posted on July 4, 2001 03:57:53 AM new
powerg1 writes: That's how Paypal did it and we all know how that worked out.
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Yes, they suckered folks in with those offers and continually disappointed as they lowered incentives & raised fees, resulting in a "non-trusting" and "hostile" userbase.
What PayPal did and the way they did it could be used as a great case for how NOT to operate for "long term success".
[ edited by ebaypowersellergold on Jul 4, 2001 03:58 AM ]
Perhaps you're asking us to forgive your naivete about the business world because I can't see how you can criticise eSeller for bringing up very valid points that companies like Dell have a better business model than IBM, Amazon has a better site than Walmart, Juniper kicks Cisco's butt and so forth. What exactly was the basis for your criticism again? I agree 100% with eSeller.
posted on July 4, 2001 08:48:38 AM new
Online auctions are not a fad. Are people going to back the old days of bringing their items to the collectible shop to get 50% of what they'd get on ebay? Back to garage sales getting a nickel for a magazine that fetches $25 on ebay? Ebay has eliminated the need for putting expensive, and generally unsuccessful classified ads in the newspaper.
posted on July 4, 2001 03:31:59 PM new
quickdraw writes: "Online auctions are not a fad... Ebay has eliminated the need for putting expensive, and generally unsuccessful classified ads in the newspaper. "
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OK... Expensive stuff like real estate? Autos? Are you saying your newspaper has eliminated their classified section in those categories? eBay has such a miniscule share of the classified business it's ridiculous to even hint that they would EVER eliminate it.
BTW, I still think on-line auctions ARE a fad. You can see the future now, because eBay is turning in to it...
Tons of junk with fewer & fewer buyers. Prices coming right down to garage sale prices. That will (a) put 1/2 the sellers out of business (who use garage sales as their source of inventory), and (b) fill the site with so much junk that only the bravest of souls will venture on to it in a year or two. The "fad" has already peaked -- auction counts down, bids down, sell through down, etc, etc.
eBay is on the road to becoming a site filled with "QVC rejects", customer returns & last year's models... (the collectibles areas are now filled with the most common items in less than desirable condition).
If you think there's a large market for that type of stuff (in a slumping economy) then maybe you're right... On-line auctions aren't a fad after all. (Again, I'm not saying they'll disappear -- I AM saying that there won't be a $15 billion company holding nothing more than on-line auctions)
posted on July 4, 2001 05:58:02 PM new
I'm not concerned with the horse and buggy crowd. The newspapers can target this group, fine with me. I would never go back to using those primitive methods, buying or selling.
"Fewer and fewer buyers." B & M stores are theoretically getting fewer buyers too as more people shop online. Personally I would do lots more shopping online if more sites were as good as Amazon or Ebay. The first place I look to buy is ebay, whether I see the item first in the mall or on an infomercial. I find things on ebay that would be hard to find in person, and the choices are better on ebay. Something this good is not a fad. Fads have very little use in person's lives. A hula hoop? Come on! Ebay is like a hula hoop? Hula Hoops you twirl around a few times, you get bored. Ebay is much more practical.
True, bids etc may be down. Maybe the conomy has something to do with that. I now I've cut my spending down until I make more money. Doesn't mean I won't come back and buy on ebay, I'm just delaying my purchases. Couldn't that e others are in the same boat?
Interesting when you open your eyes and get a bigger picture!
Will prices come down to garage sale levels? It's absurd to generalize. When I want a book on real estate investing, should I run to a garage sale and see if they have it? Or should I go to ebay and pay the going price? When I want a baseball card of Mark McGwire, should I pay the higher prices at a card shop, or run to garage sales? Or should I buy on ebay? The demand will drive the price back up. I know ebay is much more convenient than going to a garage sale. Right now you may be seeing an influx of supply on certain items. This is a normal cycle.
As for store returns and last years models, believe me people want bargains. I went to Target and bought a store return tv for half off, it worked good and I was happy. I used to go to warehouse sales for a major department store, and the crowd was huge, lines were long, buying store returns. Don't underestimate this market.
The internet as a whole is going through growing pains, and ebay is not alone. The future is like a garden, you will have weeds along with your roses. So many people have strong interest in having ebay work for them and be a success. I definetly don't want to go back to the horse and buggy days.
Up on the industry? We recieve virtually every single computer industry journal each week thats distributed in the USA from CRN (computer reseller news) to Inter@active week, Wired News, eWeek, list goes on and on. We are a technology related business reseller and so yes, we do stay abreast with whats going on out there. eBay is our smallest revenue generator by far. We sell at sites that outperform eBay 8:1 generally and some as much as 40 & 50:1.
Juniper has problems as well as ALL network related businesses as ISP's are NOT upgrading nor is BIG business. Dell's business model is superior to IBMs? Get a GRASP on things here. IBM could buy and sell Dell 5 times over. Are you speaking of PC's? If so yes, Dell has a nice market share which they are loosing more of each day due to low ticket PC's. Laptops? IBM has READ MY LIPS exclusive rights to the LCD Panel displays, 99.99% of them are produced in Taiwan and IBM has pick of the litter in them, they sell MANY MANY more laptops than Dell or for that matter just about anyone else and more so the lease programs for business are the BEST out there BY FAR. You can get a free laptop writing off all lease fee's and IBM BACKS the products up.
Amazon is better than Walmart? You must be kidding? Walmart doesnt CARE about the internet, they dont NEED TO. Their capital assets in say California alone are worth more than 3 Amazon's combined and YES they actually run a REAL profit. We do sales to walmart, they are a consignee of ours. They sell sop much more in a day than Amazon will in 3 months it'd make your head spin.
If ones talking about the "web" then thats a different story. There are VERY VERY few profitable web businesses, VERY few. eBay is one as they have ZERO liability of inventory, returns, etc. Thats WHY they are profitable.
Before TALKING READ. If your a technology oriented business reseller you can get every single industry journal and then some including Wall Street News etc. FREE. We get so many I cant muddle through all of em' in a week.
As to auctions being a fad? Well yes & no. We were at the web before the web was the web. In other words before HTML exisited. Auctions have been on the wane for years. Places such as Auction PC, Surplus Auctions, Onsale, Auction World, Auction Sales and countless others all defunked. There are only two viable auction sites left on the net in fact. I'm not talking about someone selling trinkets on the web. Volume or Big $$$ business. Thats whats kept the few sites viable alive. eBay is alienating lots of sellers by reigning in the site and doing zero about the rotten buyers and rotten sellers.
Atop that apparently nobody reads MSN news, Wired News or even AW news for that matter. Meg Whitman just spoke before a group of legislators as the fed is and has been looking at regulating online auctions. Now that Bush is the Prez. he has told both the Dept. Of Justice, The Internet Fraud Commission and the IRS to be AGGRESSIVE in going after such services and the sellers themselves. Next year gonna be LOTS of unhappy sellers who get nailed to the walls by the IRS for not paying income or state sales tax. LOADS of them in fact.
Dont be surprised to see every state out there enforce current statutes and regulations regarding auctioneer licenses. To be an auctioneer in person you MUST be licensed in most states. There are also issues of merchantability, illegal export etc. Point all being with Bush as president a shift has occurred as he is not "anti-internet" but he is PRO enforcement so expect ALOT of changes as they are coming.
As to eBay itself sales for most sellers have been on the wane and there are myriads of reasons. Too many sellers, consumer confidence etc. When the Dept. of Justice and IFCC release stats saying 64% of all reported internet fraud comes from auctions exactly WHERE do you think the lions share of that occurs? Its not uBid, its not iDeal International, its not HSN or CompUSA auctions. Additionally thats a skewed number at 64% as traditionally best case 1 in 8-10 Americans will ever pursue filing formal complaints with authorities. We know consumer confidence at eBay is at an all time premium as our customers tell us. MANY MANY of them would rather buy direct from us know than even use eBay they are so frustrated by being taken.
The lions share of what we offer in over 1,600 unique products do not get listed at eBay. We know people wont pay for the "best" of the stuff and quite frankly we can fetch a better price elsewhere, pay far less in fee's and literally NO hassles of feedback or emails or any of that stuff. Get the order, ship the order and 2-3 weeks later a big ole' fat check arrives in the mail from the sites.
My guess is eBay see's the writing on the wall and already did 2-3 years back and thats why they launched a fixed point of sale, its why eBay stores have been rolled out.
Five years ago there were literally hundreds of EXCELLENT auction sites to sell at if you were a business, now there is at best a handful.
For a site to "take on ebay" its going to take ALOT of money and I do mean ALOT. Wont happen. Even if a site were to attempt it odd's are ebay would douce them before they ever got a foothold causing them to expend even more money to try and gain a foothold.
Exactly what do you think Yahoo or Amazon auctions are? These are not revenue generators for these sites, never have been, they are tax deductions. Simple as that. While I do know Amazon's intent WAS to give eBay a run for the money after the first quarter Amazon was deployed they already knew, no way, cant do it no matter how much money/effort they dump into it. Conjecture? Ummm No. We were TOLD that as we said to them ya know if you do this and that and that and this you stand a better chance. They said we wont be doing that or this or this and that as basically we dont care, its a tax benefit.
Thats why its still running today.
Atop that for some reason eBay sellers and buyers think its the universe of buying/selling, its not. There are MANY MANY other sites as a business that can be used which outperform eBay bigtime. Just because eBay is the highest trafficed site on the net that means ZERO. All those surfers are not buyers. Probably 25% of all hits they get are the sellers looking at their auctions to see if there are bids. eBay shoppers tend to be bargain hunters. The REAL impulse buyers who keep walmart, Kmart, Sears etc afloat do NOT visit eBay. eBay buyers are a minority, in fact, a bigtime minority. The majority of buyers buy NOW not playing auctions, not waiting for them to end etc. They buy NOW and thats why ebay deployed stores. Will stores work? They could if they were properly implemented and if eBay would stop alienating the good sellers and get rid of bad buyers and sellers. Otherwise, makes no difference, they wont attract the impulse shopped.
Where we sell the lions share of goods are all technology sites, all impulse buyers and the sales make eBay look like nothing. eBay basically pays our shipping fee's for these other sites as it takes Net 30 for us to get paid by the other points of sale.
Signed: WhyNot!
Haven't I read that same post here in the past 30 days?
Keep in mind that not *everyone* is selling technology items.
There's still lots of life in the collectibles market, and Meg knows it.
She's simply making sure that there's new blood being brought on board, which should have always been a given.
posted on July 5, 2001 06:00:16 PM new
Hi Reddeer,
Well somewhat. We stay very abreast of whats going on out there and in fact just last week we recieved a call from the DOJ in washington asking to clarify some issues grey to them specifically surrounding oem software/hardware resale.
My partner in our business worked over 11 years for our states racing & wagering board as well as running for public office and being the finance chair locally for a congress critter. It works out rather well as she has the ties in that end, I have the ties in the tech industry. We used to do TONS of hardware resale as I have some direct in's at Intel and Gateway specifically. Where others for example paid $20-$40 for mainboards I was getting them, well, significantly cheaper.
Alot of sellers have problems as they deal with middle men who on avg. will bump cost of goods a minimum of 100% over their cost and usually more like 150-175% on avg.
The problem with P2P auctions has been and continues to escalate. You mentioned collectibles which for example is another interesting area. California requires for example authentication of true collectibles. While the case where eBay stated it was a venue only was upheld that sort of pressure mounting from all states in the union will force change or regulation will be coming.
Its unfortunate indeed but there are many bad sellers out there. I can show you a seller with nearly 3000 feedbacks that sells nothing but oem software which is illegit for resale. You simply wont find that stuff for sale at say buy.com or Egghead.com, barnes & noble etc. Whats happened in the end of software is quite remarkable for example.
Places such as CompUSA are having a REAL measurable hurt put on them due to illegal sales. In fact in the case of "Game publishers" most developers are now dropping the PC completely in favor of the playstations, there are many reasons but one of the largest factors are the illegit sales.
Now take a look at places such as Symantec who posted a record 22 point loss in stock in one day due to what they claim are illegal resale of OEM product. Their quarterly report caused many people to loose LOTS of stock valuation. What the "buyers" of that stuff dont realize is that THEY are responsible and can be pursued for copyright infringement and the BSA does just that. By a person registering an oem item they purchased is legal proof of basically buying stolen goods.
At the sametime whats NOT displayed is that these publishers gain a market share in those non-sales. For example, 3 years back you'd find MS Office all over the place for $50. Those MILLIONS of sales gave the company dominant market share in small office computing. Corels on the ropes now and word has it MS is looking at buying it up mainly for Corel Draw thus giving them the #1 graphics product on the market as well.
Sony inc. has pioneered some new technology now that is simply not-copyable and basically will end anyone ever owning a CDROM, DVD, Video etc. It wont be released for some years to come but will be part of Playstation 3. The PS 3 may well spell the end of home computers in fact as its much more than a console game system.
But thats all off topic. My "personal opinion" is that eBay should seperate the site. That is to say businesses that can prove themselves to actually be in business should be partioned or even denoted differently from private sellers or non-business businesses. This gives consumers a choice instantly as to who they wish to do business with. Does that mean those businesses wont defraud consumers? no. What it does mean however if they do that they can be pursued in a legal fashion by authorities rather than "the peoples court" which is basically the only real option in private sales.
The "good consumers" are tired of getting hosed by sellers who take them or misrepresent things. The good sellers are tired of bad buyers at person to person venues.
I'd personally rather see eBay require sellers use Billpoint and that all buyers its automatic, bid, win, and Billpoint does the charge. Lots of problems legally in doing that however.
We are not pro-eBay or anti-eBay, we are pro-consumer and pro-business. A seperation of legit business from private sellers instantly gives consumers a choice where they can at least attempt to make a thought out decision on who to purchase from. We are pro-auctioneer licensing as we know it will clean things up alot. We are pro revenue reporting, this is another area many legislators want to see happen. If a seller of whatall sells online that the sales are reported to the IRS. Its not because we think the IRS is getting the shaft etc. The web needs legitimization and with that will come consumer confidence and then the big businesses such as Walmart, Sears etc. may well take a real interest in the eCommerce venue. Now all they see are problems and businesses who cant turn a profit. The alternative will be regulation, its simply cannot go on the way it has. Its not a matter of fraud even, its a matter of the economy as a whole. The US of A is on very shakey ground economically and more than likely will loose its "marketplace to the world" status within the next 20 years to Asia.
Internet businesses need a way to prove/display legitimization to consumers in ALL sales venues.
How eBay deals with whats coming down the pike will be interesting. In our case we have been backing product off the site ever since they said our powerseller status is in question due to sales. We are not doing anything different but they re-arranged categories and have lots of rouge sellers selling stuff we cant compete against legally. So instead we gear more product into places where thats a non-issue.
I think eBay taking small steps to reign the site in is also a mistake as everytime they make a little step more & more sellers/buyers seem to get upset. They should just wham, do it. This is how its going to be and this solves most of the problems. That might be taking two steps backwards to take a step forward but the little changes people keep remembering... Well its only a month ago they did this, and three months ago they raised that. I feel the same is true for say PayPal.
While we dont utilize paypal I do understand their dilema and what they are trying to accompllish. I respect them for it. But, everytime they make a little step people get bent. Just take the BIG step and work from there forward.
The reason that people get so upset as for most sellers thats it. They have one truly viable place to sell and rely on the income and thats a dangerous scenario even with a normal job. Work today, lay'd off tomorrow.
We diversified our points of sale the moment we started working the web and we realized as a business more doors will open to us than wont. In our genre of goods there are LOTS of sellers but you wont see a one of em' competing at our B2C points of sale. Those places are completely delighted with us and have no need to bring in "risk" with others and our policies are solid. Dont like it? Doesnt work? Cant get it to work? Send it back we can replace it or a full refund is generated. No fuddlin' around and that includes the shipping cost. We have VERY few returns. We'll even credit them money if the item is so low ticket and say, "Keep it, we'll apply the credit to your next order".
Consumers love it, we track all of it statistically and its a non-issue issue, besides the fact, any return is a loss and thus we write it off as a loss.
Some sites even ask us when sellers approach them "ever hear of this one? Whatcha think?".
We've yet to see one B2C point of sale that will accept any seller who doesnt have a displayable legitimacy record. Before we attained our merchant account it was hard to even knock at some of their doors. Now, we've processed thousands and then some of credit cards and had all of 3 chargebacks. We display that record and the doors swing open.
Displayable legitimiacy is the BEST asset to have right now on the net and this is true w/ eBay as well. We have people who been smoked by other sellers come back over & over & over & over again. We have one gentlemen who buys 10-15 items from us each and every week for nearly 2 months now and we fulfill his orders giving him free stuff included.
Rewarding customers for trusting and selecting you as a seller is NOT done via feedback. Its done via tangible things they can touch, feel and use. 1 in 4 eBay users leave feedback when one doesnt solicit it.
We at one point actually had a professional do a cost accounting of what it would cost for us to establish a auctions site and have a chance at success even given the popularity of what we sell. The low end was 250,000,000. That includes servers, software, connectivity and advertising. Advertising is the killer. Word of mouth just doesnt do it. With auctions you have to continually drive new traffic, thats the difference between success and failure. The more vertical the market given the genre of goods the more pointed that advertising must be. Amazon, eBay, uBid, Buy.com, Egghead.com, Dell, Gateway and myriads of others do a decent attempt to make the web work for them in sales and its all due to advertising.
Signed: WhyNot!
posted on July 5, 2001 06:10:08 PM new
reddeer-"BIG sellers, means BIG $$$."
This is true. That is why eBay through fee hikes and restrictions is weeding out the small to medium seller. My bet is that eventually eBay will be charging a flat fee from the small seller to offset the "loss" of possible income because they are not a Big Profit Dealer. So, we have to find a place to go. A viable alternative is what thousands are looking for.That alternative will be either a free site, a paid for profit site or a cooperative or a combination of these.
I do agree with whynot that there is no competing directly with the eBay gargantua. But Whynot also pointed out that he/she is doing well on specialty sites. I also sell on a specialty site- JustBeads. It works. I also sell out of a mall shop and fully recognise the "See it- Want it -Buy it" thinking of the impulse buyer.I get many times what I would have on eBay for my items.Most of these folks are not bargain hunters- they are vintage shoppers who see what they want and buy it! These same people buy at antique shops and don't have the time to pick through yard sales and flea markets.
I think a niche site that can cut out a small part of the market for itself, can be just as successful in it's own way. I also think that auction isn't the only way to sell. A grouping of similar businesses attracts buyers to the entire site. The same is true in the real world. Anyone have an "antiques row" in their town or an area of boutiques? Each shop is different, yet they all attract similar kinds of customers. A niche site carries this over to the web.
But niche site or general venue- we small to medium sellers need to look for an alternative to eBay.
posted on July 5, 2001 09:01:53 PM new
Hello Whynot
Some interesting points & stats you brought up.
I must say though, that I think the fraud #'s depend on what online areas you spend your money in.
I know two eBay users, that would be considered power BUYERS. The two combined have been on eBay since the early days of 96, and combined have made in excess of 1000 purchases, with a grande total spent of over 100 K.
One of them collects a little bit of everything, the other collects approx. 90% of one specific item.
Between the two of them, and the 1000+ items, they have only been ripped off once.
Yes, ONE time only. I can't recall if the seller ever made good on the refund, or not?
BUT, I think that speaks volumes as to the fraud situation on eBay.
Now, if one was to jump over into the Computers & related merchandise categories on eBay, I doubt you would end up with those kinds of stats.
I also think that "some" buyers set themselves up as a mark the moment they get online. It's hard to feel sorry for someone who sends an MO for $1,000 to a seller with (0) feedback, yet it happens, and those are the people who scream FRAUD the loudest.
Just tonight I made this comment on a CC payment thread.
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Speaking as a buyer, I could care less how a seller wants me to pay, my MAIN concern is that the item is EXACTLY as the seller represented it. In todays online market, and all the fraud that one hears about, I suspect many buyers feel the same as I.
IMO a good reputation & feedback record goes a long ways further than what form of payment a seller accepts.
..........................................
Just for the record I AM a legit business, and pay my taxes like a good little business owner, but I would personally hate to see eBay split the site in two. As in one for legit business owners, and one for non business owners.
If a potential customer wants to see who they are about to do business with, they can look at the sellers feedback, and go from there.
There are plenty of legit business owners that are con artists as well, and unless the amount of money is over $100, most consumers won't go through the hassle of chasing them down & filing fraud charges.
IMO what eBay SHOULD do is raise the insurance amount on their site to $500, and not make it so difficult to file & win a claim.
I also rather doubt that eBay would ever be able to enforce rules & regs such as splitting the site, or that sellers would need to hold an auctioneers license.
Why? Because eBay is now dealing with sellers from numerous different countries.
I live in Canada, and don't need an auctioneers license to sell my items on eBay, no matter what George B. has to say on the subject. If push came to shove I could show them my various licenses & business #, but I doubt it would ever come to that.
eBay considers me a Power Seller, but can't even verify my existance through their verification program. Ironic don't you think?
Enforcing rules such as that would take away from the very concept that Pierre created, a place where P2P sales can take place.
I think the small mom & pop operations, as well as the part timers bring something to eBay that many of the BIG sellers can never bring. Unusual unique items that can often times be bought for a bargain.
I've always believed that people flock to ebay for two main reasons.
1. For the odd/unusual/rare items that cannot be easily found locally.
2. For bargains.
Take those two things out of the equation & you have a Walmart setting, which will never bring the buyers that eBay has seen thus far.
Is there room for the BIG boys, absolutely, and I welcome them with open arms.
They couldn't compete with me if their lives depended on it, AND they will bring MORE buyers who MIGHT just wander around & bid on one of my items.
A win-win IMO.
Labelle
Specialty sites may do well for certain retail type items, but I don't believe you'll find many sites for collectibles that you can say that about. I was selling on an online Antique mall long before I registered on eBay [approx 4 years ago] and once eBay took off my sales on the mall all but disappeared.
I'm all for some new sites that can even the playing field out, but unless the buyers are there it's an excercise in futility.
Like yourself, I too sell items locally, and have gotten to the point where I know which items will do better where. Not everyone owns a computer, and some items that are considered VERY rare in my area, are practically common place on ebay.
posted on July 5, 2001 09:44:44 PM new
If buying from a "established" business is a deciding factor in purchases, ebay would never have gotten off the ground.
The Internet auction has filled several voids that established businesses could not do efficiently or effectly.
The market for "used" goods was unfullfilled until the Internet auction came into being.
For 30 cents or a couple of dollars, a seller of a used item can expose his/her item to millions of people world wide.
A garage sale or a B&M might get a fraction of that market reach and do it less efficiently and effectly.
The glut of competition effecting the collectable/used market will also effect the large and established busineses. Competition is just a click away for all sellers on eBay, big and small.
Many large retailers have shunned auction venues due to this instant and effortless competition.
B2B venues all have failing track records due to vendors fearing this competition.
The big auto makers spent millions to get a supplier bidding system on the Internet and few of the parts suppliers would participate. They did not want their selling strategies aired on a bidding site. Too much information can be implied from real time business decissions showing up on an Internet site, whether gleaned by competitors or the customer.
There is also the problem of cutting out the middlemen through the Internet. If your supply source sees how easy entry is on an Internet venue and sees your sales and mark up on the venue, then why doesn't your supplier just sell the items directly on the venue ?
The car dealers association in Texas and several other states have forced their legislatures to pass laws preventing auto companies and used lease fleet cars from selling directly over the net.
There are many middlemen associations trying to prevent direct sales over the internet. In fact eBay is a member of a lobbying group launched just last month that is trying to stop these other groups from getting laws passed that prevent the circumvention of the middlemen.
It would save consumers billions of dollars if they could deal directly. Even banks are trying to prevent mortgage brokers from dealing directly with consumers over the internet, saving consumers thousands of dollars on mortgages.
Internet market venues are not a "fad", they are a viable and proven marketplace, just how viable will ultimately depend on the coming regulations.
posted on July 6, 2001 01:26:44 AM new
Well, I had high hopes for gegy until today.
As reported by AuctionBytes.com, gegy has business ties to AuctionEagle.com which was shut down yesterday for spamming. The CEO of gegy denied any relationship with AuctionEagle. Later, he back-pedaled and admitted he owned part of AuctionEagle and essentially purchased the article about gegy that started this thread. It was sent as spam.
I personally do not mind spam as much as I do telemarketers and junk mail. However, I do have trouble with dishonest business. Writing an article about yourself, purchasing another company to publish it, and denying any involvement is dishonest. Beginning to wonder if the 7 figure advertising budget is just hype.
posted on July 6, 2001 09:27:46 AM new
Wow! How devious and underhanded! So did he reach a million email addresses with word about Gegy, or what??? That's a move I would definitely pull, but never in a million years would I guess a professional would try a stunt like that! Apparently he's not going to spare any tactic to try and steal eBay's marketshare. He has the entire auction world talking about him, negative publicity or not.
What's your problem? I didn't say eBay would fall. What I did say, if you had read carefully, is that eBay isn't going to be able to prevent the rise of a competitor. The same way IBM couldn't stop the rise of Microsoft, and now 15 years later MSFT has twice the market cap of IBM. The same way that the world's preeminent bookseller BarnesandNoble couldn't stop the rise of Amazon, and now Amazon enjoys twice the market cap of BKS, and it's BNBN subsidiary is virtually a pennystock. The same way the world's largest Telecom equipment manufacturer Nortel couldn't stop the rise of Cisco, and now Cisco enjoys 5 times the market capitalization of Nortel. The same way Cisco couldn't stop the growth of Juniper. The same way 1500 lb gorilla Microsoft couldn't stop the rise of AOL. The same way IBM, Compaq, and Hewlett Packard couldn't stop the rise of DELL, and now DELL enjoys a market cap 3X Compaqs and 15 billion more than Hewlett Packard --- IBM is next. All of these new competitors were figments of someone's imagination before they rose to achieve astonishing success.
Viable adversaries are going to emerge no matter what the competition. eBay will do fine but it may face competition in the future it never anticipated.
No surprise here that a "startup" site would spam buyers and sellers. We get so much spam from folks farming our mail address at eBay its just unreal. We are one of the businesses that has fully supported eBay reigning in the email issues. Many sellers for example will sell to the winner and all losers who's bid they find acceptable as well. Thats fraud. The high bidder would never pay $30 if he/she knew 3 other people also could buy it that he/she bid against for $25,$20 and $15.
Again, a spam startup technique is CHEAP, bulk email gobs of folks and hopefully some bite. That CLEARLY displays right off the bat what to expect as a seller or buyer from a site. eBay spends ALOT of money advertising as do many other sites. Most auction buyers are transient in the regard. A successful auction site requires CONTINUAL expenditure for effective advertising or the traffic just stops. Our mailing list is over 35,000 strong and we also use it to drive traffic at our eBay auctions. That policy may well change shortly as due to category movements and eBays tightening the screws for sellers but not removing the bad buyers/sellers it may be in our best interest to drive our list subscribers to other services who really appreciate the work we do for them to succeed.
But back at it, for any site to make an effective run at eBay really requires a MASSIVE effort. If for example "amazon" made a TRUE competitor site to eBay it would probably damage Amazon core sales to the point of no return. Yahoo got hold of a venue that was Onsales Auction Exchange, we were the first anchor vendor to sign with Onsale and the new venue, we were already working with them on the B2C site they ran which was the #1 auction site on the net.
Yahoo does "many things" auctions require FOCUS to be successful. We again paid for a study to see exactly what it would cost for us to deploy a B2C auction and have any chance at success/profitability, the figures were SCARY. Its also why very few viable auction points of sale still exist. Those that do and dont run a profit are simply a tax loss.
Fraud is a very different issue on the net. The IFCC claimed like 64% of all complaints recieved were via auctions. Again, that number is going to be skewed by how many dont take action vs those that do. At the same time that 64% may equate to say .05% of all auctions transactions so the 64% is a SCARE number of sorts. Not uncommon with authorities or head hunters. The BSA as an example says 90% of all software at eBay is illegit, totally incorrect and if they were forced to sit down and prove it the reality would be that 90% IS legit, 10% is not but 90% of the sellers ARE NOT legit businesses or will sell both legit/illegit items. According to the BSA 54.7 billion dollars last year globally of illegal resale, thats a BIG BIG number in fact its more than the GNP of many nations.
Now look at OEM hardware, lots of folks dont know it but ALOT of OEM hardware or "deemed" OEM hardware is marginal. Its not OEM at all. Its items that dont pass the Quality Assurance standards and thus is dumped for pennies on the dollar and this is the same in ALL genres of goods. I have a list of wholesalers/liquidators that would make anyone gasp, some are excellent. Some will say OEM when in fact its not OEM at all, its basically stuff been sold as scrap thats being resold as OEM/NEW. If it doesnt work the sellers just ship another until one does.
This is no different in collectibles. We have a guy here local that sells cards and such on various web sites who gets alot of spamage offers as well. He's told me 4 in 5 offers he recieves are not legit and he can tell simply by the cost to him. I know nothing fo cards so I couldnt say.
Clearly however there are problems and they need be addressed before the goose no longer lays golden eggs. Feedback is not really an indicator of anything especially with the high feedback sellers. Most bidders simply dont look. They see 2000 and figure,"Hey! 2000! must be safe". Where-as the B2C sites we sell through no grey areas at all. Here's the contract and here's the rules, end of story. Additionally, seldom if EVER do we have a problem at them, eBays somewhat more sporadic in that regard but its still pretty smooth sailing.
I dont have the answers to all the issues. I can sit here and given proven ways to eliminate fraud, remove rotten buyers/sellers but I dont know the extent of site liability in doing so and as such just to say "do this" doesnt mean much since "doing this" might cause "that" to put the site at a point of libel.
The initial post to this thread is "ebays left the door wide open", thats incorrect. They OWN the door as no place is willing to expend the capital needed to put the foot in the door, I sure wouldnt take that risk if I had the money. There are MANY more sure fire ways to sell than auctions, auctions are a minority in sales. The impulse buyers and people who dont want to have prospective "hassles" are the majority by a HUGE factor.
Major retailers have not placed a stake in the web as to date all the web has shown is that in its present form it really CAN sell but nobody can make a profit at it except small businesses or those who operate outside legal guide. For us its funny in a way. We pride ourselves on only selling legit goods for resale. We now enjoy supply better than any of our competitors and we enjoy some of the best points of sale on the net EXCLUSIVE due to all the bad sellers. If those bad sellers never existed we'd by no means have those venues more or less exclusive.
Regulation on the net is a certainty in the US, not a matter of if but a matter of when. The wheels of such things grind slowly and IMHO its why the Bush Admin has now decided to "turn the dogs loose" when it comes to the IRS, DOJ, IFCC and why money is coming down to states and filtered down to the community levels. Its to train law enforcement to "not screw up" basically when making arrests pertinent to illegal activity. Every state I know of in the US basically says if your buying goods with intent for resale for profit you are by nature considered a business by that state regardless of what the individual thinks, your going to see this pursued at a LOCAL level.
Reddeer brought up an interesting point in that some sites have international sellers and this is a big reason why regulation becomes so difficult. The US cannot impose its laws on say Canada (as much as the attitude of most US citizens would like, most US citizens think "we are the world", in 20 years they are going to realize that Asia just took their place). Arrogance of some US folks never ceases to amaze me. However, eBay for example us a US based business and as such if restriction were to come down the pike in form of legal regulation the company has no choice but to abide, unfair indeed. On the other side of the coin if eBay were not US based it'd probably not be profitable or the giant it is. The US is one of the few nations in the world that actually makes it FAR more beneficial in sales to be a legit business rather than not, with that has come the mess of Medical coverage, Social Security etc. deduction on taxes for costs of doing business are essential to being profitable here in the US. For example we dont gripe that eBay raises fee's at all. To us we dont pay them a dime in listing or commissions as its all a cost of doing business and thus deductible (assuming we run enough profit to declare the deductions, obviously we're not going to have money given back, but the key is our taxes are lessened due to it).
Same with card processing, this/that, even our high speed web access, shop software etc.
eSeller noted how come eBay/PayPal survive etc? eBay is the largest flea market in the world and its almost a "household word" in name recognition. PayPal on the other have can be viewed as a cling-on. If eBay disappeared tomorrow or say required transactions use Billpoint (cant do, but lets just say they could) then PayPal would disapear tomorrow. They live due to eBay and dont think that problems with such services dont effect eBay, they do. Has PP been profitable? Apparently not as they have now raised fee's to more than the avg. merchant account which is 2.35% per transaction and a .25 batch closure fee. They are at 2.9% + .30 per transaction (preumably the .30 is the batch cloisure done for each transaction rather than a bath of whatall, 100, 1000, 10,000). In fraud, I dont recall the figures. But it was something like less than 1% with over 1 million transactions weekely. Doesnt sound like much at all, great track record.
Lets say its half of that 1% or .5% of 1 million transactions. Thats 50,000, all of a sudden that wee little .5% is actually quite a significant number, again, I dont know the real numbers, perhaps PPDamon could let us know.
The entire mechinism of card processing is going to change regardless, thats a given. How these third party services will fit in or if they will fit in is all in question right now. Most banks/card processors want em' gone not because of competition though I am sure thats part of it. More so its an issue of cardholders contracts being exclusive to the drawing bank and then people signing off on terms of service contracts that negate the bank itself or try to. For example w/ PP they wish to be sole arbitor of dispute, if you ran Fleet National Bank as CEO would you be happy with consumers who are allowing a third party who is not a bank, not a card processor but in fact a merchant no different than a gas station gain arbitration rights over your accounts, your money (in the case of credit) and your services/contracts? No way.
When you pay anyone via credit/debit card and get your cardholders statement it will say WHO the merchant is on the statement. If paypal does the charge, legally thats who you did business with, not the supplier of goods at all. Yet, there are no terms of consignment. Essentially whats being signed off on in the terms of service contract is:
We are the merchant, you agree not to hold us libel for the actual goods transfer, merchantability, legal resale or any portion of the transaction beyond the actual card charge. If they make a mistake and charge $2000 instead of $20 that they are libel for, if you recieve a empty box with tracking ora rock or hosed goods, illegal import whatall they bare no liability you sign off on that liability. So whos is libel? Simple, YOU are.
If your bank decides to say, hey, you breached our contract with this card and we are fining you or murdering your credit you have ZERO recourse. So essentially its a "please trust us, but, we dont turst you or the seller so we wont consign and thus OWN the goods". At Business to consumer points of sale this is EXACTLY what they do. You buy something from wherever, beyond.com, the moment your charge is approved we drop ship under their label. THEY own the goods via terms of consignment, they charged the card, they are the merchant and OWN the goods they sold you. I never have understood the gullability of people in this regard.
They cant walk into the bank that issued them the card and say "Please perform a charge to my card and transfer the money to say reddeer's account". They wont do it. Believe me if they COULD they WOULD. But people think its perfectly ok via a third party service yet their own bank wont do it. What it is is a hole, nobody ever expected cardholders to sign off on services that claim no libel and the cardholders contract is exclusive to the bank, not between the bank and the service. So the bottom line becomes one of which the BUYER is basically libel for almost all occurances of any issues be they issues of legality or simply getting hosed.
Not the services fault at all, again, bad buyers, bad sellers. This is what needs to be addressed and I can understand why sites dont want to go direct at it. First if they do they are now more than a venue of sale, secondly money is money. Type Windows oem into the search engine and see the 5-12 pages of tens of thousands of dollars of illegal sales. Collectibles again are just as wide open and unless every buyer gets things appraised its really quite hard to tell.
I'll even give you an example that happened to us in 1998. We had a buyer who bounced a check with us. We looked into it with Fleet Bank. Fleet did an investigation and found this guy not only bounced checks all over the place from TONS of different banks but what he was doing was buying top notch graphics equipment to replicate autographs which he turned around and was selling at various sites. They fried his *uts but it took nearly a year and a half to do it. During that time and for soemtime before it came to the attention of authorities he sniped alot of people.
Part of the problem is pursuit. In my opinion both buyers and legit sellers really need to step up to the plate. In reality these are the only entities that can "clean up the net". Authorities cannot do it, they know it and thus the only option they have available to them is regulation forcing points of sale to be legal compliant or face the judge and this is exactly where we are headed and thats GLOBAL. In the US what your going to see are the hunting dogs of the IRS, IFCC and more and more organizations that will pursue things on the "manufacturer" behalf like the BSA (business software alliance). Already many states have funneled money down to local authorities to train so they dont screw up.
Local to us a lady just 3-4 weeks back who sold stuff she bought in garage sales and resold on the net was hit with more charges than the paper cared to print. No DBA, incorporation, no taxes paid on revenues, illegal export all sorts of stuff. Bottom line is every penny she made is out the window and then some and I'd guess she'll never lawfully use the web again.
Its all very new technology and just like television its only a matter of when regulation hits, not if. The only way to prevent that is for everyone whos a good person to get proactive and start cleaning house even though its not our house or your house. Its all of our's.
Signed: WhyNot!
When I said why aren't PayPal and eBay dead, what I was talking about was, they deceive people all the time and yet they're doing fine. litlux had said Gegy would die due to the deception of their CEO. I'm saying not a chance for the same reasons eBay and PayPal have survived! All of these firms appear to take whatever measures necessary to succeed. If that means deceptive tactics to get free publicity, or eBay placing BillPoint logos in seller auctions without their consent and claiming it was a bug, or PayPal charging sellers when initially we were told it would be a free service, we're faced with lies, deception, deceit every single day!
So how did the lady in your post selling garage sale items on the Net get caught by the authorities?
posted on July 7, 2001 11:46:37 AM new Feedback is not really an indicator of anything especially with the high feedback sellers.Most bidders simply dont look.
Sorry, but I disagree. IMO most bidders DO look, especially when the item is over the $50-$75 mark. As the $ amount for the bid increases, so does the scrutiny by the potential bidder.
I don't know a single collector that drops $100-$1000 on an item, before first looking at the sellers feedback, as well as looking at the feedback links themselves to see what those feedback were for. No matter if the sellers has 200 feedback, or 2000.
The feedback page has always been a great indicator of a sellers track record. It shows the date the seller registered, the pos vs. the neg, as well as provides links to at least 30 days worth of their past sales.
If buyers can't/don't/won't take the time to check sellers out before placing a bid, there's not much the Govt. can do to help them.
Something else that has drastically changed the fraud situation on eBay in the past year is that *any* seller can now offer online CC services. If buyers want to make sure they are not being scammed, they simply need to use a CC for their purchase, and voila, instant insurance against fraud.
I think the fact that I do NOT offer payments via a CC [except BiPay] attests to the fact that people really DO read the sellers feedback. I have people send me checks & MO's for $500+ with out so much as blinking an eye. Not one customer has ever forced the CC payment issue on me, due to fraud concerns, or anything else. I believe my feedback & sales speak for themselves.
As far as eBay being a US company, that may be true, but I doubt they will ever force sellers World Wide to provide the various documentation & licenses that you've implied.
Why would one need to have a business license in order to sell their second hand clothing, etc?
And as far as auctioneer licenses, I very much doubt that day will ever come either.
Most of the stink I've read with regards to auctioneer licenses came from a few select States, nothing Federal?
There may indeed be some States that force eBay sellers to require a State License in order to hold online auctions, but I can't imagine something like that ever being regulated by the Feds, or being forced on every user in the free world simply because it became law in the US.
By law I cannot export Eskimo Whalebone items out of Canada,[unless I have an extensive list of paperwork in order] but I can still list them on eBay Canada, and ship them to most Canadian Provinces with no paper work whatsoever.
There are numerous examples of the same sort of legalities presented on eBay. I can do it *here*, but I can't do it *there*.
If eBay was to even attempt to clamp down on every minute law regarding the items sold, and who they were shipped to, on their site, it would be a nightmare to say the least.
The ONLY issue I do agree with you on regarding the Feds, is they will be taking a VERY close look at eBay sellers via the IRS.
Have to agree with you about checking feedback! If I see someone with say 100 or more glowing positive feedbacks with zero negatives, in my mind that's a green light to bid! No risk by virtue of their history. And if you still have doubts you can check out a few of their past auctions that correlate to feedback. Who the heck cares if they're a business??? In fact the time I was ripped off it was by a business. Now if the person has 1 or more negatives, that's more of a yellow light --- tread cautiously. If the negatives are explained away effectively then the caution flag gets lowered.
Regarding the IRS, how the heck are they supposed to determine who sells what and for what profit margin on eBay and other auction venues??? They're undermanned as it is!! A quick glance at eBay closed listings would make you think everything IS SOLD AT A LOSS!!!
Oh, I agree about the IRS being understaffed & overworked. Ditto with Revenue Canada.
I know scads of people who have sold items at RL auctions up here & never declared a dime of it at tax time. Same thing with the mom & pop sellers at antique shows & flea markets. They take cash, which is pretty hard to trace.
The problem with eBay is this. The IRS "could" target certain sellers on eBay, and check to see if their tax claims jive with the volume of sales on eBay. The end of auction "sale" proves nothing, [high bidder may have been a deadbeat etc?] BUT, they can check their bank accounts.
I imagine there's thousands of Canadian sellers on ebay that consider this "hobby" money, but it might be hard to explain to Revenue Canada where the $10-50K in International funds in their bank accounts came from?
There's always a paper trail to follow if the Feds decide to rip your biz apart.
The odds may very well be slim to none that they'll target you,or me, but if they do, it could mean some serious fines & payback unless you're doing everything on the up & up.
eSeller: There is dirty dealing all over the net and its the reason regulation is going to happen, not an if but a "when". As to the lady local to us who was knabbed as I understand it she had a complaint filed against her with local police, they turned it over to the district attorneys offices and that as they say is that.
Reddeer: I can only speak from our experience in feedback. We have over 7000 of em' and we dont solicit it, in reality we've have well in excess of 28,000 sales at eBay since our arrival there in late 97'. People dont tend to even look at our feedback, we have about 50 negs, 10 or 12 of which are valid, the rest are retaliatory.
How regulation occurs is going to be interesting to see. I know the long term goals the fed here has and those are simple. They want to see the number if ISP's out there reduced, they want full log monitoring of internet users by ISP's and they want a controlled platform for it. The TIme Warner/AOL merger being swept through rapid is one step towards that. Within 2 years AOL dial up services will go free effectively killing off 95% of all ISP's globally, this is no secret, its been plastered all over the industry journals. Subscribers will get cable modems and high speed access. Secondly is Microsoft.net, most people dont realize the breakup of MS poises them to monopolize the web. MS.Net while being deemed an API right now in reality will be an Internet Operating System and again, no person will own a CD of software or DVD rom etc. once all this technology really starts to move. The goal is to integrate high definition TV with computers, internet, phone etc. all in a highly regulated environment. There has even been talk about regulatable databases by the BIG isp's. That is to say they will hold a database of sites they allow users to surf.
The issues at hand are piracy, porno, security, national security, fraud and then some. The internet to "humanity" at this point has not been a blessing, study after study show the exact opposite. But the technology is in its infancy as well.
As to IRS thats easy. I've done quite a bit of contract programming for some banking entities and worked for Continental Collections (a sizeable collections operation handling walmart and others) doing programming.
The "financial" networks are all inter linked. People used to wonder how when they bought a large ticket item all these financial entities from collectors to IRS knew about it? Thats simple, its all a loosely linked network. All the folks at the IRS need to do is look at banking activity via the computers, thats easily automated.
If someone's having 100 deposits every month yet their income tax doesnt seem to have changed much that can flag the account. You have not saw the IRS really get after folks as the Clinton Admin. "softened" what were called guerilla tactics of the IRS. Bush has made it crystal clear he has no love of the internet. He thinks its a detriment to big business (which he may be right) and hes certainly right in the statements of illegal activity and national security.
How can the IRS know what you've sold? REad terms of service at any of these sites. They will hand that information over freely. Most dont say "We reserve the right to work with police or this ir that" They instead say "We reserve the right to release information to any legal entities", legal entities can mean banks, collections, IRS, authorities etc. REad terms of services LITERAL at sites not an "interpreted version" of I think this is what it means. Even ISP's say they reserve the right to cooperate fully with legal entities. AOL for example quite commonly will log account activities to files. That way when someone goes batso and injures someone else they stay out of any libelous situation and can provide data. There have been many a case where data gathered by ISP's to file have been used in divorce and criminal prosecutions.
When we for example use "sniffer" when someone tries and hack past our security an email instantly goes off to their offending ISP, they can IP Spoof whatever they like, Sniffer can trace back to the original ISP. They instantly start recording all activity on the users account.
People for some reason think that authorities are backwards on all the technology and such, thats incorrect, the fed senators and such dont understand the broad scope. Thats not to say that law enforcement and state entities are not up on it. The fact is they are getting more up on it by the week.
As to auctioneers license I wouldnt be surprised to see it take effect but my guess is by the time it would be instituted auctions will be history online. Most viable sites have already folded and at best a handful are left that really bring in any sales. The places that are bringing in TONS of sales are the price comparison engines, we make ALOT more money via these than auctions.
Signed: WhyNot!
I have sense from reading your various comments on AW that you do not sell Antiques & Collectibles, correct?
I suggest you look into your crystal ball & see how many millions Meg & company made via the auction format last year, in just the antique & collectible area.
eBay has no reason to give up the auction format, and IMHO doing so would be a rather stupid idea.
Hell, even Jeff & Pierre realized way back in their early Auction Web days that it's the "excitement" of the auction that keeps users coming back time & time again.
I know numerous buyers, and according to some of them eBay is somewhat like gambling. One can get addicted to the action.
Here's an article from the past that mentions just that. The bolding is by me.
............................................
AuctionWeb went on-line in September 1995 with little fanfare. New sites
typically have trouble attracting sustainable traffic flow, and there was no reason to believe that Omidyar's creation would
be any different. "I was skeptical when Pierre first explained his idea," says Jeff Skoll, eBay's president. "Auctions are
a chicken-and-egg business. If the buyers aren't there, the sellers won't come and vice versa.
"But on-line auctions, it turned out, are anything but typical Web businesses.
AuctionWeb's founders soon learned that their site was largely self-promoting: sellers posting descriptions of their items to groups on the Internet would embed links in their messages; buyers clicking on those links were delivered right to the seller's page on AuctionWeb. From there, the buyers frequently wandered to other auctions at the site. In addition, many buyers were becoming sellers themselves, promoting their pages--and
consequently AuctionWeb--to the world at large.
Auctions are anomalous in another important respect: users not only don't mind
paying for the service; they insist on it. The users, in this case, are the people selling goods and services on a site, who
willingly pay the auction house a fee and/or a percentage of what they receive for their products. In return, they receive some
assurance that the site's quality will be maintained. For example, eBay charges sellers a listing fee of $1 or $2 per auction
plus a point or two of the winning bids.
The AuctionLand OL Report, a newsletter covering on-line auctions, estimates that this yields $2 to $3 per auction on average, for a daily gross of almost $20,000. If those calculations are accurate, AuctionWeb's revenues could easily reach hundreds of millions of dollars a year, even if only a fraction of Skoll's anticipated
traffic materializes.
To observers of the generally lackluster
performance of on-line commerce, Skoll's expectations may sound extraordinary: he is currently building the technical and
service infrastructure to support 5 million auctions a day by the end of 1997. But eBay's president has reason to be optimistic.
By April of this year, eBay was opening and closing 7,000 auctions a day and growing at 25% a month. (In April alone, the company cleared more business than it had in all of 1996.)
One reason that AuctionWeb and similar sites are booming, Omidyar and Skoll believe, is that they bring the pleasures of social interaction to electronic sales. At conventional Web stores with fixed prices, buyers place orders by filling out forms, a humdrum experience at best. Buyers and sellers in an on-line auction, however, become part of a community: chatting,
sharing experiences, and even arranging private trades.
And bidding, which is by definition a kind of contest, offers an exciting way to shop.
(The last half hour of an on-line auction
can be a real ride.)
............................................
IMO auctions for retail type items may be on the wane, but for the true blue collector of antiques & collectors, it's still gaining ground each & every day.
Auctions are exciting, addicting, and for many buyers a "rush".
Go to any RL auction & you'll see the same.
I doubt you'll see eBay dropping the auction format anytime soon.
posted on July 7, 2001 11:08:33 PM new
NEWSFLASH! NEWSFLASH!
Microsoft introduces STIFF competition to eBay, but introducing...
MSbayXP.com
Everyone is required to register. Period. Everyone that runs the Windows OS is already registered. All IP addresses have already been assimilated, all credit card numbers are ALREADY on file, just to save you time.
MSbayXP.com will have relisting services, because they already know what you want to sell. There will be no fraud, as their is only a single market provided by a single company to single world. It is called "Singular Assimilation Services" or SAS for short.
Microsoft says that everything on MSbayXP.com will be FREE until they put eBay.com under and then buy them. Then they will raise the fees and offer GREAT customer service like MS is known to offer.
When they do, the new site will be called eBayMSbayXP.com. A simple name, and the interface will be updated to reflect the wonderful BOB operating systems offered just a few years back.
That's a move I would definitely pull, but never in a million years would I guess a professional would try a stunt like that! 
Now if the person has 1 or more negatives, that's more of a yellow light --- tread cautiously. If the negatives are explained away effectively then the caution flag gets lowered.