ebay Culling the Herd?

[robyn]

The "buzz" this week is that on line auctions are falling to the wayside in favor of fixed priced venues. Is it possible that the CEO of ebay (ebay) has access to a crystal ball (or medium), which told him that the future of on line auctions is not in ebay's future? Or, is all this "buzz" the result of ebay sellers simply being maneuvered to leave ebay on their own accord and/or adapt to a 100% fixed price format?

It would be unreasonable to think that ebay sellers would wake up today and find an ebay announcement proclaiming that ebay will no longer be an auction venue by the end of 2008. Then again, ebay recently made an announcement that ebay Live Auctions will close by the end of 2008 and while it's not known how much revenue ebay Live Auctions generated for ebay in 2007, their partner, Live Auctioneers, LLC reportedly earned $100M in 2007. If this number is true (as reported by Live Auctioneers, LLC) one has to wonder how much of Live Auctioneers revenues contributed to ebay's bottom line.

The next question would be, "what Fortune 500 company gives up any part of $100M in revenues", especially in these uncertain economic times?

The changes to ebay during the past few months have been dramatic. ebay sellers have responded to these changes by posting negative You-Tube videos, blogs, articles, posts, organizing boycotts and sharing their negative experiences with both ebay and PayPal. The CEO of ebay has referred to all of the negative press as "noise". However, the "noise" has elevated to a point where ebay sellers are spreading their wings and flying the coop!

Is this what ebay wants?

In my humble opinion, ebay is strong enough (financially) to withstand ebay sellers who refuse to adapt to change. If the end goal is to move ebay to a "pure" fixed price format venue, ebay sellers who adapt to the current changes and those who sell exclusively through BIN (Buy it Now), may benefit in the long run.

Could their be a culling of ebay sellers in progress? Culling is the process of picking out others, especially something rejected because of inferior quality. In other words, the "herd" of ebay sellers may be being thinned out in order to move forward with a grander plan.

The name "ebay" can stand for anything..

While the brand has come to designate ebay as the on line auction giant, what's in a name? ebay has methodically acquired and/or launched mini-venues (within its own venue) for quite some time. Half.com, Shopping.com and StubHub.com are good examples of what a venue can do to cull the herd from within.

There are some benefits to ebay in moving to a "pure" fixed priced format:

    * Increased buyer satisfaction.
    * Reduced fraud.
    * Reduction in labor force.

Can ebay morph itself into another Amazon?

While ebay could begin building fulfillment centers across the United States, this process would take some time. Those holding ebay stock (in long positions), might have some patience but, it's might be unreasonable to expect shareholders to "watch and wait" while ebay reinvents its business model. This may be where the help of others is needed.

The deal (partnership) with Buy.com may prove that ebay can open its ................ to partners, who can flood the marketplace with merchandise. Buy.com did just that by listing 500,000 items for sale on ebay, however, their sell-through rate of 5% was a bit disappointing.

Who suffered from the Buy.com flood?

ebay sellers offering merchandise in the same categories. What ebay may or may have not overlooked is that sellers are buyers, buyers become sellers and it can be one glorious food chain - if balanced correctly. The invitation to Buy.com to flood ebay ................ with BIN's, upset that delicate balance.

What's NOT fair?

Those selling on ebay have little recourse against bad buyers. Sellers can no longer leave negative feedback against those buyers who abuse, berate and threaten to leave negative feedback if the seller does not bend over backwards to please them. Those who worked for years to build their ebay feedback did so for nothing.

ebay decided that only the last twelve months of feedback makes a difference. In addition, ebay sellers quickly learned that neutrals turned into a "new kind of negative" and many found their overall feedback percentages had declined to the point of the last straw. Just how many straws can placed on the camels back before it breaks?

Why include neutrals into the equation at all? What was the purpose? Who did it help, who did it hurt? Here's some speculation..

There was nothing to be gained by calculating neutrals back into overall feedback percentages. Neutrals are just that "neutral". The transaction was neither good nor bad. No doubt, the decision to count neutrals into the overall scheme of feedback percentages was bad for the sellers (only). There was absolutely no purpose (no foreseeable gain) to ebay in upsetting its sellers - unless you want to "cull" the herd.

How does it ALL add up?

Judging from what could only be described as a "Seller Exodus" off of ebay (coupled with the major changes), one might think that ebay has a long-term plan. It may be that the plan for the future was concocted when Amazon leap frogged over ebay with stellar earnings reports.

Meg Whitman retires and Bill Cobb is on his way out. The ebay seller conference for 2009 has been canceled and ebay's new CEO (for better or worse) has taken hold of the helm of the ship with a map in hand, however, he may be in need of a GPS for a more accurate read on ebay's final destination.

[bazak]

The executive level of Ebay enacted policy change in less than a forthright manner. There was no rallying of the troops. There was attempt made to honorably address the issues and problems within Ebay.

How can anybody trult trust a company that acts in this manner. Their actions towards the sellers showed me the potentials of dishonesty that can continue to be expected from the top tiers of Ebay.

I don't trust cowards.

[glassyman]

Thank you for the very interesting article.


Yours is the first that I have seen that addresses a possible reason for the Neutral feedback = Negative issue. You said, "There was absolutely no purpose (no foreseeable gain) to eBay in upsetting its sellers - unless you want to "cull" the herd."


Brilliant! Of course, that makes sense finally!


The sellers whose feelings can be hurt by such a move are the smaller, caring sellers, who put their heart and soul as well as time and money in their business. Bigger sellers, or those with tough hides, will not be phased by it.


It's sad. I had a great time on eBay. I spent and made many thousands of dollars in my 8 years there. Now it's time to move on, just like they want me to. I'm not going to stay where I am made to feel like a second class citizen.


The auction culture is not gone. It is moving to other sites. There are DOZENS of other Online Auction sites out there. They are ALL growing. It's pie in the sky to think sales at any of them will match eBay's sales volume for most sellers for a while, but a number of them hold real promise (some of course will not survive, but that's the way of business). Many of us have made the move to sites where the other sellers with heart and soul are. It's like the old days at eBay. Slightly funky sites with new ways to learn, but it's profitable (a little at first, but getting better weekly), and the companies and buyers/sellers are a joy to work with. With the large influx of sellers (and buyers) these other sites have seen since January we smaller sellers that eBay has thinned out should be up to normal selling speed before the year is out (with a much better profit margin).


I am not foolish enough to belive that eBay will die off because of this, but they will, in the end, be diminished. They will be just another fixed price site. The magic of IT has left the building, and eBay has done it on purpose. In 10 years I expect business schools will use them as a prime example of what NOT to do when changing your company business plan. A far smarter thing to do would have to left auctions and auction seller related stores as they were (with listing costs at a reasonable level and feedback pre-DSR) and spun off a stand-alone fixed price venue (Express was already in place) where the huge sellers with hundreds of identical items could have happily listed their wares under the eBay banner with no feedback to buyers, and DSRs for feedback.

They have made some serious errors. They have angered a lot of people. One thing I don't think they took into consideration is their sellers, by their very nature, are tech savvy. Word of mouth travels very fast on the Internet. The eBay brand is getting a lot of bad press out there on all the social networking sites, blogs, forums and tech news sites. Of course the old ways are at work too, the playgrounds, lunchrooms and friends telling friends. They have driven off part of the herd they thought they didn't want, but we've taken a lot of new calves with us that they will never see.

[janet]

I believe that the auction v fixed price argument has been overblown. Ebay has gone downhill to the extent that items selling on one bid has now become the norm.

What will sink Ebay is their moving away from the ability to find something different on their site, whether it is a vintage collectable or a hand-crafted item. That is Ebay's USP, you can find the commodity items anywhere, online or in shops.

Perhaps a better analogy than culling the herd is killing off bio-diversity, there are enough examples of ecological disasters to show the folly of that. Ecommerce is no different.

[dandee]

The above three comments show level-headed thought processes. I especially value the line as stated by Watching the Wheels:


"How can anybody trult trust a company that acts in this manner."

The bottom line financially is always about profit. We all know that. But to its sellers that are the foundation of ebay it is in-your-face vicious. Across the board.

eBay will not be able to change its business ethic, which actually seems to have worsened with new leadership. Who indeed would trust such an amoral enterprise?

[roxy]

Buying on ebay is no longer a pleasant environment. Buyers determine end demand and having been a 50 transaction/year to 1/year customer the obviousness of the problem is one management must surely recognize.

[Jeff]

housands have closed their stores and ended listings. There is a revolt going on...come check it out: forums.ebay.com/db2/fo....

[wowo]

Let us not forget that both the founder of eBay and I believe Meg are still on the board. This trashing is with their green light. I would be concerned for the political party Meg is working with as American's are being hurt all around the globe from ebay / paypal. They can crush us and forse us off eBay but they can not flea from the amount of people they have hurt with their tactics. They tried to tell France how much money they put in their economy and that sure didn't work for eBay as now for 3 months they get their court loss on their home page...Next France court mid month...hmmm...

[Webster]

User 205839 has nailed it straight in, in my opinion. As a new CEO, JD wouldn't be allowed such EXTREME freedom for change without corporate approval. Not with his track record. (I still think Meg steered eBay proper into a corner, saw the writing on the wall, groomed a patsy, and jumped ship!)

eBay's lost several recent litigations in France. France is not tolerating eBay's retoric.

Thirdly, in complete honosty, Meg on board McCain's political campaign has given THIS voter serious pause.

[jordan2008]

Donahoe is a past CEO. it is only logical to assume that the newly acquired position that he holds was part of the original job offering.

Pierre hired Meg. I fail to understand the users who feel that he was somehow bamboozled by Mr. Donahoe.

P.T. Barnum had a quote about suckers being born ...


If you are unwilling to think for yourself who really is to blame. The users are unfortunately Ebay's enablers.

Et tu Brute!, I agree with your political assessment.

Ebay was found guilty by the French of fraud. Does this set legal precedent?

[axnwr]

EBay is simply a search engine with a commission based sales form attached.
There are now alternative ways to sell your merchandise, especially if it is unique.

I tried twice to sell an antique equestrian painting on eBay, couldn't even come near my reserve.

Then I decided I would sell it on-line on my own.
I Googled "antique equestrian paintings" got a list of dealers from Sydney to Stockholm, wrote a cover email and some photos.

I sold it to a dealer in London for my asking price.
Well past reserve and with no fees other than Paypal. Paypal is eBay's questionable double-dip.
And I do ok on Craigslist too.

I am now in the process of learning how to use Google's payment system.
I'll still sell on eBay but it is no longer even my third choice.

As for chasing away the smaller sellers. They've brought eBay billions.
If eBay doesn't want that profit, some other search engines, preferably Google will figure out how prettily-positioned they are sitting.

One thing I hate after a decade of selling on eBay is how there is no way to communicate with management.
I am a business woman with a lot of innovative input and am analytical and articulate enough to have been an asset with any business.
But I have never once had them respond to any number of my ideas.
Both of us have lost profit because of that.

They even frequently delete my writing from the discussion boards so other sellers can't consder any of my alternative ways of looking at things.
EBay is discouraging diversity in favor of ever increasingly sterile models in a marketplace where it no longer is the only player.

Dumb and dumber to ignore the potential in your sellers. It's no coincidence that Google nurtures ideas and eBay deletes them.

gandolina(at)hotmail.c...

[offband]

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[doper]

The root of the problem with eBay is that the respect it has for its sellers is akin to "a mother dropping her newborn baby off in a hospital lobby and never looking back". This is a corporation that treat the people(sellers) that bring in its annual billion dollar + revenue, worse than the lowest creatures of society.

They bring in big CEO'S,people to head up their company who exist by being brainwashed and programmed to act like a robot with there scripted responses that are as predictable and ridiculous as a book I have already read. They all get big fat paychecks and the numerous other perks only criminals could enjoy and survive and exist upon because they are programmable, money hungry,have no conscience,are blood-sucking,corporat... monsters who eventually resign when they have had their fill on the blood and sweat of so many who have dedicated their lives to building ebay,the countless hours sometimes 14 hr days.

for not a lot of money,just satisfaction,to where it is today. They relish in their enormous fees,and lies,lies,and more lies and give absolutely nothing back, no recognition at all to the ebay sellers who provide outstanding performances and 14- 18 hour work days, except a slap in the face,time after time.
Suspended accts,VERO Violation,blah blah blah They want to bring back the "buyers" hilarious indeed...They have done a pretty shabby job at best w/this Playground.New buyers= lots of problems,bid retractions,f/b problems etc..and e-bay handed them a form to fill out called "e-Bay lister for dummies" and let them play around and said hey...

"what the hell" while your at it go ahead and destroy user id such and such that only took them 8 years to build,but hey you are new,we are greedy,we want our $,and are willing to take any means necessary to get that!Wakey,Wakey e-Bay the very sellers that made you who you are today are slowly dwindling to other e-commerce avenues and I am starting to see more and more sellers/buyers of your kind dominating the market.Maybe,that is what you want?Someone on the same page,the same criminal level as yourselves over there hiding behind closed doors in San Jose.How do you walk past that lawn ornament every morning that so proudly displays your company name and not be ashamed?

Do you look at yourselves in the mirror and deeply reflect upon who you really are?I am sure you only take enough time to compliment yourself and pep-talk yourself into what a valuable citizen/robot of e-Bay you are.I am a mother of a 1 yr.old and a 13 yr.old.I had a small store that suited me well and I earned good income.e-Bay has taken very inappropriate actions in a suspension of my acct with no explanation and I have a underpaid college kid telling me on the phone "suck it up" basically..

I do not think I will return when reinstated.If we keep "selling" e-Bay keeps using.e-Bay is not crack,although I thought they were at one time.We all need to band together and protest.If you think you are "invincible" sellers,you are wrong.You may wake up one day only to find that everything you worked for was wiped out and your store basically says "closed" owner not allowed back in.No further information provided.But we do want our "fees".I just can not go on...I am too disgusted,Maybe I will write a novel.A nice site to visit to add humor to your evening... www.ebaypigs.com Rather amusing.Mom of 2 booted off e-Bay