eBay is the next AOL

Do you remember when it seemed like everyone was on AOL?  Do you remember when people were basically addicted to AOL chat rooms and was paying hundreds of dollars a month because AOL was charging subscribers by the minute?    Look where they are now.  I think eBay is going to end up the same way AOL is.  eBay is enjoying their monopoly position by basically gouging their sellers with exorbitant fees just like AOL once did.  That will become their own undoing as time goes on.

I believe eBay will become completely irrelevant in the business they are in.  However this isn’t going to happen overnight.  It will be a slow and painful death that will take a decade.  They tried to diversify their business by buying Skype and StumbleUpon but those didn’t go anywhere.  Coincidentally AOL did the same by making bunch of acquisitions that didn’t go anywhere.  Remember Netscape?  How about MapQuest?  Does anyone use them anymore?  eBay is like a rich blind man chucking large bundles of cash aimless hoping something will stick.  As they become more desperate to prop up their existing business they will be even more aggressive at acquisitions.  AOL did the same thing in the past.  Remember the Time Warner acquisition fiasco?  I believe eBay will repeat the same mistake AOL did.

I can even make a generalization that any company with the combination of deep pockets and dysfunctional management can fall into the same trap.  They are so big yet they still have to meet the expectations of wall street’s quarterly growth rate for their stock price to go anywhere.  The share holders also put pressure on the company to get the stock moving upwards.  If their core business has flattened out the only way to do is through acquisitions.  Look at Microsoft for example.  Their stock hasn’t gone anywhere for years so they are desperate to do something.  That’s how you end up with software company trying really hard to get into an online advertisement business even though their core Windows product is in trouble at the moment.

eBay’s long term future looks quite bleak right now.  Eventually eBay will become a has been just like AOL.  I do believe that company or companies that will take place of eBay is just beginning to emerge.  They are so small they are completely under the radar but they are there.  Mark my word.

Books Category Getting the Buy.com Squeeze

Anyone remember when eBay announced that they are partnering with Buy.com? Here is the blog entry announcing that partnership. Of course they make it sound so innocuous but after a month here is the result of that partnership.

Buy.com has an eBay account and currently listing about 517,000 items. Last week they had just over 500,000 items so they are in the process of increasing that number incrementally over the long term. Here is a shocker. Of the 517,000 items, 420,000 items are in just Books category. eBay currently has about 962,000 items listed in Books category as of this writing. That means Buy.com’s items account for 44% of the total eBay’s listings on Books category. On April 8th, which is only two months ago the Books category had 541,000 items. If you do the math the sharp rise in listings count of Books category is entirely due to Buy.com. On a side note, just about every category except the ones Buy.com is listings are down from the early April when I started tracking listing counts.

It’s clear Buy.com is currently flooding the Books category with their stuff right now. If you’re a book seller right now you’ll getting hit from the multiple sides at this point. Increase in final value fees, crazy Best Match search, newly instituted one sided feedback system, and now this.

You’ve probably heard sellers saying that eBay doesn’t want them anymore and they want to push them out. You could have thought that this was just an over exaggerated complaint coming from a bitter seller. It’s pretty clear now that this is in fact true. eBay is actively trying to push sellers out of certain segments of eBay. Any illusion that there is some level of fair playing field between sellers is no longer true at this point. eBay as we know it has been changed to the point where it’s no longer recognizable from the past.

Here is a message left on the aforementioned eBay’s announcement to Buy.com partnership.  I think this pretty much says it all.

Amber On 05.04.2008 at 9:03 pm Said:

Usher, thank you for popping in. I’d just like to say that after all of the changes my business has absorbed, this particular decision has tipped the scale.

I am going to close my ebay store.

I’m a media seller (I guess that should be “I used to be a media seller.”). I’ve operated a tiny, but reliable romance bookstore here for over 5 years. My repeat customers are 40-50% of my business every month. People who shop on ebay because they like buying from me. By turning the site over to the big retailers, you’ve undercut that person to person loyalty that created this site and that makes eBay unique.

I’m wiping the tears from my cheeks as I contemplate the end of my selling career here. I don’t understand the logic of destroying what is wonderful about this site in favor of a quick buck. People don’t buy here to have a retail experience. Most buy because there really is a person behind the computer screen, not some automated software.

It won’t make any difference to you or other eBay execs, but you’ve lost me and will gradually lose my customers as well. I won’t buy on the site and will move my inventory elsewhere. Clearly, I’m no longer needed or wanted here.

Which categories are next for Buy.com? From the looks of it Computers & Networking and DVDs & Movies are next. Buy.com currently has about 29,000 and 22,000 items in those categories respectively. The transformation has begun and we’ll see where this will lead to.

May 1st Boycott

This is it.  It’s on.  No buying and no selling on eBay from now on until eBay retracts all recent changes.

Bait and Switch, Part II

The first bait and switch was when eBay announced their fee decrease which turned out to be a big fee increase at the back end. Now eBay is at it again with this sort of double talk. eBay Motors is having a “special” but once again it’s not what it seems.  Here is a direct quote from the eBay Seller Central thread describing this:

I got an email today stating that from 4/26 through 5/23 there is a listing special – $5 off the regular price of $40, so it costs $35 to list a car. But they more than doubled the Transaction Services Fee – what had been $50 is now a rediculous $125. They put that in the email but only in small print and I’m sure it’s going to catch a lot of people off-guard.

Of course this is suppose to be a limited time “listing special”. What kind of special promotion actually raises the overall cost of doing business? Does that mean the transaction service fee will drop back down to where it was? I somehow doubt that. It looks like they’ve snuck in a large permanent transaction service fee increase while distracting you with the $5 discount. This sort of misdirection technique is what magicians use to pull the rabbit out of the hat. Sorry eBay. No one being fooled by this one and none of us is remotely amused or entertained by your slight of hand illusions.

Let the Promos Begin!

eBay UK has just announced a 5 pence insertion fee promotion to boost their slumping listings count shown below:

Of course the timing of this kind of promotion isn’t a coincidence. What’s slightly puzzling is the timing of the announcement itself. They usually announce these listing promotion fairly close to when it will actually begin to prevent sellers from delaying their new listings. However this time they’ve announced such a promotion about two days earlier than they normally would. My guess is this is in an attempt to sway sellers away from participating in the global May 1st boycott. It is designed to prevent a noticeable sharp drop in listings count on May 1st.

May 1st Boycott

We’ve getting very close to the May 1st boycott now.  We have less than a week left so it’s too late to post a seven day listing as of seven hours ago.

I’ve been busy working on a site for everyone to see.  Check out fubarometer.com.  It’s a simple site that shows you eBay listings count charts.  I hope you find it informative and useful.

April 22nd was the 10 cent listing fee promotion for Power Sellers and it appears it had the desired effect eBay was looking for.  It boosted the listings from 13.8 million to over 17.3 million.  That’s a change of 3.5 million in one day.  Here is the chart showing the steep rise.  Just so you know that chart’s y-axis is double that of a normal day’s scale so the change is a rather drastic one.  Obviously eBay is getting ready for May 1st just as we have been doing for two months now.  I imagine they will likely to do another promotion for non Power Sellers just before May 1st.  Next week or so is going to be very interesting since we’ll be seeing both the numbers drop from the 10 cent listing promo as well as rise from what I expect to be a big promotion in effort to further jack up the listings count.

NYT: EBay Chief Says Change Isn’t Over

I came across this New York Times article on eBay this morning and it seemed like the usual boring eBay business analysis story piece until I tripped over this nugget of information. This is the second to last paragraph on that article:

Mr. Donahoe outlined some more coming changes to the site. In Australia, the company is testing a program that requires sellers to accept only PayPal payments. Mr. Donahoe said that if the test was successful, the company would introduce it in other countries “in months, not years.” Mr. Donahoe said the intent was to cut down on fraud on the site, but critics say the change will entitle eBay to a double helping of fees on each transaction.

He actually gone on the record saying that eBay plans to make PayPal be the only accepted payment for eBay in more countries. The new PayPal only policy in Australia was a test to see if it would be “successful” enough to do the same for other countries. You can pretty much guess how he defines what successful means. Call me cynical but I doubt his definition of success includes sellers’ bottom line. If you thought that eBay can’t possibly get any worse than it already is, then you’d be wrong. It can.

Two Weeks Away

Planned May 1st boycott is just two weeks away and here are some things you should keep in mind.  Obviously you don’t want to have anything listed starting May 1st but that means you have to stop listing much earlier than that.  The very last day you can post your seven day listing is 23rd.  The last day you can post a five day listing is the 25th.  Essentially you have about a week left to get ready for the May 1st boycott.

I know it’s not easy coming to grips that you may actually be done with selling on eBay in two weeks.  It seems like majority of boycott supporters are still holding out hopes that eBay will come to their senses and retract all changes in the recent past.  There is still a good chance eBay will not budge and that means this boycott will become a permanent end to shopping on eBay for all of us.  I know it is not easy to change your daily habits but I think we’ve come to a point when we know at the bottom of our hearts that this is what must be done.

Value Pack eBay Promotion

It’s another day and here is yet another eBay promotion. This one is titled “Get Value Pack for just 25 cents”. It is a value pack of three upgrades, Gallery Plus, Subtitle and Listing Designer, rolled into one. It would normally cost 65 cents but between April 15th through 17th, it will cost you 25 cents.

There isn’t much to say about this since I just don’t see how this can have much affect on boosting the listing count for eBay. Is this a desperate attempt to scrape few quarters from couple desperate sellers trying very hard to hold onto some hopes of revived sales? I just don’t see how this three day promotion can somehow revive the sluggish sales numbers widely reported on eBay. Most sellers don’t see this as eBay doing something nice for the struggling sellers. They see this as a ploy with an unknown agenda behind it. Sadly it’s impossible not to be cynical when it comes to eBay. Quite frankly I’m scratching my head on this one because I just don’t see the reasoning behind this one.

eBay Australia Pushback

It looks like eBay Australia may not force sellers to accept PayPal as the only payment method. It appears Australian Competition and Consumer Commission will be investigating the pending policy change by eBay Australia. ACCC is basically Australian counterpart of United States’ Federal Trade Commission. According to this article, ACCC will review the changes and weigh whether the changes will have more benefits than the obvious downside for buyers and sellers.

I just had a chat with a friend in Australia and he tells me couple surprising facts. It turns out most of the transactions are done with direct deposit. Close second is a credit card transaction. Distant third would is PayPal. It appears eBay Australia is trying to make PayPal more “popular” by forcing it down buyers and seller’s throat. This sort of thing will not sit well with Australians.