posted on April 5, 1999 09:56:00 PM new
Wants2know: Actually, the marketing approaches of eBay and Amazon are so similar that it is obvious that Amazon's entry was aimed squarely at eBay. Indeed, the same efforts and approaches that AU is following to differentiate its product vis-a-vie eBay will work against Amazon. No longer will the core buyers and sellers at eBay shun other sites out of a sense of blind loyalty to eBay. Indeed, by diluting the intense loyalty the Internet's early adopters have toward eBay -- they have similar feelings about Amazon -- Amazons' entry makes it easier to compete. And how will we compete? Take fees for listing and selling. One would have to be quite studied to see any difference in the fee structure between eBay and Amazon. Both of those fee structures charge a minimum 25 cents to list, based on the opening bid, but escalate listing fees to $2.00 quickly. They both also charge $2.00 for a bold face listings and italic listings. AU's fee structure, on the other hand, calls for a straight 25 cent fee for listing regardless of price, 25 cents for boldface and italic listings and no penalty listing fee for reserve auctions, regardless of the reserve. Both Amazon and eBay start out charging a full 5 percent on the first $25.00 -- about 40 percent of all auctions -- compared to AU's flat 2.5 percent of the sale price regardless of the final bid price. AU, eBay and Amazon all have basic straight auctions, Dutch Auctions and reserve auctions but only AU has the first bid wins auction format. AU is also the only auction site that really protects buyers in the volume price categories ($1.00-$100.00) with its escrow-based BidSafe service which is built-in. BidSafe, for those who haven't looked since March, is now free for bidders/buyers who use a credit card. Also all sellers -- even newbies starting out -- can obtain BidSafe Gold that lets them accept credit cards for the items they sell is unique among the three sites you mention. Heck, our seller fees for using that service are competitive with Ebamayzon's straight - you takes what you get -- auctions. The stories I hear about people being cheated on $5 and $10 items is legend. On these points and others our marketing position is just as attractive against Amazon as it is against eBay. There is one other element that completely slips your analysis in marginalizing AU, wants2know, and that is the corporate backing and committment to the online auction format. I would be the first to acknowlege that both eBay and Amazon are Internet startups with enviable track records. AU's history is different. AU represents the newspaper industry which, I can assure you, makes more money off of classified advertising in a single quarter than Amazon has lost and eBay has made (combined) since their respective inceptions. The folks in this industry are also quick to adopt new technology. For instance the move from lead type to cold-type was quite quick. As a reporter, in 1975, I used my first digital screen to write stories in a small five day a week daily in western Oklahoma. This was a couple of years before the Apple I. We see the Internet and its impact, not only on the International and national communities, but soon the local communities. Indeed, unlike Amazon which has never made a profit (save from its sale of stock) these old line publishers were making money when the first radio station when on the air in the first part of the century. People still read the New York Times, L.A. Times and Washington Post in the depths of the depression. The arrival of broadcast network television in the 1950's and 1960's was also supposed to destroy newspapers. Now most major newspaper chains own the maximum number of television stations allowed by the FCC. Challenges to their business have been many. The Internet is just one more. We're going to be there. Strategically, the entry of Amazon into this market space will ultimately have little impact on our plans, efforts and ultimate success. Yes, wants2know, we're different from eBay and ... and from Amazon.
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Neomax
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