eBay's message to sellers: Grow or die!

For the time being, it may be an eBay world. That is soon coming into change. The fallout from eBay's move to dismiss what it considers marginal sellers is far more wide spread than they would have investor's know.
I have witnessed the departure of the third largest eBay store seller there was. Ebay is propping up sales listings volume through discount listing offers and the numbers are further skewed by the listing of thousands of items which are being "dumped" as viable sellers exit the site.
I myself plan to stay... for a time, but let not the investment world be fooled.

Ebay as you have known it is finished and a competitor is rabidly (pun intended) stepping up to the plate.

One core problem with eBay and its relationship to those who buy on eBay is that it is minimaly concerned with the likelihood of fradulent transactions. If a fraud is brought to the public's attention by, say, relisting a fradulent good or service in order to bring the item to the attention of others as a warning, eBay will almost certainly ban the injured party from using its services while doing nothing to the original perpertrator of the fraud. All of this, of course, derives from eBay's desire to play down the incidence of fraud on its website and the dangers therein.

Hi Sheldon, totally understand your blog and opinion. Ebay's move is designed to raise stock prices, whether it works in the long run will be decided by the usual market factors, PE, rumours, and gossip.
And you are right about quasi legal, as the move is mostly to manipulate stock prices, which is legal until someone is caught.
As for the sellers, grow or die....1) Not everyone wishes to be Wal-Mart and 2) Everytime I grow, it costs me more in overhead at Ebay than I receive in promotional, profits (this raising of prices to certain sellers also comes with a loss of exposure), making it doubly delicious.
Not to carp, I can always leave, and most likely will, not to go elsewhere on the internet, but just out of the on-line world.
Appreciated your comments from the "other side" not just us snivelling sellers who actually build ebay. Time tells, the markets react and life moves on...thanks for your time.

Ebay has forgotten who got it to where it is now. When it started it was an online flea market and now they want to be a big box store. I closed shop and left my ebay business behind almost a year ago now with no regrets, but I would start again in a heartbeat if there were a viable alternative. Some people are completely content with a modest income and a "mom and pop" store, those sellers usually end up being the more honest and customer friendly ones to deal with as well. I would be willing to bet that if a viable alternative such as an imroved googlebase came along the mass exodus from ebay would make AOL's reapidly dwindling user base look like a slow decline.

Just like to add, that 33% net profit is huge! by any means! And if your friend is able to achieve that then she is one of very few! Volume has long been the answer to shrinking net profit %'s and the point that is once again being overlooked here is not that ebay has just increased it fee's, but what they did for the last 2 years to target ebay buyers and seller's in a eager beaver marketing campaign to open a store, and now huge fee increases in the midst of stock buy back?
This is just wrong unethical!
Thank you for the opportunity to submit my humble views. Sam

I have been an Ebay Seller for 10 years. Will be Looking for other Venues Soon. Ebay has not taken into account the casual seller (who made them) and is trying to be too many things to too many people. Along with Paypal they are now Choking the life out of my business. It is now easier for me to sell at regular Markets or Auctions. EBAY should break themselves down into some sort of Tiered system or an Online Market (not every store pays the same amount for their areas). Been watching YAHOO & also Found that RUBY LANE is Great for Antiques & Collectible Sellers from what I hear. I will be testing the waters and will RUN as fast as I can to them. EBAY Will Loose Well over $5,000-7,000 a year from me. Like Other Sellers, About a Year I ago I cut my business considerably due to Hikes. I am certain this is why their STOCK keeps tanking. They will have to do something or risk loosing their CORE.

To grow or die is right. "eBay does not care" is also a valid statement. Everyone knows it, including eBay. And why would eBay give a carp about it, they just laugh in the face of their sellers, raise their fees and make the consumer pay more for an item overall. (due to sellers needing to raise prices due to eBay fees, fraud and non paying bidders). All the while they continue to collect more and more and more and more to infinity - so they think!

Look, you can only go so far as to give less and take more and eBay pushes it to the max and I mean the outer limits! They are truly masters of greed. Have a history of it and are really pushing it like never before. Bottom line, they need revenue either for greed purposes or for lack of cash............ Enron?

In your article again we have the grow or die. Well, your friend who says all other sites are worthless has a pretty strong stance on the issue.

But what about the small time guys? They are sellers too and people really like to purchase from friendly small time sellers as well. If they are forced out of eBay, they can always go somewhere else and many are. These are the strongest alternatives in my mind to date: http://www.ebayauctionmasters.com/eBay_alternatives.html

To those frustrated, keep your head up and make sure to dump stock if you have it. If you do not have stock right now, you may want to wait until it drops way low (looks like it may happen) and see if another CEO comes in and changes things for the better, than lookout!

EBay is trying to force store owners to start using the auctions more. However, as a legitimate retailer with an brick & mortar store, there is no way I can do that. The auctions are flooded with cheap used items that young moms trade with each other, pick up for next to nothing at garage sales & closeouts, & are willing to sell for 1 cents, 5 cents, 10 cents, etc. Thousands of these turn up in every search so that buyers never find my items even in the auctions. Most buyers sort by the cheapest price. When stores were included in the eBay searches, my business was 4 times what it is right now. In fact, we are lucky to make 1 or 2 small sales a day. Duplicate this by the thousands of store sellers and tell me how we are going to survive with a 500% increase on our inventory whether it sells or not. If we make money, eBay makes money. Their commission on each sale is going from 8% to 10%--it seems to me that this increase should be enough. The auctions have sunk to junk sales, frauds in many cases, and cheap imitations by individuals selling out of their basements for pocket change. I don't think the eBay management has really thought this through or done enough research.

I've been selling on Ebay since 1998 and I've seen a number of these outcries - all to no avail. Once Ebay makes up its mind on hikes, or any other policy adjustment - they never go back. it's obvious that with the store fee hikes they've thought out the repurcussions and are willing to take whatever loss that will bring to them in favor of higher fees. We all know their reason for the store hikes is they want less store items and more 7 day auctions to get those fees and FVF's in as quickly as possible - as for making the Ebay experience more vibrant...bunk (and that's putting that nonsense mildly)! Customers, both buyers and sellers, mean nothing to Ebay. They are all for recruiting a steady supply of sellers - hence their late night cable ads about getting rich on Ebay. As for fraud - they really could care less...a fee and FVF is a fee and FVF no matter what the item is (and, afterall, what do you expect them to do since they are "only a venue"). Their bottom line is/has/and will always be - money! Their money and certainly not yours. The pitiful attempts they make toward cleaning up fraud is just that, half-hearted and pitiful.

I'm extremely disillusioned with what started out as a boon since Ebay has helped supplement my income for the past 8 years - but now its becoming a burden. I'll keep my store open for the holiday season - dumping cheaper items and keeping the more expensive (so what if I dump what a buyer wants - certainly Ebay could care less). After the holiday I'll probably shut it down and move my store items to many other upcoming venues where listing is either a tiny amount or totally free. I doubt sales would be that much less at other venues since stores are almost invisible on Ebay. I have one thing to say to Ebay "nothing is forever."

I would like to add to the commenter, EBAY ID Strangest-Thing who stated: Been watching YAHOO & also Found that RUBY LANE is Great for Antiques & Collectible Sellers from what I hear. I will be testing the waters and will RUN as fast as I can to them. EBAY Will Loose Well over $5,000-7,000 a year from me.

Please be aware that Ebay has merged with yahell so anything you sell at yahell will eventually end up in ebays pocket anyway.


I for one found that the influence of garbage by dropshippers and and the like are flooding feepay like mad... All those lil one cent auctions with the overcharged s&h hvae and are ruining ebay. It is b/c of these that they are raising fees and forcing us our. Feepay Loses money when they try to get 8% FVF on one cent. We the honest lil sellers are the ones who are hurt by all this.

In ADDITION the Influx of Chinese goods has become apparant, what hasn't however to most sellers and buyers is that there are certain places like singapore that have NO FEES! NO FVF, INSERTION PICTURE/GALLERY FEES- NOTHING! While the US, the Uk, Ca., and AUS Pick up the Tab!

To a degree this is true! What ebay has not revealed is the displaced businesses that will disappear in the next few years, from the developement of India and Chinese sellers capable of eliminating the middleman. Yes, its the smaller weaker sellers today, but in only a year or two, the larger and more secure sellers will experience the same.

To adjust I have so far cut my store listings by 30% and know now I must remove another 40% from my original numbers to address these latest changes. I am selling groupings cheap in the auction so sales are up for me, but this will be short lived. This means ebay stock and core listings will show an artificial increase that will fade when my excesses are scaled back. Mine is not a true profit, because while sales are up, I am not fully recovering my inventory cost.

So if ebay doesn't care about its customer base, then as a matter of PR, they are chosing foreign markets and high tech. alternatives instead and while some sellers will adjust, they will hate ebay for this. For me I work in law enforcement and have ignored stolen property fenced on ebay and vandalism tools sold regularly. As of now I have purchased these items to prepare cases against the auction GIANT! My feeling is I will sell until they stop me and enter a lawsuit if they stop me under Title 18, section 1512 of the US Code. As witness and informant to associated law enforcement, having purchased such items as I believe to be illegal, I will stop ignoring laws that apply equally to ebay. They have won a battle, but will lose the war! ebay in LE terms is not only the worlds largest yard sale, but the largest pawn shop of stolen property.

Where will sellers go? I have a commercial building on the Oregon coast with 10 of 14 spaces now occupied, see ebay item 9500823648, sellers who know retail will return to their roots. They will point to the ID theft and fraud online which is huge and e-commerce will take a hit. ebay may succeed, though I think they are in for a slow decline. Just GOOGLE search ebay & theft or ebay & fraud or ebay & Crime, its already begun and ebay is making the news, but its not a positive spin!

Jay Beswick
kingofpatches on 4 auction sites
Deputy Director of nograf largest anti-graffiti network in 21 countries, 70% of members are from Law Enforcement
www.nograffiti.com

Have you seen the rumblings of illegal bomb supplies? A story in the UK of the BROWN BOX or BAG, a buyer bids knowing in advance the blind buy has a 9mm pistol inside. In the news out of the UK last week, no one pays hundreds of dollars for a paper bag. Then heroine attacks stealing property to sell, with a organized ring of criminals paying the druggies upto $2,000. a day! Parts of an Israelee bomb? Parts of a Grenade, well atleast it wasn't a complete grenade. Then interesting liquids? I'm P.O.S.T. certified in Hazardous Materials Investigations and ebay isn't regulating these either! Improvised Ordinance and ebay is an international disaster for the OFFICE OF HOMELAND SECURITY. In 2001 my biggest fear was finding ANTHRAX in an ebay package and I was using my corporate seal to ID packages that I had mailed for that safety precaution. There are subjects of concern to law enforcement that could stop ebay overnight! With sellers and buyers in the MIDDLE EAST, ebay needs serious security oversight and right now its a JOKE! Copyright is bad, but buying ordinance or precursor chemicals poses a far greater risk.

In weighing the possible costs and benefits of legislative controls on access to precursor chemicals, the committee concluded that there would be no substantial benefit to law enforcement if only precursor chemicals were regulated without also imposing adequate controls on criminal access to the commercial explosives themselves. Because access in the United States to commercial explosives may not be adequately regulated at the federal level, assessment of the need for controls must extend to all precursors to illegal explosions.

As you understand what precursor chemicals are, at that point ebay should be concerned for what I just purchased from the United Kingdom. Items that will be shipped by air and fall under FAA safety regulations. My training was minimal for law enforcement and yet I have a shopping list I use for searching ebay and if I can find it, so can they!

One issue that adds to this was that the graffiti advertised spray paint once used CFC's, that were replaced years back. Now propellants include propane which has a vapor density greater than oxygen, a compressed and flamable gas. While some graffiti suppliers know to ground ship this stuff, the international sales from the UK this direction fail to regulate such shipments. With chemicals now a security concern, I think ebay ought to take complaints such as mine more serious, what do you think?

J. Beswick

This was posted by the UK Government;

I will give one example. The other week, it was possible for me to buy a gun from the eBay internet site. The way in which the sellers work is simple. They advertise an empty bag or box. The buyer bids for that bag or box, and when that is done, the seller throws in the gun for free. In this case, I paid £80 for a .22 air pistol, which is technically legal. However, the gentleman who sold it wanted to conduct the sale in a motorway service station, where he produced the gun from the boot of his car, complete with gas cylinders—which promptly took it beyond the legal range. It would have been possible for a 12-year-old child to purchase that weapon and have it sent through the post. That is why we have a problem with guns, and that is what we should be seeking to tackle. We should be trying to cut the supply.

_____

In a sort of bait and switch, any item can be invisible on ebay. If the seller notifies a number of posible buyers of whatever, ebay then acts as the outlet where the item can be bid up. Drugs, weapons, explosives or ? The item if an empty box is not likely to be accidently bid up to hundreds of dollars, but if no party complains, then why would ebay who gets a percentage of the sell. While obviously illegal, this method has been tested!

As long as buyers and sellers know whats inside, the game stays pretty much anonymous. THERE IS MORE!

A clear example of another person who knows nothing about how Ebay operates. Bait and switch tactics, witholding information from the public about fee hikes until the last possible moment, using the profitable side of a business to pay for a dead dog your getting killed on (Skype)is NOT a grow or die statement. It is however a we are dying statement. I have found other outlets for selling that work very well and FEEbay can go to hell. As for your friend, tell her to think about where that other 10 to 15% could go instead of in FEEbay's pockets.

Ebay has had a good run for an internet company. Unfortunately, their vision of "growth" seems to
run contrary to trends that many have seen in ecommerce. As most sellers know, the auction sell through rate has been declining for several years now. Auctions will always have a place, however a great many buyers now simply want to buy - not bid and wait 7 days to see if they have won. One great example of this was the short period in which ebay stores appeared in the general search. There was a huge amount of sales generated by the stores in that short period of time - simply sparked by the fact that buyers could, for once, actually see what non auction items were available. Instead of capitalizing on this phenomena, ebay has gone the opposite direction by downsizing stores and trying to force sellers to sell through a venue that now longer appeals to most buyers.

Both buyers and sellers alike are getting fed up with complicated and forever changing face of ebay. Buyers have to jump through more hoops every week just to make a simple purchase. Sellers must totally revise business plans every few months to keep up with ebays ever changing policy and direction.

Sellers have been brainwashed to a degree into thinking that ebay is the only place on the internet in which they can get traffic and sell successfully. Good move on ebays part - but the security blanket is quickly wearing thin. As many of us know - and many sellers now leaving will learn - there are a lot more viable options available.

1st, you are right, ebay doesn't care about the individual seller. But its the collective of individual sellers who have made ebay... not the other way around. Ebay never did anything to assist in the promoting of its auctions, except thru it own in house search. Ebay didn't feed the search engines with store items to promote its sellers except the anchor stores.

2nd, ebay is raping its North American and European sellers, to allow Asian marketers FREE listings and FVF. And lets not forget the white elephant skype.
As stated above.

3rd, THERE IS ST ELSEWHERE!!! Alternative sites are ready, willing and able to handle the traffic that refugee sellers can throw at it. While other alternative sites felt the crunch of this past summer, even ebay's numbers went down... www.bid-alot.com Grew! They are out there. The alternative sites are feeding Google, Froogle, the search engines, and other shopping directories.

When there is another migration of disgruntled ebay sellers including powersellers, the alternative will be ready. They are ready now. Maybe ebay's Enron-esque management will have to pay the consequences of their greed. To find out about more St Elsewhere sites... www.powersellersunite.com

4th, Verging on the border of illegality, I'm sure, but it sure looks like a Cook Book to me. Enticing sellers to transfer listings back to the auction, taking full payment up front, yet not give the credit till 45 days later????

In 18 months or so, there will be a repeat of this same Greedbay Feebay carp again. Ebay will begin to feel something as its powersellers leave, and the alternative sites grow. What will be Meg's motto then?? "We've fallen and can't get up?"

Eh...No real insights here...this argument could have been made about AOL about 7 years ago (oh, we can jack up prices because we're AOL and they'll never leave...how could they live without their Newbie77777 email address?) and now look at AOL. The skills learned by selling on Ebay can be used anywhere else on the internet where there are customers. And your might want to check your big seller friends math...does that profit include her additional health insurance costs...or other half of FICA her employer used to pay...or her new additional overhead costs like storage space?

But this piece overlooks that the market is not growing. Having more sellers selling more doesn't automatically mean there are more buyers. While certain markets are limited by either demand or availability (say 1960's comic books), the market Ebay is currently pushing hard for are new items (say new jeans or new toys), where there is plenty of existing substitutes and competing outlets for Ebay. As fees go higher, it becomes increasingly more tenuous to deal in these type goods (because sourcing and inventory price risks are already high, assuming they are actually legitimate goods, a fairly large assumption in many categories nowadays). Buyers think, hmmm, why should I buy this DVD for $16 including shipping and get it week vs buying at online at BestBuy.com for $17 including shipping and dealing with someone who I know and can make easy returns to if necessary. As it the seller might only be making $2 on it and if Ebay figures a way to get 20 cents more out of the deal, then this buyer would have to sell 10% more goods to just break even...and its not like Ebay's active buyers base jumped by 10% overnight. How would your seller friend like her biz if come November, she now needs to work 30% more than her old job just to stay at her current level...is it still worth it then?...how about next year when she needs to work 40% more? And lets not forget about the other sellers who will choose to go big rather than go home and who will likely drive margins down even further as they cut prices or flood the market with similar items just to stay in the game.

Oh, and its not like postal rates aren't going to be jacked up pretty hard due to oil price increases come 2007 either, further eliminating Ebay sellers potential pricing advantage on new, non-rare items. So sellers face lower margins, higher costs, and customers who are not willing to pay more…Yeah, that’s a total growth market, dude.

I was a seller on Ebay! Not anymore. Shoddy business practices give Ebay a bad name.
Just try to speak with customer service....what a joke.
As a seller, the fees were getting crazy, and the bad shoddy sellers can now have their feed back hidden...that is wrong.
The other thing is the private listings....well nice for some items for the sake of the buyer like porno stuff.........but for buyers buying such a thing as reborn dolls that are listed as a private auction (is only done that way so that the reborn organization members can bid up each other's dolls.
If you wanna be a honest seller on Ebay....it's getting harder and harder to do.
Point me to a new auction site.

An addendum to my earlier comments.

GBase has arrived. They are calling it a "test" at the moment but it is the thing that eBay CEO Bill Cobb has been terrified of since his meager fumbling start at the helm of eBay.

Google has unofficially entered the online auction game.

Do you think that Bill Cobb should have paid a bit more attention when Google sent 600 computer technicians to Arizona? Yeah, so eBay shot themselves in the foot when they decided to choke the life out of the people that built them... no big deal right? However, now someone else has their finger on the trigger and they're not aiming at eBay's foot.

Some say it's nothing serious. Hey, Microsoft gave eBay a million bucks to convert their auction site over into a venue for selling television advertising time. Yet the track record of the current eBay administration leaves MUCH to be desired. Does anyone really think they currently have the talent on board to completely transform the way television advertising time is sold? Can anyone believe that those in control of the tele-ad game are just going to roll over and let eBay write the new game plan? Sure, eBay is a big player now (or so they'd like to think), but these tv ad executives have been playing THEIR game for a long time and eBay doesn't have the money OR control to ramance them all into giving up what they've loved for so long.

There is just one thing that the current eBay administration is good at and that is selling. They're not selling value. They're selling ideas that come fully equipped with rose colored glasses.

This author puts his target value for eBay stock at $18.50 by September 1st of 2006. For the sake of their investors, I hope I'm wrong.

Ask not for whom the bell tolls, it tolls for eBay.

Ebay doesn't care about anyone but itself. It does nothing to stop the con artists from Asia and Africa that bid on our items causing us to lose our positions, added expense of selling fee that is reverse BUT we have to pay a second time to re-list an item that never should have had to be re-listed. Yeah, they say they will refund the second listing fee if it sells a second time, but we wind up losing the people that were interested in our auctions to begin with. The rating system is horrible too. One will not post until the other does so that they can retaliate if we post an honest opinion against them. These items have been bitched about for years, but Ebay does not care, it makes its money and we can all go to hell as far as they are concerned.