ebay is failing, ebay going down, ebay falling apart……
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Ebay shares are down 15% today which I think is indicative of a steady decline in the overall Ebay experience.
The market is smart: analysts at Merrill Lynch and Goldman Sachs cut eBay to “Neutral” from “Buy,” while Lehman and Jefferies both lowered their price target.
Why eBay is Falling Apart at the Seams…
The internet has changed. In the late 90’s and early 00’s, the internet was still relatively new and there was a large degree of novelty. It’s good to understand the two demographics that sell on eBay: (1) legitimate businesses looking for a new avenue of sales, and (2) people attempting to sell their own out-of-favor items.
Ebay hasn’t managed either category well.
The business aspect of selling on eBay has simply become more expensive. Plus, as it’s grown, it is harder and harder to reach the exact right demographic. The web is moving toward smaller and smaller niche markets. Ebay also has trouble resolving conflicts. By now, most serious users have had a bad transaction and it has soured them on the experience somewhat.
As for the large number of people who used it to clear out their garage: they still use it, but they’re aware of other, cheaper alternatives as well - such as Craigslist. Early on, People flocked to eBay just to prove they “got it” and used it in place of traditional avenues - garage sales, donations and trash dumps…
Simply put, eBay is failing to respond to the changing face of the internet.
Ebay is Not Creatively managing their Business.
Okay, so you’re in charge of eBay - what do you do? Revenue is decreasing, you’re getting tons of bad press and the overall experience is suffering. The current answer: “Let’s raise prices!”
Here’s a quote from the stock’s message board:
I am a seller who has pulled back 75% of our sales and have told our account rep it would remain that way until the changed back. MANY SELLERS have pulled back or closed shop all together. Still time to short this as IT WILL go to $20 or less in my opinion.
Go to eBay and click on COMMUNITY and then NEWS. The go to JULY 10th and click on the Line “A Message from Lorrie Norrington: Updates on Feedback”
Two QUOTES from that News Release: (1) When we get something wrong, we want to make it right & (2) Finally, we’re working to resolve other important issues that eBay sellers have raised over the past several months.
Wise Man Say, “Losing customers not good way to make money.”
2 Comments on this post
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Jason Kent said:
The observations expressed above are right on the mark. The feedback honor system eBay was built on: a “thanks for a thanks”, or “an eye for an eye” (as odd as that sounds), has taken a major downward turn for its Seller based users. No longer is there a ‘fairness’ within the playing field. Ebay’s policy (as well as the sister company, PayPal) is being re-written to protect the buyer, not the Seller. Don’t forget, the Sellers are the paying customer. Ebay and PayPal takes its fees from the Seller, not the buyer. There is no longer a sense of loyalty towards its paying customer, from either company.
This new feedback practice seriously undermines its credo, and has been crippling the company since it’s adoption in June of 2008. Apparently, my concerns have yielded me a spot on Ebay’s discriminatory ‘hotline’ telephone caller list. Yes, I can call and talk to a real person, but I had to be “invited”– they will only take my call based on a note attached to my account. Here’s the number, give it a try — you’ll get nowhere: 1.800.717.3229 Sorry fellow sellers…you’re stuck with the corporate email run-around, or the limited scope of “Live Help.”
Second, and most importantly, PayPal and Ebay dispute resolutions have created a series of loopholes whereas Buyer fraud has become rampant. Just yesterday, I received a email threat from a man named D. Marcus, of California asking for me to compensate him 50 percent of the winning bid due to a ’scratch’ he saw on his purchase, or as he put, he’ll leave negative feedback to my account.
His threat of negative is worth whatever he can squeeze out of the other party. Under eBay’s new policy, the Seller can no longer leave the Buyer negative feedback, thus making Sellers– ones naturally concerned with their eBay image, easy prey as they get caught up in the hype that they must keep their rating as close to perfect (100% rating) as humanly possible. People like Marcus can, at any whim, discredit the reputations of a Seller. Personally, I said ‘go scratch’ to Marcus and received the negative feedback. Oh well.
So, Marcus takes his next step (the feedback threat did not work) and files a PayPal claim (for which PayPal favors the Buyer 88.6 percent of the time). So basically, a plan to extort turns into a red-tape ‘dispute’ affair which costs more in the long run. In the dispute, Marcus requests a partial refund from me– it seems Marcus wont give up. A $25 refund on a $50 sale.
How to solve the problem for the Sellers? (And the problem is not Marcus, it is PayPal and Ebay– ironically, their corporate policy, and its loopholes, promotes fraud.) Simply put, quit using Paypal. Go back to check, USPS MO, and smail mail. You’ll eliminate the liability of having to deal with the growing trend of Buyer Fraud, while saving hours of time in producing the correspondence necessary to complete the dispute.
It will give YOU full control over your business practice, too. Don’t forget (or if you did not know), as a PayPal subscriber, you make the agreement that the terms specified in your eBay listing take second seat to PayPal’s dispute policy. Yes, this means that if you state “as is” for secondary market items, then think again. PayPal doesn’t agree, and will, within their dispute process, override this, and other policies which are stated in your auction text. I was mostly shocked when the PayPal representative stated to me that they side with the buyer knowing that I’ll receive back the item and can ‘resell’ it again– the rep. said “there’s no ‘real’ loss on your [my] part”. Ok, what about the shipping monies lost, and the time, fees, etc. If you push hard enough, PayPal will split the cost of the initial charge of shipping– they did for me, after I informed them that I wished to close my account.
All in all, eBay, and eBay’s joint venture with PayPal is failing fast.
Head’s up for those of you who rely on eBay for your primary income: Be sure to leave yourself an out…never be fully dependant on eBay. Look to other venues.
July 19th, 2008 at 2:29 am -
scott said:
Ah - you bring such a good point with the “Marcus” story. There is now an entire subculture preying on sellers with good feedback. It’s no secret that having near perfect feedback is very important. It’s easy for unscrupulous people to buy at a higher price knowing they will chisel away the price after the fact via the threat of negative feedback. Unfortunately, there is nothing the sellers can do to combat this problem.
July 21st, 2008 at 1:09 am
