Study: EBay Needs to Return to Its Roots
Over the last year, eBay has been trying to slowly move users away from its auctions and more towards purchases of fixed-priced items. Last week, however, eBay announced that it plans to return to its roots and that the company wants to put more emphasis on its auctions business again. Judging from the latest data from Compete, eBay's former strategy was clearly not working and was actually driving users away from eBay and toward other fixed-price retailers like Amazon and Walmart.
According to Compete, the percentage of eBay shoppers who also shopped at Amazon increased from 41% in February 2008 to 53% in February 2009. At the same time, however, the number of Amazon users who also shopped at eBay remained stable at 58%, which, according to Compete, shows that eBay's fixed-price strategy did nothing to attract new buyers.
These problems were only compounded during the last year, as eBay also lost a lot of its casual sellers to Craigslist (which saw its traffic rise 40% over the past year).
As Compete's Matt Pace rightly points out, eBay's strategy of emphasizing fixed-price transactions only muddled the waters and blurred eBay's distinction from other online retailers, including eBay's own shopping.com. Also, users clearly prefer to buy from a trusted source like Amazon, and the average order value on eBay has remained stable at around $28 for the last year.
That doesn't mean that eBay's focus on "Buy-It-Now" transactions was a total failure, though. The number of these transactions grew steadily over the last year (up 20% from last year), but this was not enough to make up for the simultaneous decline in eBay's auction business. According to Compete, 1.5 million fewer users actually placed bids on eBay in February 2009 than a year ago.
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As much as I hate to say it... you need to re-read the article from eBay. They mention nothing about returning to their roots! In fact, just the opposite, stating:
"The company's eBay Marketplaces business is expected to achieve revenues of $5 billion to $7 billion, in 2011, with a continued shift toward more fixed price sales, a smaller online auction business, and more growth in other ecommerce formats such as classifieds and advertising."
They go on to say that they will focus on what they feel are untapped markets like liquidations, closeouts, and secondary markets.
You all are usually spot on... don't how you missed this one!
Mark
I left eBay several years ago. It's become too expensive and useless. I've moved on to using Craigslist and Amazon for selling things. I really wish there was still a decent auction site out there and I see a gap in the market, waiting to be filled. Google, I'm looking at you.
I left eBay several years ago. It's become too expensive and useless. I've moved on to using Craigslist and Amazon for selling things. I really wish there was still a decent auction site out there and I see a gap in the market, waiting to be filled. Google, I'm looking at you.
I guess the new model is alright for online businesses and entrepreneurs, but for the large amount of users looking to clear out the house there are just too many alternatives. I haven't used eBay in a while, but I remember liking the idea of auctioning off my items as opposed to selling them at a set price - opportunity to make a bit more. I think the larger problem is the percentage they take from users trying to sell their items, driving them to classifieds sites. If the sellers aren't on eBay the buyers will flock elsewhere as well.
http://ilist.com
I think ebay cannot return to it's roots, they lost a lot of valuable seller/buyers because of their high fees and it will be too costly for them to go back to their primary idea which is helping community.
Nat
http://www.loopcity.com/
ya gotta wonder where ebay is headed - a 5p insertion fee! whoopee! More encouragement to a ton 'o tat clogging the innards. Add this to Ebay's active discouragement of sellers of anything of value and ebay really does become more and more a junk store. Too bad, EBAY had a kick at being the world's auction house, but they seem to have lost it. As a long time seller I no longer risk selling anything valuable - the buyers have total control and can get a refund and keep the item. Really! OK for little things but not anything good. The high disposable income "eyeballs" are largely gone, as ebay, I think, didn't understand its demographic, and that a lot of those despised and actively discouraged small sellers were in real life pretty well off - EBAY is in the process of throwing away an "audience" that other sites would love to have had - but once the interesting items are gone - so goes the traffic.
There was indeed a lot of discontent on Ebay especially where the sellers were concerned with the increasing amount of bad changes and the increasing insertion fees. I don't know if it's too late for Ebay or not with all of the other auction sites trying to deliver death by a thousand cuts. I know plenty of former Ebay sellers that are never coming back.
Some of the changes were just plain boneheaded, this move away from their core business being one of them. Why on earth would you want to move away from the one thing that you're known for only to become yet another fixed price marketplace? Not bright at all.
mayeb they'd listen if you typed eBay correctly.
Hi Anon
Maybe I'd worry if you'd spelled "Maybe" correctly. LOL
They go on to say that they will focus on what they feel are untapped markets like liquidations, closeouts, and secondary markets.
I'd LOVE a return to the basics! But somehow I just don't see that happening with today's economy.
I think ebay should stick to auctions. That is their whole raison d'etre.
And especially now in the recession with people looking for bargains, an auction will at least "appear" to be the greater bargain.
I do think the process of selling is way too complicated and a big barrier to recessionary growth. I tried selling something on there the other day and the pricing structure was too confusing so I aborted it. Paradoxically, the second hand product I am trying to sell is much easier to do on Amazon, a traditionally fixed price site!
Chris
http://www.ProductCreationGlory.com
Pretty funny actually. Where in the marketing texts does it say, "Take successful business model and totally change it"? Only Tiger Woods gets away with things like that. Shame on eBay. You are what you are. If you don't like it go buy someone who does what you want to do and sell eBay to someone who appreciates the users.
Wake up and Smell the Coffee!
It's kind of funny because I've just read an article on how a guy became milionare selling om eBay:
http://money.uk.msn.com/consumer/article.aspx?cp-documentid=15167325
I won't bid, buy or sell again on eBay until eBay reinstates fair seller feedback and stops giving buyers the right to rate sellers unfairly. I didn't know the following until just a few days ago, but if a buyer gives seller a bad rating for not receiving an item fast enough in the mind of the buyer (even though said delay is the fault of the USPS) and extra fee is added to the seller's Final Value Fee for the item. Buyers, of course don't always tell the truth. The more eBay has taken the side of the buyer the more buyers have become abusive to sellers.
I also discovered that eBay compromises seller's insert fees by giving potential bidders/buyers other options to buy a similar item cheaper. The list of eBay abuses is long and I wish SOMEBODY would challenge them in court.
Lastly, like many people, I dislike Paypal with a passion. eBay has spent the last six years bad-mouthing payment via personal checks and money orders as unsafe. It forced a Paypal only policy in Australia and didn't succeed. Now they're forcing buyers to use Paypal only. That's more extra fees for the sellers... and Paypal is also known of late to with-hold paying sellers based on claims of disgruntled buyers.
eBay has a long way to return to honesty and fair play . . . but I doubt they will.
eBay is just bad news for sellers and buyers. Too much of a hassle. Nobody wants to be placed on the defensive as a matter of course.
Good post ... I guess they are seeing success in their kijiji & gumtree sites so think they will turn eBay this way. I think they need to start treating customers like customers!
Too many eBay stores. Harder to find items from individual people. The 'stores' are no cheaper than other online giants. All those dell computers on eBay? They used to be a good deal. May as well pick them up at your local Walmart now. eBay no longer stands out as a place to shop.