Meg Whitman has seemingly been conspicuous by her absence from the media spotlight all year, and externally seems to have done very little to change the companies' fortunes. Growth overall is stagnant or negative, and this Express site is obviously just one more failure.
I think the fundamental issue is one of completely failing to either listen to, or even make a token attempt to understand the needs of customers. They've completely failed to address a number of fraudulent behaviors - especially of Power Sellers - in the name of profit. They're like the anti-Google. 1...2...3... let's do eVil!
Buying on eBay is relatively easy to accomplish technically. Of course, you have to hope and pray you've not sent money to a fraudster, and you are most likely going to be paying through the nose for shipping. But technically it's not too time consuming.
Selling, however... is by no means easy. You have to jump through a lot of hoops to sell one item. It can take an hour or two list something, and once you do, you will be paying eBay and Paypal a significant percentage for your hassle, so you'd either better be very dedicated, have no wholesale costs, or as forementioned, scam the buyer with extra shipping charges to cover the eBay fees. When something goes wrong, you are on your own.
Economies of scale and listing tools may help pro sellers, but are way too much hassle for someone that just wants to sell some old piece of crap they found in their garage. Selling on Amazon is considerably easier. Selling on Craigslist is easier. Selling is easier pretty much anywhere else.
Up until 2003 every Christmas period was one of fantastic growth and revenue for eBay. Their stock price shot up every quarter. Since there is still demand for Internet traded goods, the only explanation for their current predicament that any reasonable person can conclude is "Management Failure".
What happened to Google's Base thing? I've heard nothing about it for months. My feeling is that the only reason eBay (and actually Amazon and a few others) are still around is because: 1. we still have no good Internet Micropayments system, and 2. Search engine technology still has much room for improvement.
If I were an executive at Walmart, or Microsoft, or Google or one of the many other 452 Fortune 500 companies more successful than eBay, I'd be watching them closely. I'd expect these executives to be circling like sharks or vultures. eBay looks as though it is in trouble for sure, maybe not bottomed out yet, but thoroughly on their way down.
"Buy it Then"...
Re:What was the point? (Score:3, Interesting)
A few years later, ebay had exploded. I stopped even looking on the website when I realized everything cost more then newegg and other retailers. I only pop in occasionally to see how much people are getting gouged on the latest consoles.
Ebay sellers seem to do ok, but I don't understand why people are willing to pay more for a riskier experience when there's alternatives available.
Re:eBay doesn't get it (Score:5, Interesting)
Well, there are a lot of suckers out there for sure. But plenty of people in the other end of the sucker scale are paying those higher prices you are talking about. For instance the smartest Brazilian buyers will pay higher prices to eBay sellers because they will ship to Brazil, and be flexible on what they declare to the post office as the package contents. Oh, and before you get too imaginative, it just needs to be declared as worth less than US$ 50 so that it goes through customs without the 60% import taxes. How smart is that ? Well, an unlocked Treo 650 will cost, shipping included, less than 50% of what you would pay at a Brazilian cell phone store.
Even if I could convice pricewatch and froogle stores to ship to Brazil, they certainly would not be flexible on what they declare for customs, and the "Sender" label not being "John Smith" would also be a magnet for customs inspection/taxing.
I do not really know how much this "international consumer arbitrage" is a factor compared to regular suckers, but I can tell you it is a factor that will only grow over time, as people get used to it.
An eBay seller's experience (Score:2, Interesting)
For a while, we were the largest eBay Store in our category, with about 12,000 items. We also ran about 1,000 auctions every week, mostly to drive people from the auctions to our store items (if a potential buyer was interested in one kind of product, our auction listing would give them an option to click on related items in our store). A few months ago, in an effort to drive business toward eBay Express, eBay dramatically increased the rates for eBay Store listings (from between 150% and 400%, depending on the cost of the item). This price increase had two results. First, many of our competitors opted to leave eBay completely, preferring to try their luck with other venues. Second, our profit margin on eBay dropped significantly.
We haven't seen any significant sales through eBay Express, and we don't expect that to change. I'd guess that eBay has probably lost a significant amount from this experiment, because their attempt to push people toward an undesirable venue has caused them to lose a large number of high-volume sellers.
Re:But they are having no trouble... (Score:2, Interesting)
Here is how Ebay ripped me off, scam artists take notes:
I had an iSight that I had sold for about $100. The buyer sent me payment via PayPal and I promptly sent the item via regular US Priority Postal mail. The buyer said they never received the camera and filed a complaint with PayPal. Even with my perfect feedback, Ebay assumed I was guilty until proven innocent. PayPal deducted the money and said they will only return the money if I provided a tracking number. Because I sent it regular mail without a tracking number I could not prove that I sent the package, and so they kept my money. In the end, the guy got the camera for free and I got my account suspended.
I was a good honest seller and still got burned. Ebay is not safe at all for the seller, and PayPal will do NOTHING to help you out if someone tries to scam you.