eBay's message to sellers: Grow or die!

What eBay needed to do was charge FVF on the total sale including shipping. I am sick and tired of the .01-.99 auctions with $99 shipping (yes the item may be worth $100) but this is fee avoidance.

If they fix these fee avoidances they could increase their income and still make the legitimate sellers happy.

eBay sellers are questioning the future of not only their own businesses, but the future of the auction site itself in light of recent fee increase announcements, tumbling stock prices and obvious unrest among some of the site's top sellers.
A recent announcement of a new fee scale, which increases the insertion fees (fees paid just to have the item listed on eBay) by as much as 500% for items listed in eBay stores, in addition to increasing the percentage of the final sale price of those same items has sellers small and large up in arms. eBay stores are a subscription service promoted by eBay for sellers to showcase their items. The format allows sellers to list their items for a longer time period than the standard auction format, and set a fixed price for the items.
The reactions from sellers have been varied, but as evidenced by the discussions on the sites public discussion forum dedicated to eBay Stores, few of the responses have been positive. Some sellers have closed down their stores in anticipation of the August 22nd fee increases. Others are boycotting listing auctions, which have significantly higher fees already, and listing only items in their stores, while still others have started off-site discussion groups and are investigating possible legal action.
The backlash is not unique to sellers on the company's U.S. site either. A group of Italian sellers gained national media attention in their home country after launching a Web site and organizing their own boycott of eBay after the company's fee increase announcements.
UK customers are going on strike this week over recent change. A group of eBay traders has called a one-day strike for Tuesday 15 August claiming that the auction site has made listings less visible and raised fees for bulk sellers.
While eBay's North American and European sellers are facing the high fees, eBay's site in China remains free for sellers. They (China) are able to list on the U.S. site (Ebay.com) as well without having to pay fees.
An announcement by eBay Monday, August 14, ignited a new firestorm when the site promoted a 10-cent listing fee special scheduled for Aug. 15 and 16 to offset the possible impact of the auction boycott. The special prices will only apply to items moved from current store inventory to auction format during those two days.
However, a notice on the sites announcement board contained a stipulation not mentioned in the mass email to sellers promoting the sale. The announcement board states that sellers will be charged the regular listing fees for all items, including those moved from store inventory on the 15th or 16th, and be "credited" for the difference on September 30th, a whole billing cycle AFTER the sale. In essence, eBay is borrowing their customer's money for 45 days interest free.
That announcement has left sellers wondering whether eBay is trying to post higher third quarter profits to appease stockholders in light of the recent decline in company's stock prices. The majority of sellers assert that Fraud, Site Issues, and Constant change are the actual reasons buyers are choosing to shop elsewhere.

Ebay itself owns no inventory nor does it have any contractual agreement with its main labor force. It has been years since Ebay has shown any sense of innovation with regard to its platform or design. Those who are old enough to remember that K-Mart was once king may connect all the dots and reason that this may not be a wise long term investment anymore. Quarterly growth is only one factor in determining long range strategies.

When BUYERS figure out that they can get "it" for LESS just about anywhere else, there will be a dramatic effect on eBay's business model.

As long as sellers are able to move good through this channel, we will utilize it. Ultimately, the cost of doing business is passed on to the buyer.

I've found a LOT of items on eBay, plugged the item into a search engine and FOUND IT FOR LESS elsewhere! Consumers aren't stupid and eBay's error is in underestimating consumers, not seller tolerance.

BTW, a LOT of sellers are diversifying. We're opening stores independent of venues and we're seeding/selling our goods for less at multiple smaller/free listing venues. No single venue will replace the eBay business volume, but these smaller/newer venues are more established than they were in early 2005 and gaining momentum. Come find out more at PSU - PowerSellersUnite dot com

Hello All,

I have been watching the ebay movement since its debut. My friends, Ebay is here to stay. Let me explain, If you asked 100 people where they go when they shop online, 99 people would say ebay. What ebay has accomplished is a household name. even if google or yahoo would start up an online market place it would never get to the stage ebay is at simply because ebay will keep growing while the others struggle to get where ebay is today. So yes I do agree GROW or DIE is the right words for this situation. Business is business no one hands you anything in business you make your own bed, if you want to sit back and cry and petition to bring prices down than you will die (your company). The internet as a whole will be the only way for retail business in years to come to be able to survive.

First of all -- great comments from a well-informed and extremely intelligent reader base here. This is the kind of real-world thinking that eBay should be paying attention to. After all, your first concern should always be *the customer*. Not the employees or shareholders. Unfortunately, most public companies *do not* make the customer the first priority, with Wall Street always in a panic about quarterly results and analysts going all over the map with figures while not looking at the details of how a company and its customers relate to each other in other to establish growth and adapt as market needs change.

Personally, I think eBay is a monopoly, but it virtually created the market it now dominates, which actually excludes it from being a monopoly I guess. Is there a very equal alternative? Right now, no. Google's Checkout service may be a wolf in sheep's clothing, though. Maybe we need a "gBay" from Google? Competition is *always* good for business, as it forces innovation and adaptation, and the consumer benefits.

Great comments, folks. We should roll these all up and mail the thread to Meg and Bill Cobb in short order ;-)

Brian
www.bloggingstocks.com
GOOG, WMT

What about waggletop.com? Ebay will not allow that on the message boards but many of my sellers (I am signed up with..I buy too) told me I would find them there. Do you think it will take off? I am pretty disgusted with ebay

I believe eBay's era will eventually comes down to an end when a real potential competitor pops up. Look at AOL was once a top notch in the internet industry and also lack of customer service, look what happened now. eBay should know it's the sellers and buyers made them where they at right now. With the fee hike this time it really made lots of sellers seriously looking and explore other alternative sites but in my opinion as for the time being eBay is still the big player right now. No matter how many sellers closed their store or protest, there always be new seller jumping into the eBay black hole.

There may not be alternatives elsewhere but we have an alternative in Australia.
It's grown from 34000 to ~49000 members since July 20 and offers $0 listing fees and low FVFs.
In addition they have and are offering further improved member verification methods to address the sort of problems eBay has with fraud.
I've been buying & selling there happily and have referred many former customers, some of whom are buying from me there. I'm loving Oztion.

I have been with eBay since 1998 and switched to a store when auction sales fell because my customers were sick and tired of sorting through the junk offered. The run has been good, but with the new fee hikes I can no longer make a reasonable profit selling on eBay. Like many others I have closed my store and do not intend to go back to their auctions. What eBay fails to understand is that we have built up our reputations and loyal customers and as we leave for St. Elsewhere we will take many of our customers with us. If you look at a listing of the 500 top sellers on eBay you will find that out of the top 12 sellers, three have already left for greener fields. It will be interesting to see just how many will leave after the fee hikes take effect on the 22nd of Aug. The decline of eBay may not be as quick as Enron, but it will surely go the way of AOL as eBay goes from a premium auction site to a bargain basement garage sale.

AOL faded but not gone; and it will be back. Ebay will be around a long time as well. Peace to all!

Head-Lines! EBay gambles on higher fees to boost higher growth! Anaysts agree with eBay that this is what eBay needs to do.

I say it's about time!

They are a business, and like any other business must look out for their business or get clobbered. EBay is the greatest thing that has ever come along to let people auction their wares and make money without leaving their house. They are an AUCTION COMPANY. Anyone can sell on eBay. Any dummy can do it! Thank God for eBay! Where would we sell and buy our wares if not for eBay? Millions of people online looking and buying. EBay needs to do what it has to do to keep with current times. Other companies do it!

To the Powerseller.com united, on strike, I say to hell with you Power-Sellers who want to Dominate eBay! ( I say move-over and move-out already) Other sellers will take your place pretty quick! LOL.. No sellers should dominate eBay. Power sellers or not! You should all be kissing eBays A** for letting you have an avenue to sell.

Don't like the new rules? Then move along, do your own thing,lol. Don't bad mouth eBay! Millions and Millions of small sellers will quickly take your place. ( You will not be missed)

EBay is making the right choice for a change. Going back to their roots called eBay Auction. You want to sell your item on eBay? Pay the new fee and shut-up already!

I don't like eBay's tactics....but there is nothing the eBay community can do. If you can still make a buck on eBay, then continue. They are the only game in town right now. Since 1998, I have 4 eBay Power Sellers which generates $6k to $7k per week. Am I making money? No, not really. For the past 3 years, I have been dumping out my excess inventory. It is very difficult to make a 30% margin on eBay. At best, I get about 10 to 15% margin after FVF and paypal fees if I have the right product but it eventually sells out and I can't get anymore or the Overseas sellers undercut me.

At this time, I am not willing to leave eBay. They have me by the balls. I need that weekly cash flow because it helps my business. If I make 10% less, then that is part of doing business. I have to adapt and keep moving.

If there is an alternative to eBay, I will be the first to jump boat.

good comments. i stopped buying and selling on ebay several years ago because the site was too basic yet complex. the interface hadnt changed in years. adding a new item was awfully tedious. my experience with paypal was dreadful. (you know they do not erase your financial details off their db, whether you delete your paypal account) the skpe purchase for a billion seemed very illogical: little synergy between auctions and voip. yet, i figured that ebay would grow along with a growing public that was comfortable about buying/selling, credit carding and paypaling on the net. i'll have to trust my instincts.