posted on May 3, 2001 02:28:43 PM
This from NewsBytes:
Ebay Sellers Making 25% Less Than Year Ago - Study
By Dick Kelsey, Newsbytes
NATICK, MASSACHUSETTS, U.S.A.,
03 May 2001, 12:30 PM CST
A variety of factors chopped 25 percent off the average price for collectibles sold on Ebay [NASDAQ:EBAY] in the past year, according to an online auction newsletter.
Supply and demand, higher shipping costs, concerns about online fraud, and greater competition from auction and fixed-price Web sites drove the prices down, said the study by Auctionbytes.com.
More people have joined the ranks of Ebay sellers in the past year, it said, and veterans have begun offering items that fetch higher bids.
"It's pretty basic economics," Auctionbytes.com president David Steiner told Newsbytes. "If you have more supply being fed into the market, the price is going to go down. What Ebay has done is open up this collectibles market to a wider range of people."
Auctionbytes.com compared the average selling price for 30 arbitrarily-chosen consumer collectibles a year ago with current prices and found that prices had dropped from between 9.5 percent to nearly 34 percent on average.
Electronics products, cars and other big-ticket items were not included in the study, Steiner said.
For example, a search for a GI Joe collectible a year ago produced fewer than 1,500 items with an ASP of $26.93. This week a search turned up 14,000 items selling at an average $19.85.
"We didn't go in looking for this," said Steiner. "The numbers just hit us in the face."
While supply is more than keeping up with demand, sellers are finding other online auctions and fixed price sites.
"I don't see Ebay in any great danger from this competition at this point, but it will have a greater impact in the future," Steiner said. "Niche sites like PotteryAuction.com and JustBeads.com have been able to build sustainable communities. In addition, many sellers are creating storefronts to sell goods at fixed prices."
A representative of Ebay had no immediate comment.
Auctionbytes.com is on the Web at http://www.auctionbytes.com
Ebay is at http://www.ebay.com
Reported by Newsbytes.com, http://www.newsbytes.com
posted on May 3, 2001 02:55:15 PM
This item confirms what I said in another thread concerning just how many listings an auction site can sustain. I think eBay has surpassed that number.
posted on May 3, 2001 03:28:19 PM
Vidpro2: this is off-topic, but thanks for the tip about justbeads.com. I have some nice beads to sell so I'll check them out. Appreciate the reference.
posted on May 3, 2001 04:32:03 PM
The study is accurate and Pursglove knows it. So does anyone who's been selling on eBay for the past few years. The market is being flooded with new sellers, while the established sellers are giving up or cutting back. Not only are prices down, but the number of successfully completed auctions is down as well. After selling on eBay full-time for four years, I'm going to look for other income sources and put eBay on the back burner.
To be fair, low sales aren't the only reason. I've made a few mistakes, most notably failing to keep my stock up. I'm getting a little tired of newbie buyers who complain about every little thing. Also, last week was a record-breaker for deadbeats. Thirty late payments within a two week period; most of these will never send payment. I lose $500+ a month to deadbeats. eBay charges me anyway, but has taken almost no steps to provide protection. When I see an auction close with a (0) feedback buyer, I shudder.
It's getting to the point where I'd rather sling burgers than take my work home with me.
eBay's sustainability isn't the issue. There are plenty of new cattle just waiting to jump on the eBay bandwagon. For every seller that leaves, two will join in. I'll keep eBay as a part-time job - there's still money to be made. But I don't see it as a full time occupation any more.
eBay is driving prices down by shuffling buyers off to Half.com, where there is no artistry, just a bottom-line figure. Half.com requires sellers to ship within 48 hours, which I usually can't do. Ironic that eBay's own store advertises "shipping within four business days."
Bottom line, if I wanted to be a "distributor," I would have joined AmWay.
posted on May 3, 2001 04:44:35 PM
basic economics...when supply goes up but demand doesn't also rise, prices go down.
Is ebay overloaded right now? Maybe. Is it the beginning of the end? Probably not.
Some sellers will drop out as they find they cannot remain profitable and can't make the neccesary changes to become profitable again. Others will change their product mix to find other items not currently saturated. Some will tighten up their operations and weather the shake out so that when the number of their items finally drop they can again profit from the lower supply and higher demand.
It is also possible that new buyers will come on board and raise demand and prices will again raise.
We are just experiencing the normal ups and downs of the marketplace.
eBay can always point to the fact that sales are at an all-time high, and it's probably true...if you take into account electronics, computers, cars, etc. This comparison was done for consumer collectibles - and we've all heard anectodal evidence about the falling prices in those areas. This is the kind of quantitative evidence that eBay doesn't let out freely.
Here are just a very few examples (and we have many more) all taken at random:
posted on May 3, 2001 06:16:00 PM
I have said this before, and I'll say it again:
The lower prices and fewer bidders is a result of the negative and threatening TOS that are becoming the norm on eBay.
Even new sellers (ie- under 10 FB) are using this type of TOS. When I started on eBay 4 years ago this month, it was a friendly type of atmosphere; no more, as even the new sellers want to treat any bidder as a crook.
posted on May 3, 2001 07:21:20 PM
Vidpro, although I don't sell collectibles, the numbers seem credible. I was shopping at Goodwill a while back and saw a set of Elvis plates for sale @ $75 each. I happen to know the store manager prices collectibles according to a price guide. I logged on to eBay and saw the same items selling for $10. Okay, I'm no MBA, but it seems like sellers are giving their goods away.
OTOH, I've had some success recently using the BIN feature. I list items at $16.99 with a BIN of $19.99. Many bidders (most) have gone ahead and chipped in the extra $3 bucks just to secure the item quickly. I'm not making a lot on the deal, but the items are turning over quickly.
Vidpro, just to repeat what I said before, final values only tell half the story. The total number of completed auctions is down also.
For me, the honeymoon is simply over. I look through the categories where I sell (software) and see pure cr*p is what is popular. Most of the big sellers are illegal compilation discs containing copyrighted software. Sellers are placing huge banners to draw bidders to their own web sites. It looks like all the successful sellers are cheating in one way or another.
Rather than switch to bootlegs, or sell fat-burner pills, I'm going to de-emphasize eBay and keep it for part-time income.
posted on May 4, 2001 04:31:22 AM
The trend that is readily apparent is that there are more listings in every category. Just by sheer numbers, that is going to keep the price of items down. If a buyer misses an opportunity on one auction, there are another 10 closing within a few days. The sense of urgency that would cause a bidding war is no longer there for the buyer.
Are there still going to be things that do well on eBay? Absolutely. One-of-a-kind items that are first to market. But I would bet that once a successful auction has taken place for an item that does extremely well, there will be a dozen similar auctions up within a week.
Nothing wrong with this. That's the marketplace, and as reddeer mentioned, the seller that's diversified is in a stronger position.
posted on May 4, 2001 09:02:21 AM"The trend that is readily apparent is that there are more listings in every category"
I would agree that this has played a huge part in the price drop in the collectible categories over the last few years. It's not just a matter of increased supply lowering demand [and therefore prices], however; increased listings also tend to make it harder for buyers to find what they are looking for [remember the days when you could browse through an entire category on your lunch hour?]
As both a buyer and seller of collectibles, I can't really complain about more collectibles being listed, since I have purchased many nice items off eBay that I wouldn't have been able to find elsewhere and it's nice to have more things to look at. The big problem in my opinion, though, is the fact that more and more "retail" and "mass-market" items have found their way into the various collectible categories, and in such numbers as to overwhelm the rest of the items being sold there. Now, this is obviously not an issue in such collectible categories as Beanie babies or Pokemon cards, where the items are generally brand new and mass-produced in the first place. But in categories such as watches, jewelery, glass, etc., where a "true" collectible is something that is essentially unique, it has proven to be the kiss of death for many sellers. Seeing the pocket watch listing jump from 10 pages to 70 in the last couple of years would be wonderful if it meant that more rare and collectible watches werew actually being offered. Instead, though, it simply means that you have hoards of sellers each listing hundreds of brand new, cheaply made, faux "collectible" pocket watches week in and week out.
Yes, I know this is a complaint I've made before. And it's a large part of the reason I have pretty much given up selling on eBay [ther other part being all the new fees and regulations]. But I mention it just to point out that "increased supply" is only a good thing if the stuff for sale is actually worth buying and not just junk cluttering up the place....
Regards,
Barry
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The opinions expressed above are for comparison purposes only. Your mileage may vary....
posted on May 4, 2001 10:27:00 AM
"In fact, an eBay executive said Tuesday that the auction site would triple its share of the e-commerce market in the next four years, a strategic move fueled largely by a shift away from consumer auctions on low-priced goods."
The above quote in the article from eBay managment is a bit haunting. How exactly will eBay shift its business away from consumer auctions on low priced goods?
The only way I believe the above would be possible would by increasing fees, thereby directly making small item sales economically unfeasable. eBay doesn't control the products we list, so how else would the above plan be initiated?
I must be psychic. Or psycho. One of the two, anyway....
Within an hour of typing my post above I received a phone call from a gentleman who was planning on importing brand new, mass-produced pocket watches and marketing them to "collectors". First, he wanted to know if I thought there was a market [perhaps on eBay] for reproduction watches that had the name and look of "classic" pocket watches from the early to mid 1900's. Second, he wanted to know if I, as the author of a well-regarded book on pocket watch collecting, would be willing to endorse his line of reproduction watches. In exchange, of course, I'd get "free" publicity for my book, since my endorsement would go out with every watch sold.
Needless to say [although I'll say it anyway, just in case], I very politely told him to jump in a lake. It's bad enough that the collectible pocket watch market is flooded with new items, as I mentioned in my previous post, but now somebody wants to flood the market with REPRODUCTIONS??? I told him in no uncertain terms that I thought this was a very bad idea, and that if he really wanted to sell new pocket watches he should sell ones that were unique in their own right instead of trying to copy older watches. It's not like old pocket watches are all that hard or expensive to buy -- you can still find plenty of decent quality American pocket watches from the warly to mid 1900's in the $50-75 range, so it's not like selling reproductions would allow somebody to buy a "classic" watch who otherwise wouldn't be able to find or afford one....
I have nothing against new, mass-marketed pocket watches. In fact, the very first pocket watches I ever bought [before I got into collecting] were battery-operated quartz ones that I picked up for $15. But I do strongly object to these watches being sold on the collectibles market in bulk along with more traditional vintage and antique watches, and the thought of somebody actually making reproductions of older watches just makes me a bit ill.
What a world, what a world....
Barry
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The opinions expressed above are for comparison purposes only. Your mileage may vary....
posted on May 4, 2001 11:15:53 AM
Technology moves very quickly and despite what ebay thinks, they are a technological company. Thus, if someone invents a better site, the migration will take place.
It may not seem plausible now, but look at all the software companies that used to dominate and no longer. Remember Lotus, dBase and Wordperfect used to be the industry standard.
What will probably give ebay competition will be more of a niche site for each of the major collectible group. The mass merchandise will probably stay on ebay, but the true collectibles will probably migrate off.
Why would sellers move? I think the frustration level is getting there. It will take some creative thinking, but it can happen. For the profit margin as reported by ebay is well over 80% of every dollar ebay takes in. A well finance competitor with the proper business model can do it.
Why would buyers move? Because the mass merchandise will make searching such a daunting task that a true collectible site oriented towards their interest would be a winner.
More importantly, ebay site stability may also be a factor. Can ebay really keep up with a 50% compounded annual growth?
Also, the rules on ebay has gotten quite complex. They are continually changing. What we need are more simplistic sites devoted to our interests. Not one where categories number in the thousands and finding something on the site map requires a PHD.
posted on May 4, 2001 02:36:47 PM
In my observation Ebay is not quite dead, but it is in critical condition with no life support available. I have sold over 1,000 items during the last two years and the past month or two has been the dullest it has been since then. In my opinion ebay has done everything it could think of to discourage bidders and sellers. First there was the "Watch My Item" feature which knocked out a lot of bids. Then they installed "Buy it Now" and then required the potential buyers to post a credit card before they could "Buy It Now". Then they increased fees, started charging extra for 10 day auctions, and charging for their fuzzy pictures. The next step will probably be to charge for any pictures no matter where they come from.
I don't think it will get any better. Just worse. I have never known a large company that improved when times began to get tough. They just get worse until they go out of business. Gibson's Discount Centers used to be the rage around here. Now none are to be found.
Ebay is beginning to look a lot like Bidville. People hate to just give their stuff away, so they put higher starting bids on and as a result lots of items never get a bid.
Maybe a new auction site similar to the way Ebay used to be will arise. I hope so but I doubt it.
