eBay partners with Buy.com, gives large sellers the finger
Hi gang,
It's being widely reported this weekend that eBay has entered into a partnership with Buy.com to allow Buy.com to sell lots and lots of product on eBay.com. As of this moment, Buy.com has over 140,000 3-day listings active on the site. In April Buy.com did roughly $700,000 in sales on eBay.
None of that matters to me.
What matters to me is that eBay, for the first time, has cut a deal on listing/final value fees for a seller. That's right gang - eBay is finally behaving like every other company on Earth. Companies that sell more product pay less for fees - what a concept!
Of course, the other side of this coin is that eBay just flipped the bird to its own large seller base. In my opinion, what eBay just said to us is this: "Hey large seller, thanks for the $2 million in fees you've paid us over the last 5 years - you really kept the fuel in Meg's private jet! As a thanks, we're going to cut deals with companies who have never even sold on eBay and allow them to compete directly against you at a significant cost advantage because, well, you simply can't meet our impossibly high standards! We're not asking you to leave of course, but here's your hat"
What eBay has never got - and this company is filled with very smart people - is that we can't provide Tiffany's level of customer service, sell at below wholesale, and pay 20% gross sales to eBay. That's a perfect storm of impossibility, my friends.
Good for Buy.com, and good for the other companies that will be selling soon I'm sure, but eBay, please realize that if you cut me a deal, I could also list 150,000 3-day auctions on your site AND afford the CS to make it flawless.
Make me prove it to you.
Kevin
www.Inflatablemadnessoutlet.com
Go read the post that broke the story. Way to go Randy!:
May 8th, 2008 at 6:47 am
[…] friend of my very hard. Kevin Harmon is noted as one of the top 20 sellers on eBay. His recent blog post details the frustration at eBay have allowed Buy.com to come in a list a LOT of competitive […]
May 9th, 2008 at 10:18 pm
Kevin,
I've thought about it a lot and I don't think ebay will be cutting similar private deals with ANY of its large seller base.
Longtime large sellers in Pesa or the IMA are not the kind of companies ebay want to "partner" with. They only want much bigger companies who can stand alone, apart from ebay, and only in a larger way than say, even the biggest ebay volume seller, eforcity.
They only want proven players who have substantial muscle outside of ebay. They want big stand alone retailers, not third party sellers, because we are all chump change to them. We've already proved year after year, that we are reliant on both them and Amazon because we continue to pay the rate card fees. We complain a lot but we keep right on paying because we are reliant on them.
They aren't going to cut a deal with a company whose primary revenue stream comes from BEING an ebay seller. I mean, where would say, Movie Mars, be without all their ebay sales. My hunch is that it's at least 65% of their revenue. How much would they have to scale back if they were just left with Amazon? Ebay is quite aware of all this…
"Third party sellers" still means "the little guy" to ebay (even if we gross millions, ebay knows our margins are crap) and I'm afraid its going to stay that way…
May 10th, 2008 at 12:49 am
Mark,
Yep, I agree. Current eBay sellers will never receive any negotiated deals from eBay. eBay simply has no reason to.
I think the course of action for a large seller now is to get to a point where they would not go out of business if eBay didn't work out and they had to completely kill eBay sales.
You bring up MovieMarz, and they are a great example of this. eBay is actually probably 15% or so of their overall business now - if all this would have happened 2 years ago they would have been in trouble, but now they would survive without eBay. We are on a similar path - it's been very eye opening to look away from eBay to see what else is out there.
Thanks for writing!
-Kevin