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.











Reader Comments (Page 1 of 4)
12-23-2008 @ 3:55PM
STERLINGDRAGONFLY said...
My comment is to go over to Bonanzle and see the up and coming future new Giant. They are growing very rapidly with new sellers, merchandise and new buyers.
They use google to feed the items out into the internet and almost no fees at all to the sellers. If you are a seller online check them out. They are so nice and very user friendly.
I personally do believe they are going to be very tough competition for "E.B".
I feel at home there after going through sheer "H..." with the bay.
They are all fixed price and offer "NEW as well as "USED" merchandise. You can find about anything there. They even have a online chat set up in each booth so the buyer can ask the seller questions and instantly get a reply, provided the seller is on.
Wish you all the Best Holiday's!
Sterlingdradonfly
12-23-2008 @ 3:57PM
Jessy Scholl said...
John Donahoe, you got what you wanted. Let's face it, eBay will never be a fixed price leader. The bulk of the criticism is that eBay is doing everything it can to drive off the main customer which is the seller big, medium, and small. These sellers are those that work hard to acquire product from all sources available including rummage sales and wholesalers. With that, here are the changes that the site made.
1. Started to and continued to raise all fees so that sellers would be driven away from the site.
2. Introduced Detailed Seller Ratings (DSR's)
3. Did a backdoor fee increase of all final value fees while promoting that it was a fee decrease because you would save money on listings.
4. Took away the ability of sellers to post negative or neutral feedback.
5. Tied DSR's into the seller's feedback.
6. Installed and promoted Best Match searching which is tied into the seller's feedback and DSR's allowing the system to make sure that if there is less than one minute left on a "good seller's" auction, that auction is stuck on page 7 of the listings while a "Diamond Seller" has a listing hogging the top of the first page, that ends in 28 DAYS! This is in a situation where there are no featured listings.
7. Forced sellers first to accept paypal if their feedback is under 100, then forced sellers to accept paypal only while dropping other forms of payment including money orders, and checks.
8. Welcomed "Diamond Sellers" such as buy.com and smart bargins.com to the site and offered them almost free listings while almost everybody else has to pay through the nose.
9. Required all "non-diamond sellers" to post accurate shipping costs and even reducing the ability of sellers to charge above a set shipping price on DVD's. This doesn't apply to "Diamond Sellers." There is one unamed "Diamond Seller" that is selling office products. They sell small items for about a dollar and charge $7.50 for shipping. You can get a better deal on a stapler from a high-end retailer.
10. Last, but not least, eBay is going to be posting even more changes in the new year, and you can be sure that they will not be seller friendly.
12-23-2008 @ 4:04PM
STERLINGDRAGONFLY said...
JESSY said it all! These are all the reasons for the big FALL of the online empire. Sellers are leaving in Groves. Please check out Bonanzle if you are a seller. You will love the people and watch how rapidly they are growing from your own home page. I am very excited about this place and I am going to do all I can to promote it.
I am a very disgruntled "bay" seller and trying my best to get it all over to Bonanzle.
Love it, Love it, Love it!!!
Sterlingdragonfly
12-23-2008 @ 4:16PM
Jessy Scholl said...
I know. The sad thing is that if eBay didn't make all those changes, they would be thriving in this economy. This would be to the point that Wal-Mart would be trying to get into the act.
I see one major mistake that eBay made and that is Meg Whitman failed to acquire You Tube when she had the chance. Think of the revolution in selling that would have made, and it would have justified a major fee increase while You Tube gets the eBay membership added to its base.
12-23-2008 @ 4:23PM
STERLINGDRAGONFLY said...
JESSY.... you are so right! You and I and most of all the other sellers should have been the ones making the decisions. But no...it is like banging your head into a brick wall to get to them and still nothing.
I am a powerseller with 100% positive feedback with over 5,000 transactions. My DSR's are Excellent and I checked all the catagory's in my store in their search and I am on the very LAST pages of all the listings. Some of my stuff is 60 pages back and my shipping fee is only 3.85. I have been on the phone and email with them all week and about to pull my hair out. They DESTROYED my business.
Bad move for anyone to try and sell on E.B. There are too many other places out there now.
Did I mention BONANZLE.COM ??????
12-23-2008 @ 7:53PM
Dave said...
Seems to me that EBAy has given away the one thing that made their site a magnet - the cool and bizarre things that turned up for sale. That's what made EBAY unique and successful. My usual search used to turn up dozens of items of interest to me - almost nothing now, so little point visiting the site. So, having driven away the small sellers and thus given away their unique advantage over other e-commerce sites - given away the one thing that got the "eyeballs" - they're now trying to compete with all the established thin-margin e-commerce sites - good moves!
12-23-2008 @ 7:43PM
Zoe said...
John Donahoe is getting exactly what he wanted.
He has been waging a War On Sellers for a year now. Us small Sellers make too much "Noise" for him. He only wants the mega Diamond Sellers, because he thinks they are the money makers. He has forgotten that it was the smaller Sellers who made Ebay successful in the first place.
Also, it didn't dawn on him that Sellers were also Buyers. Every time JD manages to get rid of a Seller, he also loses a Buyer. That is one reason Ebay's traffic is down. I still sell there, but I don't even think of buying anything there, because I am so disgusted with the company.
I have made a New Year's Resolution to move my stuff to Bonanzle, eCrater and Etsy. But, I will miss the auctions. I already sell on Amazon and love them. That is where I do most of my buying now.
One of the reasons Ebay is dying is because JD has decided he doesn't want auctions anymore. What is wrong with having both auctions and fixed price? Some Buyers and Sellers love auctions. If not, then there are plenty of fixed price offerings on Ebay I don't understand why Sellers are not given a fair choice. At this time Ebay discourages the auction format, and has been suggesting to Sellers that it isn't the preferred choice to sell inventory. Auctions are punished and they don't get the exposure of fixed price items.
Also, it flat out isn't fair that the Diamond Sellers get free listings, their DSRs adjusted when they fall too low, and their Final Value Fees are lower. They don't have to play by the same rules as the rest of us.
JD and his minions are killing Ebay! And, it appears they intend to keep doing it in 2009. He has said that more changes are coming, and that we won't even recognize Ebay in about a year. He is getting what he wants.
12-23-2008 @ 8:05PM
Mike said...
I love the auction market but I'm changing over to a fixed price format. One thing is definite, I won't be listing with Ebay.
12-23-2008 @ 8:26PM
smarter than JD said...
The first huge and biggest mistake of all the mistakes and the most costly one is BEST MATCH it's terrible and most likely is the cause for 99.9% of the decline.
auctions cannot survive with best match as the default. it's useless for anything really. it's only a tool used as diamond seller favoritism to shove overpriced stuff in front of buyers who aren't buying obviously!
it's also robbing every seller that pays a listing fee. it's blatant discrimination that has been going on almost a full year now.
if a seller isn't good enough to have their items make the ending page and get seen then ebay should not accept any payment from that seller PERIOD!
the healthy mix of buy it now for the people that wanted it quickly and auctions ending by time was the way to go. buyers were used to the system that was in place since the beginning. now the site is a mixed up mess because of all the new changes to the search and sort.
it's like if your grocery store switched the aisles around every other week. you'd get frustrated and shop someplace more familiar and less troublesome. maybe in five to ten more years when people learn the new ebay they might start to make money again?
Then there's the feedback issue. this doesn't bother me much because i'm as honest a seller as there is, but it did bother a ton of other sellers who left and never came back. sellers are some of ebays best buyers. it also opens up the seller to blackmail and extortion. it's already happened to me more than once so far. of course i don't fall for that crap at all.
bottom line is when you take away the unique items and alienate the original core of sellers and add in BEST MATCH you end up with a dead ebay.
if they leave it like donohoe has set it up
it will never survive. familiarity is key to success and they had it all but donohoe wanted to be like amazon. well there is already an amazon sorry jd.
there was only one ebay and donohoe killed it quick!
12-23-2008 @ 8:48PM
Lynne said...
after 10 years on this site, and NEVER getting any support or help from ebay staff, I have paid my dues, listed and followed rules, always did the right thing, and always used my words judiciously. I'm a professional Nurse, 55 yrs old, and today I had an email from ebay's team from the discussion boards speaking to me in a harsh, punitive way letting me know I had 7 days to read the posting policies on the discussion boards, so that I would have time to understand them.
I have never been so insulted in my life. Whether I was telling my bad buyer stories, or defending some poor girl who was going through some tough times, it was not anything I said. I was not using any threats or profanity, I would never do that. I was removed simply because ebay staff was eliminating whatever the truth is , and how some of us sellers experiences are. It's like being in a communist country when you participate on the ebay discussion boards. It's no wonder everyone ends up leaving. They are so poor at keeping the people who put them on the map. And ungrateful.
12-23-2008 @ 8:58PM
Lynne said...
They made a very big mistake doing this to me. I am very proficient at getting my word and my opinion across. I advocate for my disabled son, AND I have worked for my local government with families, children, and the elderly for many many years. I will not take this kind of treatment lying down. I will continue to advocate for the sellers of ebay who have been abused and treated like so much garbage.
12-23-2008 @ 8:56PM
smarter than JD said...
lynn, they don't want the stockholders to know anything that is really going on there.
shhhh....it's the economy..lol
it's donohoe and his dumb ideas and 85 million users know it.
if they put it all back together tomorrow the way it was before captain disruptive destruction overturned the place in may 2008
by january 1st 2009 it would be busy again.
12-23-2008 @ 9:08PM
Lynne said...
And it's a good thing that I'm a big Schwab investor too! I will make my opinions of ebay known on every stock blog I can find. It won't be hard to do!LOL!
By the way, there will be another 2 auction sites that will be very similar to ebay's old auctions. One will be GoAntiques, and that is in the works supposedly by the 2nd or 3rd quarter of 2009, and the other is seeauction? or auctionsee? I forget, but Auction Wally had an article on them today, go take a look at that, since Auction Wally really seems to have his finger on the pulse of our community! Good luck to everyone leaving ebay and selling elsewhere. may we all have a merry and happy holiday WITHOUT ebay contaminating it any further!LOL!
12-23-2008 @ 9:17PM
Chrisq said...
I was a smaller seller 700 feedbacks 98% positive. I was a slow (once a week) shipper, and I thought it was okay as long as you said so in your listing. Well, well, well - people I guess don't like that. I am suspended for one year, due to the fact that I received less than 10 ratings and I had a 3.8 out of 5 on shipping time. I will never buy anything on there ever again. I always sent every item, I refunded if there was a problem, I had good descriptions, I was a good packer, I sent a nice note. What do they want? They need to have a ebay yard sale category and put all of us regular people in there. They can sell the new retail items on something else.... Just the most stupid thing ever. They made at least 2,000 - $4,000 on me every year for the last 5 years.... and I am not good enough to even sell anything - FOR A YEAR? F-THEM.
12-23-2008 @ 9:47PM
STERLINGDRAGONFLY said...
You are all so right about e.b.! And to "smarter than Jd, you are soooo right. That is exactly why I am leaving. The D... best match does NOT work right and I have been the rounds with them. They have my items that are ending in 20 plus days way ahead of my items ending in a few mins. My items ending today are on the very back page and the newer ones are 20 pages ahead. And they are in EXACT declining order so it is so obvious that it is screwed up! I have called and called and taken tranquilizers to calm my anxiety on the matter to no avail. My business is destroyed and I am really suffering financially as it is my only income. I absolutely Despise the place now and can't hardly stand to even open the page. I am now on BONANZLE.COM
and they are AWESOME. I love that place and it is like a breath of fresh air.
Another thing that was mentioned above it that JD didn't think about the sellers are the biggest buyers e.b. had. I like him, am still on there a little, but I refuse to buy one single item, never, ever again from them. We were the buyers!
People please check out BONANZLE.COM, it is really a great place to be. Fun, the people are great, almost no fees, great and fun blogs with games and all sorts of fun stuff.
The site is extremely user friendly and you can watch BONANZLES growth from your home page. They are growing by several hundred new users each and every day. I think they will be huge in the very near future. I know I will be there to help them in what ever way I can.
Buy there, sell there, just go there and check it out. They have a huge variety and there is a open chat in each and every store so you can talk instantly with the seller (if they are online).
S. Dragonfly
12-23-2008 @ 9:49PM
marcommom said...
Ditto to every comment above. I loved ebay for 9 years but the last 1 has been depressing - like going backwards when you have tenure and have been a good "employee."
I'm making the move to BONANZLE because of all the alternatives I found to sell designer clothing and accessories, this was the most seller and buyer friendly. The site grows daily - and it will take time to become a giant - but I'll be along for the ride as will 15,000 others (as of yesterday) - and then JD will see what he has destroyed.
Go BONANZLE!
12-23-2008 @ 10:49PM
DiAnn said...
Ebay has treated the small sellers like dirt.
There are lots of people that want auctions not buy it now.
They are now forcing pay pal, there is just some people who want to pay with a money order or even cash.
The feedback is the worse thing they ever came up with, you are having to wait maybe a month or more for a payment then not get it in fear of a neg, which is not the seller's fault, people are bidding for the heck of it because they know Ebay does not care and that they can only get a positive.
Go over to Bonanazle it is a great place and growing every day.
They have fixed price and best offer also, they accept money orders, google check out, pay pal or even cash if that is the way the customer wants to pay.
Bonanzle , great forums, great place, free to list and very cheap final value fees.
Bonanzle.com
12-23-2008 @ 9:59PM
SherAhnn said...
I left the Bay over a year ago and have been researching other sites.
I joined Bonanzle.com in Oct of this year.
They had about 800 users. Now we have over 15,000 users. Most of them are ex-ebayers. I left ebay because of Item Specifics and Best Match even before the new feedback rules went into effect.
Selling unique items does not work with Item Specifics. They also get lost among the "mass Produced" items that were populating the whole page when you tried to browse.
When you go to an antique store, sometimes you don't know exactly what you are looking for..Just something differnt and unique that you dont have.
So you browse ! And you might come across that special item.
Can't do that on ebay anymore..too time consuming to read through all the garbage in a category. So to me Bonanzle makes more sense for the Unique !
Also, low fees, friendly atmosphere, sellers helping other sellers, immediate answers when you ask for help.
Private chat in each booth where you can talk directly to customers and relate with them, iron out all the kinks and questions without having to email back and forth.
So many other positives that I can't even list here... Forums are great and fun.
Make selling and buying fun again !
Come to Bonanzle.com
Sher
12-29-2008 @ 8:04PM
Kaboodle Gifts said...
eBay has taken the fun out of selling online. In an effort to expand our business without being told how to run it, we have chosen to partner with Bonanzle. The ease of use and warmth of the community is what makes Bonanzle the right decision. Now we can promote our personalized line baby bibs and kids room signs and know that they will be seen by the masses.
12-23-2008 @ 10:14PM
Bobbi85710 said...
ebay is soooooooooo 20th Century with all the kinks, rattles, scams and fraud. It can no longer be mended as the PTB have turned a deaf ear. We told them...now we're sold---- on Bonanzle & many other venues. No buying ebay, no selling ebay, and no Paypal accepted or used anywhere.
www.bonanzle.com