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EBay Changing Business Model to be like....Amazon. They're toast.

Discussion in 'Other Off Topic Forum' started by REMIX, Aug 20, 2008.

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  1. REMIX

    REMIX Two Time F1 World Champ

    May 25, 2005
    21,133
    Jacksonville & Sarasota
    #1 REMIX, Aug 20, 2008
    Unbelievable. They've managed to piss sooooo many people off over the years. They need to eat a lot more crow IMO. Anyone else think this is the last nail for eBay?

    http://www.businessweek.com/technology/content/aug2008/tc20080819_436378.htm?chan=top+news_top+news+index_top+story

    EBay: Amazon-ification Takes Hold
    The online auction giant, hoping to boost inventory and revive growth, will imitate Amazon and court users who sell at fixed prices

    by Catherine Holahan
    Technology

    The Amazon effect is getting deeper at eBay. The e-commerce giant that built its business around online auctions is stepping up an overhaul aimed at getting more users to sell items at fixed costs. On Aug. 20, eBay (EBAY) will announce plans to slash the upfront fees it charges to list sale items by as much as 75%, while increasing its final sales commission.

    The goal is to make it easier to list items for a set, "buy-it-now" price on eBay. That, in turn, would increase the inventory of items for sale and—eBay hopes—attract more buyers seeking the Web's limitless selection and the convenience of one-click shopping. "We think that this is the biggest, most fundamental change we have made," says Lorrie Norrington, president of eBay's global marketplaces business.
    Lower Up-Front Fees

    What the change will also do is make eBay look a lot more like Amazon (AMZN), whose emphasis on fixed-price sales has surged in popularity as the more auction-oriented business on eBay declined (BusinessWeek.com, 7/17/08). Amazon doesn't charge sellers a cent to list items, and instead charges a commission on sales. EBay, on the other hand, has traditionally made as much as 60% of its shopping revenue from upfront fees—levied regardless of whether an item sells. The structure encouraged more sellers to list items for auctions, which at least guarantee a sale, than for fixed prices.

    But eBay was slow to revamp its fees even as online shoppers shunned auctions in favor of fixed-price arrangements. "From 2000 to the end of 2007, eBay kind of fought the trends—they tried to keep auctions the focus of the company," says Scot Wingo, CEO of e-commerce software company ChannelAdvisor, which advises thousands of eBay sellers. "And buyers voted with their wallets."

    Under the new fee structure, eBay will charge just 35¢ to list an item for sale on its site, but will raise the fees it charges when an item sells. It will also charge sellers who have multiples of the same item just once to list all of their identical inventory. The result is that eBay will earn 80% of its revenue from sales commissions and just 20% from fees to list items—and, eBay hopes, inventory for sale will surge. "We believe by making the fees more success-based, buyers will have more choice, better values, and that sellers will sell more," says Norrington.
    Recent Moves Offered Hints

    The move to a sales-driven price structure is one that eBay fought for years. Many sellers had long complained that eBay's upfront costs were too high. Those complaints grew louder over the years as buyers appeared to become less enamored with the site, resulting in more sellers with unsold merchandise that they had paid to list on the site. But eBay always insisted it needed to keep the upfront costs high as a deterrent to bad sellers flooding the site with fraudulent or junky merchandise. EBay executives also maintained that gaining access to eBay's community of buyers was worth the high up-front costs.

    The company has presaged the price-structure overhaul in the past year with moves that have rankled some sellers who favor the old system. It instituted a ratings system that makes it easier for buyers to leave bad reviews without fear that the seller will flag them as a problem shopper—a move that helps identify risky sellers on the site. Meanwhile, eBay added a search system that de-emphasizes sellers with bad ratings, making it less likely that buyers will see their merchandise even if it's on the site. EBay has also pledged that its online system, PayPal, will refund money from fraudulent transactions, helping give buyers extra assurances that items are legitimate despite the lower barrier to entry for sellers. "We wanted to make sure that the trust factors were in place," Norrington says.

    EBay's move to court more fixed-price sellers is likely to be just as controversial as its prior changes. Auction sellers have argued that eBay is favoring fixed-price goods to their detriment (BusinessWeek.com, 6/3/08), neglecting the business that made eBay the e-commerce giant it is today. EBay executives have countered, saying that eBay will always have auctions, though it has to give buyers the ability to shop the way they want. Increasingly, that means giving them the convenience of buying something for a set price (BusinessWeek, 6/19/08)—that is, ideally, priced-to-sell. "The vocal minority is going to be exceedingly vocal about this," Wingo says. "I think it is a great step…and for the fixed-price sellers it is a big step."

    Holahan is a writer for BusinessWeek.com in New York.
     
  2. JAM1

    JAM1 F1 Veteran
    Rossa Subscribed

    Oct 22, 2004
    8,674
    FL, NY, and MA
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    Joe
    #2 JAM1, Aug 20, 2008
    Ebay never properly addressed the fraud issues and nonpaying bidder problems, and I believe they have been reeling from the fallout of that for quite a while now. They continue to leave key issues unchecked, and since they have seen declines in users their motto seems to have become something along the lines of 'just keep hiking rates to cover our shortfall and put out gimmicks every few months to make the site seem new and fresh'. The latest lunacy of removing the ability of sellers to leave feedback is just one more step in many, that will eventually lead to their demise. This progressive switch to the Amazon model and a continued choice to ignore the faults that have been with the company from the beginning, underscores the need/opportunity for Google to come in and do a proper p2p auction site.
     
  3. Lee in Texas

    Lee in Texas Formula Junior

    Oct 21, 2006
    685
    near Austin, TX
    Full Name:
    Lee
    #3 Lee in Texas, Aug 20, 2008
    I think the biggest, most fundamental change they could make would be a better solution to the problem of sellers leaving retaliatory negative feedback. My only negatives were from from 2 incompetent booksellers who earned their negatives. I know that many buyers were pissed about the same thing. Ebay's solution? Sellers can't leave a negative. Well gee, now buyers can hold seller's feedback hostage. My buying dropped WAY off after the second negative feedback. More Buy It Now? I know of one item that has been on there for at least a year. Another has been up for 3 years. Just because it's a set price doesn't mean anyone will pay that price. Stupid.
     
  4. REMIX

    REMIX Two Time F1 World Champ

    May 25, 2005
    21,133
    Jacksonville & Sarasota
    #4 REMIX, Aug 20, 2008
    I generally agree. I tried to buy a vintage drum machine on there a few weeks back, tried to bid - and was outbid the second I submitted my bid. I did this four or five times before I said "screw it". Is that something new? It was annoying. Haven't been back since. People should get off their ass and bid. It's really deceptive.

    The mandatory Paypal thing is also silly IMO.

    RMX
     
  5. BMW.SauberF1Team

    BMW.SauberF1Team F1 World Champ

    Dec 4, 2004
    14,438
    FL
    #5 BMW.SauberF1Team, Aug 20, 2008
    I didn't like how a seller would give negative feedback simply because I would. I paid for the product literally minutes after bidding ended and held up my end, yet I get a negative? I literally gave a seller a positive for a product that was faulty (broken piece, but I'm not anal so I glued it on my own) just so that I wouldn't receive a negative in return. Thankfully some sellers gave me a positive right after I paid well before the product arrived. I think the feedback system should tap into PayPal and if the buyer paid, the seller can only leave positive feedback.

    Regardless, I don't use Ebay much anymore because they don't have what I want. Neither does Amazon for that matter (F1 related stuff).
     
  6. Horsefly

    Horsefly F1 Veteran

    May 14, 2002
    6,929
    #6 Horsefly, Aug 20, 2008
    E-bay is the ultimate flea market. However,....nearly every type of collectible has a fan base with numerous web sites and bulletin boards where items can be listed for sale whether it happens to be an antique claw hammer or a car tire. Why waste time with E-bay when you can just go to the necessary web site and list your items for a fair price? I could unload a garage full of antique car parts or vintage radios within a few days just by posting them on a few websites.

    How ironic that the internet itself will be the downfall of E-bay.
     
  7. Wade

    Wade Three Time F1 World Champ
    Owner

    Mar 31, 2006
    32,793
    East Central, FL
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    Wade O.
    #7 Wade, Aug 20, 2008
    It's called automated bid sniping software, or "sniping" for short. There are plenty of variants available. I hate them too

    http://en.wikipedia.org/wiki/Auction_sniping
     
  8. 285ferrari

    285ferrari Two Time F1 World Champ
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    Sep 11, 2004
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    Robbie
    #8 285ferrari, Aug 20, 2008
    Sellers can't leave negative feedback any longer if you the buyer have paid promptly...
     
  9. Erich

    Erich Formula 3

    Sep 9, 2003
    1,190
    Poway CA
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    Erich Coiner
    #9 Erich, Aug 20, 2008
    Its called a proxy bid and it is as old as ebay.

    Lets say the current bid is $20 and the minimum bid increment is $2.

    Say I decide the item is worth a max of $50, So I place a bid of $50.

    What shows up is me as high bidder with a bid of $22. If nobody else bids, I get the item for 22.

    If somebody bids 26 the system will automatically up my bid to 28 and out bid you. This will continue until somebody

    bids more than $50.

    Sniping is a computer program that drops a bid into the system in the last few seconds of the auction. Very tough to defeat unless you are using a program also.
     
  10. 285ferrari

    285ferrari Two Time F1 World Champ
    Sponsor

    Sep 11, 2004
    20,958
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    #10 285ferrari, Aug 20, 2008
    One way to force Paypal and there ridiculous fees on everyone--from Ebay

    Checks and money orders no longer allowed: Beginning in late October, we will no long allow checks or money orders as payment methods on eBay. Only approved electronic methods will be allowed. In January 2009, all accepted payment methods will be integrated into eBay Checkout. For buyers, this change means a more consistent and secure payment experience. For sellers, it means faster payment and fewer unpaid items. (Note this policy will not apply to Vehicles and some categories in Real Estate, Mature Audiences, and Business & Industrial). See FAQs for more details.
     
  11. icanfly012

    icanfly012 Karting

    Nov 29, 2006
    162
    #11 icanfly012, Aug 21, 2008
    Use Gixen for "sniping", it is free.

    Ebay will do well in the long run. They have made lots of investments in foreign companies that will be a significant ROI. Amazon is great, but I feel like they will slip in the next 12 months. While eBay is shifting to a "Amazon like" website, it seems Amazon will shift towards possibly making their own products. The Kindle was already a huge success and they could strategically create their own lines for most products. Also, Amazon's payment system is excellent as well (trying to be copied by Etsy). Amazon doesn't really invest as much as eBay in other companies. Although Jeff Bezos (founder of Amazon) is a very active investor, most of his investments are through his personal fund, not through Amazon.

    I see eBay doing well after some management changes. Both websites can coexist and be profitable; they cater to different markets.
     
  12. Far Out

    Far Out F1 Veteran

    Feb 18, 2007
    9,768
    Stuttgart, Germany
    Full Name:
    Florian
    #12 Far Out, Aug 21, 2008
    Ebay really has become a giant junk market. I wonder how long it takes until someone sets up a new platform that brings back the original flea market feeling to Ebay, auctions only, private sellers only...
     
  13. UroTrash

    UroTrash Four Time F1 World Champ
    Consultant Owner

    Jan 20, 2004
    40,486
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    Clifford Gunboat
    #13 UroTrash, Aug 21, 2008
  14. PeterS

    PeterS Five Time F1 World Champ
    Silver Subscribed

    Jan 24, 2003
    52,137
    Goodyear, AZ
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    #14 PeterS, Aug 21, 2008
    I had a buyer that left negative feedback because my product he purchased did not work in his application (and I told him in an email that he may have compatability issues - crystals for a radio - and offered him a full refund). I brought the scenario to eBays attention and they had no interest to erase the ding. I left negative feedback for him and ebay sent me one of their nasty-grams stating it is against the rules to leave any negative comments in the positive feedback area (which is the only option!). I HATE ebay!
     
  15. bryanc4

    bryanc4 Formula Junior

    May 22, 2008
    594
    Delray/Boca, FL
    Full Name:
    Bryan
    #15 bryanc4, Aug 21, 2008
    paypal and ebay are both scandelous entities thriving on the 'monopoly' they created... their fees are outrageous and their customer service is unfair and biased to the buyer regardless of justice.

    a friend sold a car 'as-is' and stated the car needed some work.. buyer receives car and is unhappy so files a claim with both ebay and paypal... paypal froze funds for 6 weeks.. ebay put the account on hold.

    would love to see them BOTh out of business!
     

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