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While this is a week when many of us are celebrating and enjoying some much needed time with friends and family, things are not looking so cheerful over at eBay (NASDAQ: EBAY) as slow sales and low traffic are hurting sales on the popular online auction site (subscription required).This is the first holiday season for the company under its new CEO, John Donahoe, and things are definitely not looking too jolly. According to research firm comScore Inc., the site has been losing a lot of valuable traffic to its competitors, such as Amazon.com (NASDAQ: AMZN) that have more fixed-price products for consumers to purchase, an area where eBay is still lagging.
For the period of November 3 through December 14, a time when many of us were busy spending hours online researching those perfect presents to hand out this holiday, eBay was just not getting the hits that it usually does, and traffic was down by 16% from the same period last year. In contrast, Amazon was enjoying a modest increase in traffic of 6% during the same time frame.
While it is true that eBay has been seeing a large number of users defecting to other popular e-commerce sites such as Amazon, Walmart.com and Sears.com, it is also important to note that eBay is still the king when it comes to e-commerce, and the site is still sitting on three times the volume of its competition. Regardless, the writing is on the wall, and the site is doing all it can to move quickly into the fixed-price marketplace that has been gaining steam over the past couple of years.
It is a tough situation for eBay as it tries to aggressively redefine itself. For a company that has built itself on the back on the auction business, a too rapid and aggressive move into the fixed-price business is definitely going to ruffle a few feathers. The company has to try its best to appease its current sellers while at the same time moving as strongly as it can to keep and regain buyers, all the while trying to entice new shoppers into the site.
Some sellers have voiced disapproval, stating that the company is moving too quickly into the fixed-price business, and that their loyal customers are still more interested in finding the lowest price merchandise available, which is often achieved through the auction side of the business.
What are your thoughts on the current situation? Should eBay look to maintain itself as primarily an online auction house? Or, should it re-invent itself as the largest fixed price e-commerce site online?
Which sites do you typically look to when shopping online? Personally, I hardly ever wander onto the eBay site, for me its the fixed price sites that attract my attention, mainly due to the "fast food" mentality where I like to shop online, find what I want, buy it, and have it shipped to my house... all within an hours time. I can't stand bidding on items, trying to outbid others and waiting on pins and needles to see if I did indeed save that precious $2 on an item instead of just going ahead and buying it online.
What are your thoughts? Let us hear what you think about eBay, and the other e-commerce sites that are out there.
Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.
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Reader Comments (Page 4 of 4)
12-29-2008 @ 7:46PM
Oddstoendless said...
I both bought and sold on ebay for 9 years. It was a place where I could buy and sell items that were out of the ordinary, vintage, collectible. But, all of the changes that cascaded down in the past year that have been referenced before, made it impossible to remain there. Requiring PayPal for transactions was the final stake in my heart. It makes no sense at all for a smaller seller and I really question whether it is ethical for ebay to double-dip by mandating a payment method that it owns. Ebay seems to have forgotten that sellers got them where they were. When I was notified by some power sellers from whom I'd bought that they were moving on, I knew there was no sense staying. Talk about killing the golden egg producing goose! I am at OnLineAuctions.com now (OLA) as are many other refugees from the bay.
12-29-2008 @ 9:46PM
dragonmum said...
The emperor has no clothes. Sad. Naked emperors freeze to death. Donohoe stole emperor ebay's clothes. a crime. Used to be fun. Now it's a joke. Not funny.
Big sellers cheaper than Walmart. Junk from China, etc. Small sellers & power sellers of unique, special items are Jumping ship. Smart rats! Donohoe is running USS eBay right onto the rocks.
I jumped in Feb. Thank Heavens!. I've found new homes at OnlineAuction.com for auctions and Bonanzle for fixed price. feebay is no longer the only game in town, and that's what it's turned into - a game that's no fun & run by big box" rules. Thanks to the collapse of this monolithic marketplace, a new generation fo eCommerce has been born. eCommerce 2.0. Cool!
12-31-2008 @ 8:00AM
Chris said...
I was proud to help eBay build their empire.
I was ashamed to be associated when profit dollars meant more than people.
Do one thing well, and people will love you for it. Change direction mid-course, and you're back at square one.
I'm amazed that "professionals" in their industry run eBay the way they do.
My 13 year old niece has a better understanding of business than these monkeys. Of course she's not tainted by greedy big-business in America. Perhaps her heart will remain true.
12-31-2008 @ 12:43PM
Gerald said...
Ebay now treats everyone (buyers and sellers)like dirt, except for scammers, extortionists and deadbeats....they get empowered. They have poor to no customer service (and usually very rude). They do not do what they say they will do.Their new feedback policy has ruined my buying experience. I used to buy weekly on Ebay, but now I'm done.
12-31-2008 @ 6:44PM
Platinum Lynda said...
Hi I have been an ebay seller for 9 years and moved my items to fixed price and have had a great Christmas. Most of the sales however were ater the period of 12/16 non stop sales from 12/18 until 12/31 so wondering what happened then? I still have auctions but didn't need any with my fixed price flying off the shelves with an average 450 price for designer jewelry and accessories. I was basically in shock about this on ebay I have never experience the cyber Monday after Thanksgiving phenomena. I think perhaps people shop around for my items and the cyberMonday is mostly for electronics. We also continue selling generally who knows in this market through March due to bad weatther and boredom throughout the country. It is dead today so we may do some auctions. I am just so happy that my December was the best on record.
Maybe needs to have two sites one for auctions only and one for fixed price. ebay has more and more fixed price items and I bought a great loaded HP laptop 4GB with office loaded for only $600 if you bought this at costco or amazon it would not have had the customization and it is still under warranty. I really think it depends upon the product but ebay is the go to place for many of our items and as well as other with the same brands because generally they do not go on sale and we buy wholesale. Amazon has too many fake designer items and ebay is our venue of choice. We tried a website but due to the feedback system people feel more secure using ebay and paypal but we have great feedback and 5DSRs or 4.9 and that has helped since it weeds out sort of luke warm positives and real ones objectively so the seller isn't sure who left a low star or not. Let's face the customer will be king in this environment more than ever!