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Adapting an eBay business - Q & A

Gary calls to ask Kevin how he adapts to the ever-changing business environment of eBay.

Rich Sloan: And first we’re going to go to Locust Grove, Arkansas to talk to Gary.  Welcome to the show, Gary. 

Gary:  Hi.  How you doing?  Hi, Kevin.  I have a two-part question for you. 

Kevin Harmon:  Okay.  

Gary:  I sell eyewear on eBay so I’m obviously aware of the conditions there.  The first part of my question is how do you adapt to an ever-changing marketplace?  And my second part of the question would be, how do --

Rich Sloan: Well, hold on.  First, quickly, on that one, Gary, and then later you can get to your second part of your question, but what do you mean by ever changing?  How is it changing? 

Gary:  Some people’s business models were recently affected by the fee hikes. 

Rich Sloan: The fee hikes?   

Gary:  And I see a lot of people dropping out, but I see a lot of people that are staying and they’re having to adapt. 

Rich Sloan: So, Kevin, this is something you talk about in your blog, the fee hikes. 

Kevin Harmon:  Yeah.  eBay recently made a large change to their fee structure in the eBay store model, and it’s large.  I mean, it hit some people right in the eyes, and actually we’re one of them.  For our business, the increase amounts to about a one hundred and fifty percent fee increase, and so when you’re hit with something like that, as Gary mentioned, you need to make some changes if you want to survive.  And so, you know, Gary, the answer to your question is, I would say just remain nimble. 

I mean, the thing about an eBay company is that, you know, again, eBay presents you with a model that hopefully you can fit your model into, but eBay will change their model, and they have in the past and they will in the future.  So you just have to make sure that you can continually recreate your business, especially in this environment. 

Jeff Sloan:  And I would say one of the things that, you know, I’m guessing intuitively you need to be conscious of is that the fee changes within the eBay environment affect everyone the same, but what could start to happen is the fee changes could hit you -- you know, as everyone has to adjust their price, probably, to pick up the difference and maintain a margin to make this business worthwhile, you have to be careful that people don’t start to look elsewhere outside the eBay environment. 

Rich Sloan: Great point. 

Jeff Sloan:  I know you said you wanted to buy a purse for your wife, Kevin, so you looked at eBay because you thought you could get it for less.  You got to be careful not to lose that quote/unquote, “eBay advantage.” 

Kevin Harmon:  That’s exactly right.  You know, obviously the large seller community is not too happy with the fee increases, and, you know, it’s a matter of adjusting your business model at this point. 

Rich Sloan: Right.  And you know that, Jeff, we were talking about that buy low, sell high, and Kevin corrected us for eBay with his buy lower and sell low, and it gets more and more difficult to do that when you have this inherent fee hike in there.  And Gary, you had a second part to your question.  Go ahead and shoot it. 

Gary:  Yes.  The second part of my question, and I’ve observed Kevin from afar for quite a while, Kevin, how do you keep such a great attitude through all of this? 

Kevin Harmon:  What choice do I have, Gary?  I mean, in other words, it just depends on how you want to react to things, you know?  I mean, the fee increases for our business, you know, it was severe, and we could either throw in the towel or we could look for opportunity in that.  I’m an entrepreneur so I’m an optimist. 

Jeff Sloan:  Right.  I think that’s right.  I think it’s in the nature of certain people.  I mean, obviously it’s your nature, Kevin, but, you know, I think going into entrepreneurship, the one thing everyone has to know is that without a doubt inherent in the entrepreneurship opportunity is also challenge and struggle and --

Rich Sloan: The unexpected. 

Jeff Sloan:  -- you know, disappointment, and the unexpected and all that, and I think really one of the hallmarks of a great entrepreneur is an entrepreneur who can get through those challenges with a head above water, and still feeling good and have a positive attitude.  I think that positive attitude actually helps you get through those challenges so keep that positive attitude.  It’s critically important.