Is It Time For eBay To Break Up With…Itself?
Hi gang,
So, I’ve been thinking about this idea for a while now.
Let’s say that you are eBay, and you recently realized that your core business idea, auctions, has a fad component to it. By that, I mean that auctions were a very cool idea 10 years ago, but the novelty of them is now wearing off. New users are slowing, current users are dropping off, and sellers are going multichannel and pulling product off the site.
Today’s buyer, more and more, just wants a really great deal on something, right now. That is one reason why Amazon’s business is just on fire right now, and eBay’s is headed the opposite direction.
eBay has to react to this trend, and they are reacting to it in spectacular fashion - several years ago, they introduced Stores, where sellers can park their fixed price listings. They now have Fixed Price listings and Buy It Now listings so buyers can just buy something without bidding. Everything they are doing right now leads me to believe they want to become a fixed price site.
Here’s the problem though. eBay has developed a split personality. What they are trying to do is try to satisfy both the auction-happy folks AND the Buy It Now folks at the same time. The site is full of fixed price listings, auctions, Store listings, banner ads, and classified ads, more or less all jumbled together. They had to create a better finding system, Best Match and Finding 2.0, just to try to keep the buyers from being so overwhelmed with the site that they wouldn’t come back.
I personally think that, sooner or later, trying to satisfy both kinds of buying experiences at the same time will put eBay in a virtual mental institution.
Shouldn’t eBay simply develop 2 sites? One for the good-old pure auction model, and another for fixed priced items? Many people thought that eBay Express was that step towards fixed price, but us smart large sellers knew all along that eBay needed to test out its new finding software, magellan, off of the main site, and thus created eBay Express to accomplish that. Now that Finding 2.0 is on the main site, how many times have you heard eBay mention Express? Zippo.
Call them ebayclassic.com and ebaynow.com, or something like that - let the auction folks not be bothered with fixed price. Let them have their fun. After all, it used to be fun to bid on auctions, remember? Let all the people who just want the item right now actually find the item they want right now. Integrate a payment method directly into the main site. Make it easier to buy an item on eBay. Don’t charge listing fees at all - take the money on the back end and become a partner of us sellers.
Ebay could run each company in the exact way that each sites’ business model would call for, instead of spending lots and lots of time trying to figure out how to mash it all together into a single site. The auction site could focus on maintaining dominance of the auction market, and the fixed price site could start the long road back to catching up to fixed priced e-commerce.
What do you think?
Kevin
http://inflatablemadnessdvd.com
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August 14th, 2008 at 12:20 am
Your suggestion for a split assumes that buyers will only purchase auctions or only purchase fixed price but never both. But I don’t know that auction and fixed price buyers are mutually exclusive.
We sometimes use auctions as the “hook” and the high bidder of an auction then often times adds several additional (fixed price) items to their purchase in order to save on shipping. Our shipping / combined shipping pricing strategy encourages buyers to purchase several items because we generally charge a hefty shipping charge for the first item and then a greatly reduced shipping price for each additional item but additional items must be purchased within just a few days time. That way, we prevent someone from taking several days to purchase only auction items. We have had some great success with customers who purchase one or two items on auction and then add several Buy Now items at full price.
August 29th, 2008 at 6:55 pm
I believe creating an “eBay classic” would be a classic mistake. Auctions are not dead, but they are a shrinking niche market. eBay could simply create a window for auctions where a user could filter out any buy nows so they could take a close look at auctions only. The current site makes it difficult to filter out the Buy Nows and just look at all the auctions. It’s a bit buried in the advanced settings.
Instead of trying to copy Amazon, eBay needs to celebrate what they do well: auctions — and begin to innovate for the future. eBay needs to celebrate how they have helped entrepreneurs succeed in the past and they need to help budding entrepreneurs so that there is an eBay future. They need to treat sellers with the respect they deserve and apologize for the past few months of chaos. And finally, eBay needs to do away with “Best match” because it’s in nobody’s best interest. Buyers are leaving confused and sellers are leaving eBay angry and Amazon is profiting from the madness.
Ideas for eBay’s innovation:
* Offer stock to loyal PowerSellers (to give them a stake in eBay’s future).
* Provide affiliate income opportunities through use of widgets that bloggers can install on their sites. For example a MyeBayStore where innovators can recommend niche products through pre-selected search indexes.
* Allow sellers to create blogstores — a blog with a template featuring their own products and even competitors products with the opportunity for affiliate income.
Okay, I’ve given some ways that eBay could engage sellers to come back to eBay. I’m sure others out there can add some ideas.
Incidentally, the PayPal fad is over, too. Buyers are more confident in purchasing online today than ever before. It wouldn’t surprise me a bit to see PayPal following in the same pattern of demise that eBay has suffered. They need to align with Wells Fargo or a strong and forward thinking financial institution.
Regards,
M.C. Nygard
http://www.cashbackatebay.com/
P.S. I make money when other people shop eBay and you can too. I’m crossing my fingers that eBay will take some directives that encourage entrepreneuers to sell again. Because without sellers there is no eBay.