I'm not sure who your talking to. Obviously you haven't read much of this thread.
Ebay wronged a lot of people with the huge new fee hike. I'm not afraid to inform people about that here or in the media.
<�If the last sentence left me thinking that Rashtchy bought into the hype caused by sellers, he immediately proved me wrong as he added that it is with buyers that he sees the lack of activity coming from, not sellers. He therefore doesn't believe eBay's efforts will be successful and sees eBay spending more on marketing and product development, leading to rising costs.�>
The analysts are starting to get it. I believe Ebay will be beating a dead horse. They will have to spend a ton of money trying to convince buyers that the cumbersome auctions are the way to go. Instant purchase is so much more convenient and that�s why I believe this effort will be futile. This management team missed the boat.
(continued from last post)
The following was a question and answer from today�s Brown Bag Lunch discussion with Ebay�s Chris Tsakalakis Vice President
�You have eliminated stores in searches.�
�Not really. Earlier this year, we included all Store Inventory listings in search results for a period of just over 7 weeks. When we saw that this was changing buyer behavior in a way we did not like, we changed search to the way it had been since June of 2005 where a link to matching Store Inventory listings appear in every search result and up to 30 matching Store Inventory listings appear in search results if there are 30 or less matching core format listings.�
The problem with this statement is I haven�t found a store seller around who didn�t do very well during this period when stores were in the main search. I did very well during this time period. His statement is very telling that they didn�t like the buyer behavior when it came to the store listings. This tells me they are aware buyers liked the instant purchase formats. The thing they did not like is the store sales were taking away from the core listings. This was going to cut into their high revenue auctions and they didn�t like it. I understand the stores are slower growth but store sellers still bring in a third of Ebay�s revenue. I believe that could be a little higher if the store inventory can be seen by the buyers. I understand why Ebay wants to stick with auctions but also I understand what works for me and other sellers & buyers.
Ebay wants a growth rate like when they were an up and coming business. They are maturing company and the growth rate will eventually slow. They are trying to force what once worked that may be now obsolete or less attractive. I believe instant purchase formats are the future of e-commerce and the core should be shifting that way. With Ebay going against the grain and all the strife they have caused over the years, I believe their new strategy will fail.
Was I happy with Ebay before the fee hike? It was already expensive when you count listing fees, subscription fees, final value fees, etc. I would say it was acceptable in a business sense.
I understand the new strategy with moving listings to the core. It was brought up again today in the Brown Bag Lunch discussion on the Ebay message board that the store sellers bring in 33% of Ebay�s revenue. That is when you combine the auctions they run, store listings, subscriptions, FVF�s, etc. This is a huge gamble for the company to try to implement this new strategy. I understand the slower growth rate for stores. This company is going to eventually have slower growth as it matures. I don�t believe auctions are the future of e-commerce or at least not as much. This is one reason I don�t believe this strategy will work. Instant purchase formats are going to be the future of e-commerce. In this day and age people don�t have time to wait for an auction. They want it now and the sooner the better. I have noticed they will pay a little more for that convenience.
Forcing sellers out of the stores by making it too expensive is crap. There�s no way around that. Especially how many sellers it affects and how hard they worked to make it so. If the store listings fall and they have to lower fees then the strategy has failed. I believe even if the core remains low or stagnant, the strategy has been a failure. I figure there are 60M to 80M listings in store formats. They are counting a percentage of that to be turned into auctions. So far that hasn�t happened. I�ve been watching them go off-site. If this fails then Ebay has accomplished nothing and they have lost and alienated many good sellers. Those that don�t leave now will jump ship as soon as something like a Google venue takes off. Don�t discount other up and comers. Wagglepop has shown phenomenal growth in just a month�s time. Their Alexa traffic rankings have come a long ways too in a very short time.
On top of all this Ebay is losing buyers too. The Wall Street Journal came out and reported this. I believe it�s highly possible auction formats have has their run on the internet. Buyers prefer the more convenient instant purchase formats. The instant purchase store formats are not easily found on Ebay so the buyers go elsewhere. I think it�s crazy to hide 80% of your inventory from the buying public. If I am correct about the auction formats becoming obsolete or less attractive then Ebay�s huge gamble will end up failing in the long run. (continued in next post)
E-bay's fee charge is ridiculously high given how little the cost is per sale for them. Recently I sold a few speakers, surprised to see I was charged a whopping 8% for a $80+$15shipping sale. I actually minimized my bidding process, nothing fancy on the sale page. Well, ebay is coming to an end as more buyers/sellers flee.
Just wondering, were you happy with Ebay before the fee hike?
Looks to me that the decision to focus on the core was made because it was too easy for sellers to list items in stores (178% yr/yr growth). Even though this focus was profitable for sellers (or they would not do it), ebay concluded that it was bad for buyers because of reduced conversion rates and not differentiating ebay from other sites.
Ebay thought the best way to focus on core is to make it too expensive to list in stores. Core BIN listings have to be value priced because they are too expensive for sellers to relist every week.
Will this work? imo- it has to work as long as core listings don't drop off the clifff.....if core listings drops significantly, ebay will drop fees for core listings. Ebay feels there is no point in dropping fees for core unless there is a scarcity of listings.
This is not a good way to treat the store sellers but if the end result is a more vibrant marketplace, ie. GMV growth for Ebay, then most of the 200 million members in the Ebay community have to be happy EVEN though thousands of store sellers will not be happy.
Ebay should apologize to the store sellers for leading them down the wrong path but there really is no easy way to fix the problem.
As for lost jobs, hopefully Ebay can help some of these store sellers adapt. Ebay still stands for empowering individuals to conduct commerce, more so than any other company. I think if Ebay was not around, the sad stories of people losing jobs would be much worse.
Don't forget the press, analysts who still can barely walk from their 1999 predictions, Cramer, and Mel Gibson.
I have also heard rumors that both the Dhali Lama and the Pope have called Ebay "A Bunch of &$^%$ers."
I�m not sure what percentage of my sales will come from Ebay. It will only be an advertising expense so it won�t be much. I don�t have a huge inventory on Ebay but I had plans for a much larger inventory. It has been a lot of work to get to point I have gotten too. That work will now continue on my website.
I just see the whole store fee hike fiasco as a BS decision. I understand they want the core to grow but I do believe that core is old and out-dated. Auction counts have been declining since the first of the year. Auctions will still have their place but people want their items here and now. Many don�t want to wait for a format such as auctions. To destroy the stores through huge fee hikes (and all the hard work put into them) in order to grow the core is BS. Instead of offering incentives to grow auctions they want to force store sellers back to the auctions. As you know, people don�t like to be forced into anything. We can take our business elsewhere. I believe Ebay blundered trying to force more core auctions the way they did. Ebay�s management could have dealt with the store sellers much better.
Part of what has me riled up is the some of the stories that were coming from the Ebay message boards. The story of a mom who was staying home with her son with cancer. The many son�s & daughters who were staying home to care for sick or elderly parents. The elderly & handicapped that relied on Ebay for some extra income. Single parents who relied on Ebay to help bring extra money for needs for their kids. Ebay stores made it possible for these people to be self-reliant and stay at home to care for loved ones or for other needs. The huge fee hike hit them hard. Many of them were talking of having no choice but to close their stores. These are the negative repercussions that are coming from this decision. I am a business man but I�m not heartless. This could have been handled so much better. Do you believe in karma?