posted on May 27, 2002 12:49:27 AM new
OK, here it is straight from the horses mouth (so to speak). I found this link on another message board but it is very disturbing to see they really don't want to bothered by us "small" or rather "marginal" sellers anymore.
This may have already been listed here but I thought I would post it just in case.
http://www.bayarea.com/mld/mercurynews/3292564.htm
posted on May 27, 2002 07:25:28 AM new
Well, it does say that the last fee increase was intended to get rid of the marginal sellers. Are the marginals gone now? I don't know.
I can see their point. Who's really making any money selling used paperbacks or VHS movies for $1 each? Each auction does have a fixed cost to eBay. That cost may be infinitesmal for a single auction, but still it costs something. A Coach handbag auction that ends at $100 is a better and more profitable use of eBay's resources than a used Barney video that ends at 99 cents.
fluff
461 auctions currently running under 3 eBay seller ids
posted on May 27, 2002 07:53:00 AM new
Reduce the clutter?!! Meg needs to remember that the clutter is what got her to where she is in the first place. The big boxes were not breaking down her door when eBay first started. It was the "clutter" that made eBay what it is today. eBay management needs to be reminded that if the "clutter" goes away the site will become just another on-line store, not a great deal different than any other.
Having spent 20+ years in the wholesale hardware/lawn & garden supply industry I have seen first hand what occurs when the big boxes are catered to at the expense of the everyday small business. In the end it is usually the one who does the catering that takes the fall when things go wrong in the economy as they invariably do. Many wholesalers have gone belly up when their preferred big boxes have had financial problems. They were so concerned about the biggies that their base went away and they had nothing to fall back on.
This is a lesson many wholesale suppliers have learned and with disasterous results. Although eBay is not a supplier the same principal applies.
One day in the future Meg and her managers will be looking for the "clutter" to bolster their bottom line and they will find that the smaller sellers have gone away. But at least they won't have to worry about buying brooms to clean up the "clutter"!!!!
posted on May 27, 2002 07:54:29 AM new
Yes, there certainly is a cost associated with each auction item. But if you are willing to run a bare-bones auction site with no extra services or support, you could attract these marginal sellers (whether you attract the buyers is another story). Clearly, Ebay has decided that for long term growth, this is not the market they want to be in.
At some point Ebay will be forced to reckon with issues of buyer confidence in sellers. They will be able to manage this with larger, established businesses, and with higher end products. I just bought a new computer on-line from Dell; I didn't even consider looking for one from an unknown (to me) business on Ebay.
Maybe Ebay will someday have their cake and eat it too by establishing semi-autonomous businesses - their flagship marketplace, plus a separate cyber fleamarket - for "take your chances" and low end stuff.
posted on May 27, 2002 08:00:49 AM new
once upon a time ebay developed the mass loading feature so we can list more junks.
it was no big deal for some sellers to list the same items over and over again until they ran out of buyers .
posted on May 27, 2002 08:09:52 AM new
Some highlights:
"And eBay collects again if there is a sale, which happens well over half of the time."
I wonder where they obtained that statistic.
"This year, it's on pace to do $12 billion, and to reach 2005 goals, it will need to reach between $30 and $40 billion in merchandise sales."
That means, based upon today's auction counts, they will have an average of 15-16 million auctions running at any given time. Where did these people go to business school? Don't they understand how supply and demand works?
"Growth in core U.S. listings has begun to slow. A number of new categories, such as travel, entertainment ticketing and real estate, have plenty of competitors."
True, and yet they expect to double the amount of listings on eBay?
"EBay Chief Financial Officer Rajiv Dutta said the price increase was intended partly to ``reduce clutter'' from what he termed ``marginal sellers.''"
Translation: "You don't make us enough money, so go away." What a way to treat your income source.
posted on May 27, 2002 08:25:56 AM newMeg needs to remember that the clutter is what got her to where she is in the first place.
Actually stock options worth over $1 billion got her where she is in the first place.
I think there's more than a bit of Meg-ego involved here, like there is with any CEO but especially, it seems these days, with female CEOs. Here we have Carly Fiorina well on the road to destroying a well-loved and legendary company just so she can, for a time, run a high tech megaempire. And now we have Meg losing touch with the roots of the company so that she can run the world's biggest online megastore.
We the little people are a costly PITA to eBay. Everyone realizes that, right? We require way too much support; support costs money; labor costs subtract from that bottom line. The move to eliminate SafeHarbor email support is just part of "cleaning up the clutter".
What's ironic is that for many of us, eBay's own rules are the reason why we need support. Want to get unfair negative feedback removed? Be prepared to go 12 rounds with a raft of support people. Is someone interfering with your auctions? Did you get an email threatening negative feedback? Didn't get what you paid for? Soon you won't even be able to email a real person.
I always thought the problem with eBay's original business model was that it assumed nearly all transactions would be trouble-free. That's a pretty broad assumption, given that there are humans on both ends of each transaction and we know how flaky THEY can be. eBay's tried to make money off transactional problems (see SquareTrade) but that's not really working, so my guess is that when they discovered that, say, 10% of the sellers are causing 70% of the problems, the obvious answer was get rid of that 10%.
posted on May 27, 2002 08:26:44 AM new
I can understand eBay when it comes to the auctions that list for a penny and sell for the penny. What fees are those sellers paying? I think that they are only taking up space. I am not a big dollar seller but I do sell and pay my fees. I have been into auctions where, I doubt, that sellers pay any fees and then charge high postage to make up for their loss.
Yesterday on the CNN news report, they talked about how eBay got started and it was a pez collection that Pierre's girlfriend wanted to sell. This month the Pez holder was introduced to the USA 50 years ago. I have one of those original pez's
I need to ask a question. Does eBay pay for the space that they use for their auction site and if so who do they pay it to.
posted on May 27, 2002 08:31:17 AM newWhat a way to treat your income source.
But not all income streams are created equal. We the little people don't really know (since we don't have access to eBay's internal data) how profitable we are for eBay compared to the corporate monoliths like IBM.
To use a more specific example, I don't want *just anyone* bidding on my auctions. (I'm bracing myself for the screams of horror.) Some bidders are situated such that I will not only not make any money on the transaction, I will lose it. While it seems to the beginner that any bid is a good thing, it's just not the case.
posted on May 27, 2002 09:43:48 AM new
ebay owns its own cyberspace,it is a big operation with programmers,operators,servers,routers,security system not just in cyberspace but physical security for the buiildings where these hardware and software are housed.
this is the biggest piece of expense for ebay.bandwidth does not come cheap and pictures take more bandwidth to host.ever notice why some sites have smaller pictures??
if you list an item for a penny,at least ebay is getting 30 cents for 7 days,on amzn,it does not get paid until book is sold and there are many books listed for a penny.
posted on May 27, 2002 11:42:53 AM newWe the little people don't really know (since we don't have access to eBay's internal data) how profitable we are for eBay compared to the corporate monoliths like IBM.
But you are missing the big picture. Businesses like eBay and IBM NEED us on eBay to draw in the buyers. If eBay consisted of nothing more than IBM computer parts, the buyers would dry up faster than a summer rainstorm in Arizona.
posted on May 27, 2002 11:46:23 AM new"And eBay collects again if there is a sale, which happens well over half of the time."
I wonder where they obtained that statistic.
Neilsen Media Research (best known for doing the tv ratings) is the source of their statistics. Last year Neilsen reported ebay's total percentage of completed auctions was 55%.
posted on May 27, 2002 12:15:35 PM new
"And eBay collects again if there is a sale, which happens well over half of the time."
Just a theory lets say I list an item for $9.95 and a deadbeat wins. I paid ebay .30 for the listing and was charged for the FVF which has been credited to my account. So the relisted item costs another .30 to list and the second bidder pays and another .50 is paid in FVF. eBay does not refund the insertion fee on deadbeat auctions. eBay rips off sellers all the time on insertion fees they dont credit.
posted on May 27, 2002 04:10:12 PM new
The reason I shop on ebay is to get away from the giant corporations.
Good thing is, this is how competition gets it foot in the door, so we are bound to have a good alternative eventually.
posted on May 27, 2002 05:25:59 PM newGood thing is, this is how competition gets it foot in the door, so we are bound to have a good alternative eventually.
Unfortunately, the only way anyone could be a good alternative to eBay is if all the buyers and sellers left eBay at the same time. If the sellers leave (which is what Meg apparently wants), they will find that the buyers are not on this new "alternative", and leave. If the buyers go looking for this new "alternative", and don't find the vast array of merchandise offered on eBay, they will not stick around waiting for it to show up.
Plain and simple: eBay had a wonderful idea, and they were the first to have it. They grew the idea into an empire. Now they are attempting to destroy the empire by evicting the very people who helped to create it.
I am sorry I am just a little 2 person operation, eBay, and not a multi-million dollar giant like IBM. I guess I'm not good enough for you (or perhaps it is the other way around )
EDITED TO ADD: I wonder how their major stockholders feel about this.....I know I would be upset.
posted on May 27, 2002 06:30:50 PM new
"Unfortunately, the only way anyone could be a good alternative to eBay is if all the buyers and sellers left eBay at the same time."
There's always room for two major competitors at the top. It will take another site to really market itself correctly to contend (its not happening now to any big degree) and it's a lot easier than made to believe. Once the marketing is in place, people will check it out. There's already early adapters selling on these sites, every time ebay upsets some sellers, more will try the other sites. If the other site that wants to contend already has its marketing in place the site will grow rapidly. There is an element of timing involved.
I check other sites for what I want, but right now that means they do not so I buy on ebay. If one seller put up ten things I was interested in, and I bought some, other sellers will notice. So, it won't take much to get things going.
posted on May 27, 2002 07:17:15 PM new
I think the article was right on the money. There is too much penny ante crap on eBay and every other seller is subsidising these rinky dink sellers. Look at all the $1 paperbacks that still abound on eBay. These sellers are doing a volume business to make their profits. Let them move that low end crap to the Bidville-type auction sites.
eBay should make all minimum start bids at $5 or more. To blow off that low end junk would greatly raise their bottom line as they may lose money hosting those auctions.
Just my opinion but I applaud the article.
posted on May 27, 2002 08:46:30 PM new
eBay isn't in the clear yet just by dumping on the small and marginal seller.
eBay has a branding problem that causes most large companies to shy away from the venue.
A company might go into eBay with a brand, but the brand coming out from their sold item will be eBay.
Even when a buyer purchases an item from IBM or Disney on the site, they don't tell people they bought it from Disney or IBM, they tell everyone they bought it from/on eBay.
This is a nightmare for any company that has developed a brand name.
eBay dumping sellers that sell low priced items is a smart business move for the short run. The unit costs for eBay for a $100 item are the same as for a $5 item, but the revenues for the $100 item are obviously higher. The servicing costs are far lower for eBay when dealing with large companies versus small sellers.
The question remains what effect this will have on buyers who browse the site for low priced items.
One thing you can be sure of- eBay will act in their own best interest, and that interest is making more money.
All sellers should be developing their own sales channels, including advertising your own sites and products in your EOA emails.
posted on May 27, 2002 10:36:49 PM new
There was a newspaper article about 3 years ago that said that it cost eBay about 45 cents for every auction. If an item sells for only $1 that is only 35 cents in fees paid to eBay and they lost a dime. If these $1 sellers relist an item after it fails to sell and sell it withing 30 days it cost eBay 90 cents for 35 cents in fees.
What's wrong with a $5 minimum bid? If it isn't worth $5 the sellers should put it on a free listing online auction site with the 10 cent sportscards. It would add a lot of class to eBay to get rid of these very low end items.
posted on May 28, 2002 12:19:01 AM new
[b]eBay should make all minimum start bids at $5 or more. To blow off that low end junk would greatly raise their bottom line as they may lose money hosting those auctions.
[/b]
Correct me if I'm wrong. If I list a paperback for 1.00, or the same paperback for 5.00, then isn't the listing fee the same? Thirty cents. Ebay would only make money if the item sells. In this case a 5.00 listing fee would then only be profitable if the item sells! Also, many of the items that are now listed at 1.00 or so would never close at 5.00.
I don't think buyers will remain at ebay if the core of the business is removed. As another poster said, who wants to shop at another cybermall? Ebay is very unique in the fact they have all the different merchandise. Everything from 1.00 paperbacks to IBM computers.
I agree too, that someday ebay will sooner or later, be forced to contend with another online auction "venue". I will probally be a competition simliar to Coke and Pepsi. At least we should all hope so.
posted on May 28, 2002 12:55:08 AM newWell, it does say that the last fee increase was intended to get rid of the marginal sellers.
It doesn't really say that. A nickle increase per auction? eBay could double the fees and hardly make a dent in the number of listings. You have to read the article correctly. The article said "in part" and there was no direct quote.
eBay has gone further with fixed-price auctions and big names than I expected, but there's still a LONG way to go. I don't know about IBM's sales, but the sale described, a nearly new dirt bike for half price, probably doesn't sound good to motorcycle dealers.
eBay needs small sellers (aka, junk dealers) to bring in the customers. If eBay were to raise fees suddenly (say, to a buck per listing), a whole bunch of sellers would be looking for a new venue. Suddenly eBay might not be the only game in town. There's an uncertainty factor there. I'll wager eBay is willing to take a loss just to keep the huge majority of sellers under their hammer.
There is some advantage to thinning out the listings. There are some "crap" auctions that offer very little value. I do believe that buyers complain about that type of auction. Without respect to opening bid, many auctions are just plain crap and the cumulative effect is that they discouage bidders from visiting eBay.
posted on May 28, 2002 04:29:33 AM neweBay needs small sellers (aka, junk dealers)
I take offense to that. I am a small seller, and I don't sell junk.
Most of the $0.01 auctions are listed by sellers who are listing hundreds of such auctions, most of them dutch. How is this person, who is TRULY the "junk dealer", a small seller?
posted on May 28, 2002 05:54:48 AM new
Ebay is addressing its business issues. Many items being "auctioned" are already essentially fixed price (note reserve or retail-set opening auctions selling on one bid). After a while, many people may just want to know the price and make their buying decision.
Another issue will be the "only a venue" stance. In order to protect the ebay brand, they will probably be forced into more buyer support and confidence programs. It will not be feasible for the them to ride herd on the kitchen table dealers.
I don't think they risk much by losing marginal sellers (or buyers, for that matter). No business can be everything to everyone, and ebay is simply making a choice as to where they think their future lies.
posted on May 28, 2002 07:46:48 AM new
I don't know if this is possible or not but maybe eBay should spinoff the retail sellers into a different venue. Since I haven't been into any of those sites I don't know if the prices are fixed or auctioned. I did enter IBM into the search and found some great auctions that started at 1 cent and are now up to $400.00 or more dollars.
I find if I put on my jewelry and try to start an auction most of the time it doesn't get bids until the very last so I have started to by pass the auction and put it on BIN. Maybe some of you are still getting the auction part but I don't seem to. I am a small seller, but most of mine sell. If it doesn't sometimes I relist and most of the time I don't, depends on the item. If it costs them to much to run an auction, maybe they should limit our images and have the intended buyer email for more. I would be for that. If they get rid of the marginal seller than the concept of eBay is gone as that is the way they started. Meg has dollar signs in her eyes and the marginal sellers don't give that to her. Great discussion lindajean, thanks for starting it.
posted on May 28, 2002 09:13:04 AM newCorrect me if I'm wrong. If I list a paperback for 1.00, or the same paperback for 5.00, then isn't the listing fee the same? Thirty cents. Ebay would only make money if the item sells. In this case a 5.00 listing fee would then only be profitable if the item sells! Also, many of the items that are now listed at 1.00 or so would never close at 5.00
--------------------
If the item sells at the $5 start price then ebay nets at least a dime profit ( .30 list fee + .25 or .26 FVF ). At least they have a chance at a profit that way.
I agree with TwinSoft in that if eBay doubled their fees it still even wouldn't put a dent in the number of listings. I think that eBay never thought that such a high precentage of low end items would persist on their site and drag down their bottom line. They have to remedy that situation. To keep the other sellers that eBay covets so fondly they could leave the listing/fee structure as it is with the exception of the "up to 9.99" listing fee and raise that fee from 30 cents to 50 cents with no free relist option. It would be almost impossible to lose money on those types of auctions with that fee structure and raise the bottom line and make at least some of those sellers find a different venue to peddle those low end items.
(or perhaps it is the other way around 
)