posted on December 24, 2008 08:53:01 AM new
Wall Street Journal Dec 23
A Not-So-Jolly Season for eBay Auction Site Makes Tweaks to Reverse Slide in Visitors, but Not All Are Pleased
By CHRISTOPHER LAWTON
For eBay Inc., this Christmas isn't turning out to be so merry.
In its first holiday season under new Chief Executive John Donahoe, eBay is suffering a slide in visitor traffic and deteriorating sales. Customers are leaving for fixed-priced sites where eBay has less of an edge, and because of continued problems with unscrupulous sellers.
Weekly traffic to the auction site fell 16% between Nov. 3 and Dec. 14 from a year ago, according to research firm comScore Inc. In contrast, Amazon.com had 6% more unique visitors during the same period.
The weakness is showing up in the sales of eBay sellers such as Gary Meyer. Mr. Meyer owns Gem Enterprises Inc. in Merchantville, N.J., which lists more than $300,000 in tech equipment such as printers on eBay. So far this holiday season, Mr. Meyer's sales on eBay are down 30% to 40% from a year ago, he says. "We've geared up our Web site more and started listing on Amazon.com and other venues," Mr. Meyer says.
Lorrie Norrington, president of eBay Marketplaces, declined to comment on eBay's holiday sales. She noted eBay was the most visited Web site on the Monday after Thanksgiving -- a popular online shopping day -- with a 45% increase in unique visitors, according to comScore.
"We are still three times the volume of the competition and driving hard to make aggressive deals in a tough environment," she says.
EBay performance this quarter could be a referendum on the changes Mr. Donahoe has made this year. Since taking over for former CEO Meg Whitman in March, Mr. Donahoe has sought to rev up growth and reclaim buyers who had stopped visiting the Web site.
His most significant move has been to make eBay less of an auction house and more like Amazon, Walmart.com and Sears.com, selling fixed-priced goods, which consumers now prefer for speed and convenience. Among other changes, Mr. Donahoe has cut the fee to list fixed-price items on eBay and boosted the fee charged when an item sells, a model that helps fixed-price sellers better set profits.
Yet the changes have so far had little financial impact -- and have angered many loyalists. Transaction revenue per listing between October and the end of November plunged 28% from a year ago to $1.44, according to Majestic Research. Wall Street analysts now estimate the San Jose, Calif., company will post its first year-over-year revenue decline when it reports fourth quarter earnings next month. Seattle-based Amazon has forecast an at least 6% increase in fourth quarter revenue over last year.
"We haven't observed...any material positive changes on the buyers' side of the equation," at eBay, says John Aiken, managing director with Majestic Research.
Some long-time sellers say eBay's new fee structure has increased their costs and made unfair ratings more difficult to resolve. Under rules implemented by Mr. Donahoe, when buyers leave negative feedback, seller ratings are lowered and their future listings are pushed lower in eBay's search results.
The move to fixed prices has made its Web site confusing for buyers who have to navigate combined auction and fixed-price listings, say analysts and sellers. In September, eBay rolled out new search algorithms that mingle auction-search results with fixed-price results.
The technology changes have received poor reviews from sellers such as Debbie Imlay, a seller of women's lingerie on eBay. Ms. Imlay says many of Mr. Donahoe's revisions have made the site confusing to surf, turning off shoppers. "They are making it too difficult," says the Chatsworth, Calif., merchant.
Ms. Imlay, who sells over $3,000 a month in lingerie on eBay, says the site is moving to fixed-price sales too quickly at the expense of auctions. She says her customers want to purchase items for the lowest price and auctions are still the best way to get bargains. By staying with auctions, Ms. Imlay says she pays 15% more fees to eBay than she did before Mr. Donahoe's fee changes. Overall, she says her holiday traffic and sales on the site are down 10% from a year ago.
Ms. Norrington says "search is always a journey" but that eBay's search changes are intended to help consumers. She adds that eBay has "the right long-term strategy."
Some sellers do like Mr. Donahoe's changes. Jack Sheng, chief executive of Eforcity Corp., which sells electronic-accessories, says Mr. Donahoe understands the problems sellers are facing and has made the appropriate changes. Mr. Sheng forecasts Eforcity's holiday sales on eBay will be up around 10% over last year.
Mr. Donahoe has also attracted some large online merchants such as Buy.com and SmartBargains.com by working closely with them on volume discounts and giving them extra support.
One large auction-based seller, B&H Factory Outlet Inc., is now experimenting with fixed-price sales. The discount apparel company generates $800,000 a month in sales on eBay and plans to add up to 5,000 fixed-priced items to its eBay store next month. It will also offer free shipping on those items, something it doesn't do with auctions.
"We want to test both markets," says Stacie Sefton, B&H's CEO. Traffic to B&H's eBay store is up 25% this holiday season over last year, she says. B&H's average sale on the site is down 29%, which she attributed to the economy.
Of course, this holiday season has been particularly difficult because of the economic downturn. In response, eBay has offered a record number of holiday promotions, including $1 doorbusters for items such as toys and sporting goods.
Last month, eBay also teamed up with Microsoft Corp. to offer shoppers up to 30% off purchases of select fixed-price items when they land on eBay through Microsoft's search Web site. The promotion ended Dec. 17.
But such changes haven't been enough to lure back buyers including David Anderson of Bakersfield, Calif. The 28-year-old said the few times he tried to buy photography gear on the site he has been outbid in the final minutes of an auction. "It's just frustrating," he says.
Mr. Anderson says he hasn't shopped on eBay since February, preferring a more traditional online buying experience. "It was fun 10 years ago, but now I want to get my product and go," he says.
posted on December 24, 2008 11:35:32 AM new
"Some long-time sellers say eBay's new fee structure has increased their costs and made unfair ratings more difficult to resolve. Under rules implemented by Mr. Donahoe, when buyers leave negative feedback, seller ratings are lowered and their future listings are pushed lower in eBay's search results."
Excellent article but it still doesn't tell the full story and the paragraph above is erroneous in that it mentions Negatives and nothing about the DSR's. There is also no mention of Sellers not being able to leave anything but a postitive feedback.
Someone needs to talk to Christopher Lawton and set him really straight from the 'AVERAGE' Seller's point of view. The average seller makes up the largest part of eBay's Selling Community.
posted on December 24, 2008 02:26:04 PM new
So many holes in this poorly written article.
1) "Customers are leaving for fixed-priced sites where eBay has less of an edge, and because of continued problems with unscrupulous sellers."
- Customers are leaving because Sellers have already left. Sellers are taking the less generic stuff and selling it on their own b/c they can get more money for it and not have so many restrictions placed on them.
2) "Lorrie Norrington, president of eBay Marketplaces, declined to comment on eBay's holiday sales. She noted eBay was the most visited Web site on the Monday after Thanksgiving -- a popular online shopping day -- with a 45% increase in unique visitors, according to comScore."
- Most visited doesn't translate to the most sales... or even close to that. you can make any statistic look good if you word it right.
3) "We haven't observed...any material positive changes on the buyers' side of the equation,' at eBay, says John Aiken, managing director with Majestic Research."
- Buyers can only get positive feedback. Buyers can screw over sellers without getting negative feedback. Buyers don't have to pay for BIDDING on auctions they don't pay for. Buyers get extra protection from Paypal, Buyers have more ways to scam sellers without the fear of getting kicked off... and so on.
posted on December 24, 2008 02:50:28 PM new
On a personal level, I am now only a buyer on eBay. I may go back to selling but I am thinking I may not. My recent buying experience has been very good but I fear it is because eBay is not doing as well. I buy only in a few very specific areas but in the last year the things I collect have spiraled out of my price range and I did not win many auctions. We have a large collection already so this may be for the best. However, in the last two weeks I have won three of the four auctions I bid on. Perhaps it is a combination of eBay changes and the weak economy. If my "luck" hold out I may get myself in trouble.
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“The illiterate of the future will be the person ignorant of the use of the camera as well as of the pen.”
Maholy-Nagy, Vision in Motion, 1947
posted on December 24, 2008 07:31:53 PM new
i've had 3 buyers in the last 3 weeks ask if they could send a money order.
2 money orders never came. the first bidder never followed up with me and i filed for FVF yesterday after waiting 2-1/2 weeks. the second bidder claimed he mailed it over a week ago and that never arrived either. i emailed them and their story started changing from i sent a money order to i am having problems with paypal. finally, after i opened the dispute they paid for it via paypal.
the third person used buy it now today. they asked to send a money order, but ended up using paypal after i told them i preferred paypal (i got frustrated with the previous two deadbeats).
i like no fees for money orders and the fact you hold the keys to the car if a problem arises... but if nobody is sending money orders after promising to do so, then why even bother. it is probably some stooges for paypal causing the problem to get sellers to prefer paypal rather than bash it. lol.
