Comments on: The only thing saving eBay is no competition

eBay has decided to restructure and downsize. Don Reisinger believes eBay is in serious trouble and must do something quickly if it wants to survive.

[pearmaster]

Yeah, I recently wrote about eBay and the lack of alternatives: http://jacob.peargrove.com/columns/2008/03/05/alternatives-to-ebay/

There used to be other auction sides like Yahoo! Auctions, but sadly those have all died to eBay.

[drvine]

Its not a auction site - but Etsy.com has come along way and is giving ebay some competition when it comes to handcrafted item.

http://dvinedesigns.etsy.com

[PortVista-19095313035016904102]

Your arguments are largely based on the assumption that eBay is an "auction" site. Well, eBay's innovation is having buyers rate sellers creating a trust relationship, and that's what makes transactions possible. Who cares if it's an auction or a sale? eBay was one of the first social networking sites and you're arguing it's not "Web 2.0" because it doesn't have AJAX. Get real, it needs to be a simple interface that does not change or they will lose millions of customers who had to buy a book and go to seminars just to figure it out. Personally I like Amazon over eBay, one of MANY competitors.

[Maarek Stele]

The only competition is Craig's list's free stuff (or people selling stuff). You can search for local stuff and buy them off market or through paypal.

[AUCTIONGLIDER]

eBay owns 25% of Craigslist.

[jc364]

Another thought is that competition between auction sites isn't the best thing for consumers. If another auction site were to start, then the potential viewers and bidders of any particular item would drop. Ebay thrives on this fact, because it has already established itself as the most well-known and trusted auction site.

It is kind of a snowball effect; sellers come to sell on ebay because most people buy from ebay, and with more sellers comes competition and price drops, which brings more potential buyers. A competitor would have a very difficult time stopping that cycle.

[iceblue03]

Hmm, you sound more like a disgruntled Ebay ex-employee and you don't seem very subjective. This article just doesn't sound right. I'm starting to think CNET news is the equivalent of celebrity gossip tabloids, but for technology. Ebay does have a little bit of competition you silly boy, Yahoo auctions. No one has managed to be very competitive with Ebay, that is all.

[AUCTIONGLIDER]

You should go online more often. Yahoo auction is closed and has been for some time.

[dlemay69]

Yahoo auctions have been defunct now for at least 9 months, so there still is no competition. The closest competitor is less than 10% of eBay's size.

[eMoviePoster]

My name is Bruce Hershenson and I am the owner of emovieposter.com. I joined eBay in 1998, and in 2000 I moved my entire mail-order business of vintage movie posters to eBay, and since that time I have sold 300,000 movie posters on eBay, for total sales of $16 million (3 million in 2007 alone). In all that time, I have auctioned all of my items with 99 cents start bid, and no reserve, the very kind of auctions that made eBay so successful when they first "took off".

The recent price changes affect my business greatly. They will result in the fees I pay going up 40% annually! If I were to achieve the 5% discount eBay is offering a very select few, my fees would go up by approximately 27%. If I were to achieve the 15% discount, my fees would go up by approximately 13%.

I feel that the price increases are extremely misguided. Normally, companies only raise rates when THEIR costs increase, or when they are delivering better results to their customers. In THIS case, eBay's costs have not risen and they are not only NOT delivering better results, but they are actually delivering lesser results (lower sellthrough rates and lower ASPs). Any company that did not perceive themselves as a monopoly would never raise their rates under these circumstances, but, if you feel your customers have nowhere else to go, then you CAN raise their rates, to make up for the lower profits you are having due to the lesser results you are realizing.

eBay has miscalculated in my case. I have to examine how much I pay eBay per year, and what I received in return for that money. I have concluded that I can do far better opening up my own auction on my own site. Unlike many other sellers, I had my own business for 10 years prior to starting on eBay, so I am now reversing the process I started in 2000! At that time, I moved my entire business ONTO eBay, and in 2008, I am moving my entire business OFF of eBay.

I really don't understand why eBay would drastically raise their rates on people like myself, who sell 100% of what they list, and have "fun" true auctions, where all the final prices are set by two or more actual bidders (the very kinds of auctions that made eBay so popular), and I have virtually perfect feedback (only 14 negatives in 300,000 transactions!).

What is equally difficult to understand is that eBay has slashed their rates to media sellers only, who sell very little of what they list, and who have generally mediocre feedback, and who often charge disproportionately high shipping, which eBay says is their number one concern! It also is odd that eBay chose these sellers to be the first recipients of their new "non-level playing field", for I can see no reason to single out these sellers as being especially important to eBay.

But it is not solely an issue of rates that is causing me to leave eBay. I believe their recent changes to feedback will have a disastrous effect on their company. I believe they made those changes because their research showed that buyers do not return to the site (either ever, or as often) because of dissatisfaction over high shipping, and because they get upset when a seller leaves negative feedback on them. So they made their recent changes (primarily trying to force sellers to lower shipping rates, and stop leaving "bad feedback") because they think that will improve sales.

I believe they are completely mistaken. In spite of what their research shows, I believe the number one reason buyers buy less often (or quit the site) is because they were cheated in some fashion. Similarly, I believe the number one reason sellers sell less (or quit selling altogether) is because they are tired of having buyers who never pay.

The solution to both these problems is to verify all other users on the site (both buyers and sellers). When a buyer or seller breaks the rules, eBay could then ban that PERSON, and not just that ID (which has no effect, because the person can get a new ID, under the current rules). If all users are verified, then a bad buyer or seller will be banned, and they can't easily get back on.

I believe eBay is aware of both these problems, but there are two things that prevent them from implementing my solution. One is that verifying all users would mean they would have to admit they would actually have something like 80 million users, instead of the 250 million users they claim (which counts all IDs as separate people, which everybody knows is complete fiction). The other thing is that eBay would have to have a REAL Trust and Safety department which would need to go after bad buyers and sellers, both with police and through the courts, and that would certainly be expensive, and would not bring eBay any additional income in the short term.

Under the current setup, eBay benefits greatly from the problems that beset the site. Many "bad sellers" are among the largest sellers, and pay eBay great amounts of fees. Many "bad buyers" cause items to have to be relisted a second time, and this generates a HUGE amount of revenue for eBay in listing fees they never refund (and surely many people never bother to get a refund of their final value fees, so that is an additional revenue source as well).

To sum up, eBay keeps raising the fees sellers pay, without delivering additional value of any kind, and in fact recent years have seen a deterioration of the value they have provided. They also continually micromanage their sellers, taking control of a greater and greater percentage of their businesses.

Sometime in the middle of April, I will hold my last eBay auction, and I will hold my first auction on my website http://www.emovieposter.com. I am currently in negotiations with other major sellers of collectibles and antiques, trying to help them leave eBay as well, and set up similar auctions on their own sites. I have hope that, at some time in the future, I can help set up an auction site SOLELY for collectibles and antiques, so that all of the smaller sellers on eBay will have a place to sell on that is run by actual sellers, and which truly only does provide a platform for them to sell from. I believe such a site would be very welcomed by almost all sellers of collectibles and antiques.

Bruce Hershenson
President, eMoviePoster.com

[uncommonglass]

Contact me at [e-mail] when you're ready to set up that collectables/antiques site! 8 yrs on ebay, small seller - thanks! mary

[ramvictory7]

Hi Bruce,
Please contact me at [e-mail] when you plan to help other seller set up their own auction sites. I am a small seller and I totally echo the concerns that have been raised here on ebay.
By the way, I saw your new website emovieposter.com and was very much impressed. would like to know more details about this. Please contact me at the above address. Thanks & Rgds...Ram

[Gail_C]

iceblue03 ~

Yahoo Auctions closed last June, you silly boy!

[movinginstereo]

Here's a little known fact about "the little auction that could" & some good news for all you people who have been looking to the horizon for the cavalry. Check out that upstart auction site called OnlineAuction.com. (OLA.com) I think you'll like what you see. They've got the right idea, and although they are certainly no eBay as far as household name status, they are also no eBay as far as treating their customers like dirt. This online selling veteran has found a new home & LOVES it!! Tell your friends: There IS an eBay alternative & they may not be as big (yet) or famous / infamous as the "Goliath" that they are taking on, but this "David" has the right ideas to go the distance & is growing nicely with new supporters everyday!

[5lilmonkeez]

Try ePier!!! They look to be becoming great competition for eBay and are growing every day!!!

[joriebelle2]

There are several alternatives to Ebay, including OLA (onlineauction.com) which is growing bigger and bigger every day. . . Ebay may finally be meeting its match.

Michele

[NorthrupP61]

There is competition: OnlineAuction.com
A low monthly fee for unlimited listings.
No listing or FVF.
Feedback is a two-way street.
You can link to your own site.
The first million Founding Members will have the same membership fees for life.
As long as bidding continues, your auction keeps going.
We're growing like wildfire and we're gearing up for a HUGE marketing campaign.
http://www.onlineauction.com/index.php

[AUCTIONGLIDER]

eBay has become a big dumb giant. It does not look good for them.

However there are those of us sellers that depend on the income we make on eBay and until there is a viable competitor we must stay.
For any sellers staying may I suggest checking out a site I found to help overcome the Feedback changes -

www.AFTERTHEGAVEL.com

They are providing a free service for all online sellers to be able to alert other sellers via Neutral & Negative feedback of bad buyers.

For me I must stay on eBay and this and anything else I can find to keep the changes from being as severe are my new best friends.

[ebaysucks]

Someone with enogh money will create just ONE site such as TOYS. I have already seen another site for just CARS and TRUCKS.

EBay will chopped at one site at a time, THE TIME IS RIGHT for eBay to be put in it's place.

There is no room for a monopoly that DOES NOT listen to it's sellers.

Donahoe is only good for punishing sellers and coming up with stupid ideas, WAY OVERPAID!

[job1970]

There is serious competition to feebay! It is called ONLINEAUCTION.COM (ola.com). With over 13 million items for sale, either in the auction format or the penny-over format...many of the sellers and buyers are refugees from feebay. OLA is user-friendly, customer-based and actually has real live people in the corporate venue to assist each and every one of its members if necessary. The atmosphere is more like feebay used to be--friendly, encouraging, and exciting. Whereas, feebay has turned its venue into a turmoil-filled site that encourages its members to flee to other auction sites just by the mere fact that they have created new rules, new regulations and such high fees that even the mega-sellers are leaving. And, Mr. Donahue and his clandestine cohorts even said they do not want the "flea-marketers". I could go on, but it just isn't necessary. More than likely, most people who are reading this have heard the recent horror stories at feebay and also know of the upcoming new boycott on May 1, when more will be leaving to pursue other venues. By that time, I am certain that OLA will continue to be a very strong competitor. Their advantage---? THEY LIKE THEIR CUSTOMERS---THEY LIKE THEIR BUYERS AND SELLERS---AND THE FULLY UNDERSTAND THE TRUE MEANING OF CUSTOMER SERVICE.

[greta_speaks]

thank you for writing such a great article. i do not agree that there is no competition. there are several i.e. ola, ioffer, esty, overstock to name a few. so, i guess there is no saving eBay!! although the other sites may not yet be what eBay used to be as far as volume is concerned, they will grow by leaps and bounds due to the eBay fallout. these sites can certainly teach eBay and thing or two (and more) about how to treat it members.

i look forward to what you will write come may.


best regards,
greta

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Boycott Victoriously ?..while making noise!
Evacuate by May 1, 2008!

[debipier]

There is certainly competition for ebay!!

Online Auction is theup and coming auction house which will be even better than ebay!! They are people who know what it's all about and understand what it's like to be both a seller and a buyer...

Time and patience is what it will take and with the persistence of the founding members, I believe that e-commerce will be amazed as this company grows and flourishes...

Ebay's leaders are just a bunch of text book yuppies looking to make a buck off of other's labors. I'm not at all impressed with them... In a couple of years they will be like an old pair of tennis shoes that one must part with and throw away... Just a memory...

[ebaysucks]

EBay ONLY wants to keep PowerSellers. PowerSellers get 15% discounts on fees, MORE PayPal protection (unlimited), MORE exposure in "Best Match", their own private discussion site, a toll free telephone number that ONLY PowerSellers can call when they have a problem, in other words, the works. SURE Donahoe will be more then happy to take money from small sellers BUT he will hide your items in "Best Match" and charge you HIGHER fees. Small sellers, it is time for you to take the HINT! DonahoeBay is here to stay!

[JCPayne]

Ebay + Yahoo! should merge.... GREAT team.... Yahoo has the traffic... Ebay has Paypal etc. that would add siginificant value to Yahoo's failed Yahoo auctions and Yahoo stores.....

[kingkyzr333]

Yes, this article does seem to be prejudice against eBay. Buy it now feature is great for those that want to um... how do you say....uh......."buy it now" and not wait an extra 4 days for the auction to end for case of $10 LightScribe dvds-rw's. Keep in mind that just because a company begins or gains success with one way of doing things does not mean that it is exempt from evolving or adapting to customers or users demands. eBay sells many common staples that are needed for offices or home and every merchant has a very good idea of what these products are worth. Why not, set a but it now price 2 or 3% higher for those that need it NOW and are willing to pay the extra change for the convenience. In fact, MOST merchants offer buy it now & auction listings for the exact same products. You criticize eBay for being bloated and outdated but then you criticize them for adding or developing newer features like buy it now or Skype chat for talking to merchants.

Now, I do agree that they WAY overpaid for Skype by about 2 billion, but I also think it was an investment risk with possible untapped potential. I wouldn't claim Skype as an airweight just yet.

To reiterate what PortVista left, about the design and layout. They are completely right, many folks did, need to buy eBay for dummies books and spend many hours learning to understand how to use eBay and many of them still don't use it because they still find it too confusing.... even younger generations. Besides, the design is good. It simple, it's effective, it's easy, what about it needs overhauling????? I think what you will begin to see more of, are higher resolution photos and HD videos displaying products. This is just bettering what is already there, that's progress, for a company the size of eBay that relies solely on their website for success; 95% of the time that works better than just redoing everything.

What about Paypal? How often do you see Paypal next to Visa, Mastercard & Discover as forms of payments accepted? Even if eBay takes a dump, Paypal is still wildly successful and can most likely survive on it's own, kinda how Google checkout does.

By the way, I have bought over 30 products directly from China through eBay. 10 years ago when I was 14, could I have done that? Some of you out there with kids around 15 or so. Ask them if they know how to buy something directly from China or anywhere else overseas.

I say this because, everyone knows China is a treasure chest full of endless and almost free manpower. America and other 1st world countries were and are able to exploit this by becoming a fat middleman; I buy for .02 over there, I sell for 5.00 over here and only have to do the easy stuff (sell, not even make the products). I enjoy operating margins of 60% they operate off of margins of 2%. That's fine, it's the way of the world, but, what happens when you cut out the middleman. Middleman has to get a REAL job with REAL labor and REAL work breaking Real sweats.

My point is eBay has the power to channel rich consumers, over here and elsewhere with very poor laborers with an endless array of products and junk that we think we need because we are so comfortable with our lives. But those laborers soon realize what those products sell for. NOW they still directly to us for 2.50 instead of 5.00 and they get paid 2.48 instead of .02 and they tell the middleman to get a real job. This is also they way of the world.

So to the writer of this article ******** about the lack of eBays globalization efforts. That cushy, article writing job with C-net may not be available once America needs to stop buying and start selling like the other 95% of the world. You may be fine with that, I am, I don't mind working hard. I do mind lazy ***** that get paid more than they should, because of temporary holes in the system. I think we all do.

for those of you trying to judge me through my article I will list a few facts about myself. I like to stereotype as well.
24/male/white, no kids. 6'1", 200 lbs.
Moderate Republican (supported Mitt Romney)
3 years, 2 different community colleges.
have extreme fascination with electronics
Atheist.
I am in the health/life insurance full time but also do many odd jobs on the side to make extra cash and as a hobby.
Was not adopted and and parents are not divorced.