posted on May 28, 2001 03:48:00 PM
I noticed amy and toke discussing the logistics of eBay being able to deal with returned items in another thread and remembered something I came across while researching Maynard Webb. The entire topic of dealing with returned items has to do with the speculation that eBay's storefronts will be run much like half.com and that the payments and EOA notices will go directly through eBay via their messaging system. This would mean that the seller could have no direct contact with the customer and the payments for the item would be made through eBay, probably by credit card, and then eBay would reimburse the seller.
I suspect this speculation has some merit because of a few things I found while running a web search for info on eBay's President of Technologies, Maynard Webb. The first article discusses eBay's need to keep all sales on it's site which I think we all know was the real reason for many of the new policy changes including the email contact and the website linking. If this is a priority for eBay, which I believe it is, then I can't see any other way for them to control the sales other than to forbid all direct contact between the seller and the buyer. I am hoping this only applies to the storefronts and not the auctions but I do believe eBay will eventually stop allowing email addresses on the auction listing page. I don't really want to discuss that aspect because it causes my blood to boil so I'm only going to talk about the storefronts right now.
Here is a quote from the article:
QUOTE
"Added features have been a priority, the source said, because some sellers on the auction site have been known to make the final sale offline, depriving the company of its cut of the transaction. As that sidestepping has increased, eBay management has made a conscious decision to hold off on upgrades that could improve reliability, the source said. Instead, it has invested in features to keep users on the site, the source said."
END QUOTE
http://www.internetweek.com/newslead01/lead011101-1.htm
The other interesting thing I found concerns a company that lists Maynard Webb as a member of it's Board of Advisors. I spent three hours one evening going through the results of my Google search on Maynard Webb and I only found two companies that he's currently involved with, both as a member of their Board of Advisors. I'm sure he is a very busy man and I don't think he would be involved with these companies without having a good practical reason. The company that I think is most relevant is called Swift Rivers, Inc. (swiftrivers.com) and they make automated returns software. I really don't know if half.com uses their software and I'm hoping someone else may know the answer but I'm very curious as to why eBay's President of Technology would be interested in this company since eBay is supposed to be a venue?
This is an interesting article that discusses Swift Rivers and their "return management" system:
QUOTE
"Many return scenarios must be scripted into an application, which requires a behind-the-scenes rules engine, said Joel Butler, chief technology officer at Swift Rivers Inc., a Woburn, Mass.-based maker of automated returns software. Swift Rivers' application is integrated into the merchant's Web site, so a customer returning an item initiates the process there."
END QUOTE
http://www.computerworld.com/cwi/story/0,1199,NAV47_STO60577,00.html
Now it's also possible that this type of software could be used directly by the seller in his storefront and that eBay plans to offer it as an option for a fee but that just doesn't fit into their priority of keeping all sales on their site.
posted on May 28, 2001 04:05:58 PM
If eBay establishes rules for returns as they do on Half, then that'll be another nail in sellers coffins! Any policy they institute, you can be sure will have buyers interests at heart and will put all the onus and expense on sellers. I can't wait to hear what this policy will be.
posted on May 28, 2001 04:14:33 PM
No ebay cant handle returns even on half.com buyer and seller have no contact buyer and seller still handle shipping and returns.
Ebay would know how to handle being responable for 5 million or more item tranaction and the returns daily maybe they would like us all to ship our item to them so they can handle listing and shipping too.
In fact that might just be the ticket lets get the 20 or more million Registered auction users to each send ebay one item shipped all on the same day.
With note stateing since they seem to want to control all other facets of our sells they might as well list and sell for us to..
http://www.Dman-N-Company.com
[ edited by dman3 on May 28, 2001 04:17 PM ]
posted on May 28, 2001 04:50:29 PM
DMAN That would be a great thing to do. Everyone send one CD any CD of your choosing something you don't listen to or need, to Ebay Signature required. Send the tape First Class in a padded mailer, With a form letter (to be written at future date)
This should give USPS a little boost to.
What a great plan now we only need a date and an address.
You have been very busy... Thanks for all of the research.
I have been reading the threads and news articles and there is one question that keeping popping into my head, if anyone knows....
Are sellers on Half required to give Half their SS# to get paid?
Since Half collects the $$$, and I assume takes a cut, is it a direct party to the sale? Does Half keep track of each sellers sales and send them a 1099 or some other form at the end of the year? Does Half report the $$$ disbursements to the IRS?? I am sure they keep records.
What makes me think that eBay won't get into collecting and dispersing $$$ is this quote from MW about eBay's lobbying efforts in Washington to block Internet sales taxes.
"In response to a shareholder's question that eBay has a ``significant lobbying effort for a company our size'' aimed at persuading Congress to keep Internet commerce free of new taxes.
If the government were to impose a special sales tax on e-commerce transactions, Whitman said she doesn't believe it necessarily would ``fundamentally change the marketplace on eBay.''
Whitman she added that she would *not* want eBay to be responsible for cataloging and reporting tax information on the millions of transactions it facilitates."
I can't imagine that eBay would want to catalogue and report tax information on auction sales either. Plus, there would be no question that it is no longer a venue, and that would open up all sorts of possible liability issues.
I believe that the one line eBay doesn't want to cross is the "venue" line. Accepting payments crosses that line big time.
From what I have read it is unclear how eBay is going to integrate Half into the main eBay site. It seems to me that this is one of those situations where sellers will have to wait and see how it evolves. There are too many possibilites, and with eBay it is difficult to anticipate what it is going to do, ever.
As for Mr. Webb... I have read everything I can find about him including his CV and I can't figure out his agenda.
posted on May 28, 2001 06:48:19 PM
OH OH !!!! Im a permanent alien I was born a earthling even though my grandparents came from another planet. http://www.Dman-N-Company.com
posted on May 28, 2001 07:23:03 PM
Reddeer: Now isn't that an interesting bit of information...only US citizens may sell on Half. I wonder why?
I re-read the news articles and it reads that "Half is going to be integrated into eBay" It doesn't say that eBay is going to be integrated into the Half format. The only reference I could find is the statement by eBay that it is easier to list on Half because you can use a barcode, but that wouldn't work on eBay because of the nature of the collectables and antique listings.
I still don't think that eBay is going to the Half format, or is planning on collecting and disbursing funds. Why would eBay dump the present format? Does ebay think there is that much "leakage" that it would have to spend millions on changing the fundamental way it works? Or the added expense, staff, and headaches of collecting and disbursing funds, and keeping records of millions of transactions? The cost to benefit ratio doesn't seem to be there for eBay to do this. But, on the other hand, it is eBay...
posted on May 28, 2001 07:51:40 PM
Ebay doesnt have to disburse funds directly. All they need to do is REQUIRE all sellers to use Billpoint like Amazon did with their payment system. Ebay then takes a bigger piece out of each sellers sales and shuts down Paypal.
posted on May 28, 2001 08:32:06 PM
Half.com doesn't require sellers to provide a SS#.
Some of Half's new categories such as Sports cards don't have a barcode for cataloging but they are uniquely identifiable (i.e. year, brand, series, card #). Amazon assigns their own internal code to all products, similar to UPC or ISBN codes. I think Half may copy Amazon in the future when offering products that don't have a barcode or lack a uniquely identifiable characteristic. However, I doubt eBay will try to catalog the products sold at the auction site. It'd be a logistical nightmare! All they seem to want is a transfer of the Half payment mechanism to eBay.
posted on May 28, 2001 08:34:36 PM
Smw ...... I guess they don't like us foreeners? I have to agree with you, there's not a chance in hell that eBay is going to incorporate ALL of the half.com features into their site. I'm not even sure they'll force it on to the storefronts as the only users that would be allowed to get a storefront would be US users. I do think that Blanche has a point though. It's quite possible that eBay will handle the storefront transactions and the payments and EOA notices will go directly through eBay via their messaging system. That too would cause shipping problems as most foreeners can't get DC for parcels going to the US. I can, but it's a VERY expensive option.
IF ebay was planning on forcing Billpoint on all of the *buyers* of their site, they would have implemented mandatory CC registration months ago. eBay knows that CC/Equifax verification would cause a major decline in new users, so that will never happen. They only have to look at Yahoo to see how that affected registration numbers.
No way will Meg let her registered user number drop. Never happen.
posted on May 28, 2001 08:44:32 PM
reddeer
I dont think they will force Billpoint onBuyers. I think they can/will force sellers to accept Billpoint. It would be optional for buyers. That is what Amazon does with their system. That would give ebay a piece of credit card sales for 90 percent of transactions which is the rate of our sales paid through Amazon Payments. Both AMazon and Billpoint are for more expensice than PAYPAL.
posted on May 28, 2001 09:12:33 PM
Susan ...... Thanks.
Zymo .... Ok, I see what you're saying now. I must admit I haven't looked at Amazon for ages, so I wasn't certain how they did things. I still don't think eBay will force ALL sellers to accept Billpoint, but I've been wrong before. I think there are other ways that payment services such a s PayPal etc. can get nuked from their site, without forcing Billpoint on everyone. I guess we shall see.
posted on May 28, 2001 09:58:56 PM
zymo ........ Yikes, I just had a look at Amazon. As far as payment options, it's almost a mirror image of Half.com. I pray that eBay doesn't go that route.
posted on May 28, 2001 10:01:42 PM
Not saying I would want ebay to get involved in my payment collections...but, wouldn't something like half or Amazon cut down on the deadbeat bidder problems some have?
posted on May 28, 2001 10:15:48 PM
Hello Neil, Susan and everyone. I really can't see how eBay would be able to handle the returned items themselves, even with this nifty new software developed by Swift Rivers but I'm still curious about Mr. Webb's interest in the company. I'm wondering if this technology could apply to a shopping cart-type situation to be used as an option (for a fee of course) to the storefronts.
I think the real clue to eBay's future direction is in their recent alliance with Microsoft. EBay is definitely going to extend its marketplace platform to include the business-to-business model and I'm not sure how that's going to effect the small seller or the small companies that provide auction tools. I think many of these smaller companies are going to be forced out because they won't be able to afford eBay's API which they will need to link to eBay's site. I don't think this is a good thing for those of us who wish to retain control over our business by being able to choose which service we wish to use. Here are a few articles about the eBay and Microsoft alliance:
QUOTE
"Ballmer and Whitman said that the pact would also let the two companies move into the corporate auctioneering business, where companies sold off large amounts of inventory. Ebay business so far has centered on the individual consumers to create the world's largest online flea market."
END QUOTE
http://www.timesofindia.com/140301/14info2.htm
I'm going to have to do some more research on Microsoft's "Hailstorm" to try to determine the impact, if any, this set of XML Web services will have on the Mom and Pop sellers. At least if we know what's coming we can decide the best course of action to take in order to survive. http://www.microsoft.com/net/hailstorm.asp
I hope everyone had a nice holiday weekend. It rained and stormed here all three days so it put a damper on the outdoor activities.
posted on May 28, 2001 10:53:01 PM
Amy ..... Not likely. Buyers on Amazon also have the option of sending a check or MO. Not only that, but unless eBay was to verify ALL users with CC/Equifax, it still wouldn't amount to didley squat. Get kicked off, come back the same day with a new email addy.
Blanche ..... I was reading an article in todays local rag about eBay that stated:
"But just about everyone in eBay's bright and sleek headquarters says calling it an "auction site" is very yesterday. - they like to think of it as an online Nasdaq for merchandise.
I hope you're right about the shopping cart.
The thought of eBay counting my money & only forwarding it every 2 weeks makes me sick.
posted on May 28, 2001 11:26:44 PMNeil, I can't really see them going that route with the auction format but I do think they may do it with the storefronts.
There's no way in hell they're going to get paid for merchandise that I paid for and own which I've sold in the auction format. They will NOT make any interest on MY money. I don't work for eBay and My customers are MY customers, not eBay's. If that ever comes to pass, I'll be gone. Since I don't use my credit card online, I won't be around as a buyer either.
#15 in the Usr Agreement:
"No Agency.
You and eBay are independent contractors, and no agency, partnership, joint venture, employee-employer or franchiser-franchisee relationship is intended or created by this Agreement."
Blanche
[ edited by bhearsch on May 28, 2001 11:29 PM ]
posted on May 29, 2001 12:01:25 AM
Reddeer..I didn't think so either, but it is a thought that was expressed in another thread and I wondered how others saw it.
I just can't see ebay in the collections business...the logistics would be mind boggling. Plus I think it would seriously endanger their venue status...something I think they are very cautious about putting in jeopardy.
I'm confused about their "partnering" with microsoft...just what will this give them (in terms a middleaged grandmother can understand please )
posted on May 29, 2001 12:43:02 AM
Blanche, thanks for posting that.
I think you guys are making assumptions and overlooking the obvious. The reason eBay is curtailing contact between buyer and seller is to keep transactions on eBay only. The argument is that sellers are either using their auctions to build up customer lists, or else completing transactions off site.
In the case of returns, what percentage of sales are we talking about? Perhaps one or two percent. Isn't it reasonable to assume that eBay will dump the returns right back in the laps of sellers?
If there is a problem, then eBay will provide the buyer with the seller's contact info (email address). Come on, think about it. What kind of customer lists are sellers going to build, if the only email addys they get are from customers returning items?
There's no reason to believe eBay will handle returns. Returns are the "dirty diapers" of the (for lack of a better word) auction industry. You can bet eBay will pass this job back to us sellers. Oh sure, like the irate customer who's screaming about his damaged or misdescribed item will want to sign up for your mailing list. Even so, it's no way to build up much of a customer list.
posted on May 29, 2001 01:15:47 AM"I believe that the one line eBay doesn't want to cross is the "venue" line. Accepting payments crosses that line big time."
Then Half.com can't be considered "just a venue", can it? eBay seems to have no problem at all taking the payments from Half.com customers and paying the sellers themselves....but then, if a customer is unhappy with the purchased item (or the purchased item never arrives) and wants a refund, Half.com just issues the refund and deducts it from the seller's account. The poor seller is out of luck (unless he paid for insurance OUT OF HIS OWN POCKET, in which case he might get reimbursed IF his insurance carrier decides it's a legitimate claim). Half.com is a rotten deal for sellers in many ways, useful only for selling 'lemons' you can't turn elsewhere or items you don't want to put any work into.
And would the state sales tax issue become like it is with Half.com---where, since the sale is technically THEIRS instead of the seller's, state sales tax is only collected and turned in for sales to buyers in Half.com's state, and no others? Anyone collecting and turning in sales tax is certainly not "just a venue".
If eBay wants any SMALL businesses to get Storefronts, I don't think they can afford to make their Storefronts automated like Half.com (where eBay takes the payment and gives the seller his "share" minus fees)---for these reasons:
1) Too many small sellers wouldn't want eBay handling the transaction, and wouldn't get Storefronts for that reason alone.
2) Half.com gets listings because sellers don't have to expend much time or effort listing something for sale. A Storefront listing is different---it requires a thorough description and photos, just like Auction listings do. How many sellers will do all that work, then let eBay take a big 'cut' and wait two weeks to get paid??????
3) Many buyers who refuse to give their CC numbers to anyone online or don't have CCs(and there are MANY out there) would be unable to shop the Storefronts at all, and the sellers would miss out on some sales. Big Business may not welcome money orders and checks, but small sellers sure do.
4) International shipping charges would be a NIGHTMARE to calculate, and would make automated billing for those sales almost impossible. A seller can state domestic shipping charges for an item in his Storefront, but international shipping costs are **all over the place**, depending upon which country it's going to, how it's going to get there, and how fast the buyer wants it. Half.com ONLY accepts payments from buyers with U.S. addresses.
5) A seller might have a "no returns/refunds" policy on some or all of his items, or might accept returns with certain stipulations (as jewelers do who accept returned diamond rings ONLY if they can determine that the diamond wasn't switched by the buyer, or sellers who ONLY take back unopened software). If eBay simply refers the buyer to the seller for a direct refund and the seller refuses, EBAY faces the CC chargeback, not the seller. And the seller's account can't be debited without investigating the transaction. Can you imagine the HEADACHE it would be for eBay to issue a refund to a buyer, only to have the seller claim the merchandise was SWITCHED to lesser quality (like the buyer of glassware who returns an identical piece of glass, EXCEPT WITH A CHIP, to the seller for refund)?????? Many of the problems that SELLERS contend with every single day would suddenly become EBAY'S problem, too, if they become involved in the transaction.
Half.com doesn't issue 1099 forms to sellers (1099s are for contract LABOR, not merchandise sales), nor do they send sellers any tax forms. Sellers simply count their Half.com checks as gross sales receipts for those items sold during the year, and use them in their business accounts records. It's doubtful that Half.com actually reports each person's sales to the IRS, since they don't have sellers' SS#s and don't send sellers a year-end record of gross sales that says, "This is being reported to the IRS" like bank interest statements or W-2s or 1099s. Actually, I'm surprised the IRS hasn't yet told eBay and Half to get seller SS#s, and report their gross sales every year.
Those who speculate that eBay might try to force their Storefronts to accept Billpoint could be right, but I don't think eBay will make it mandatory right from the beginning---I think they'll wait until the Storefronts get off the ground, THEN change the rules. Remember, Amazon didn't make THEIR payment system mandatory to sellers until their Auction, Zshops and Marketplace were established.
"but, wouldn't something like half or Amazon cut down on the deadbeat bidder problems some have?"
Amazon's payment system, since it isn't MANDATORY for buyers to use on their Auction, doesn't eliminate deadbeat bidders. People can still bid and fail to pay, since the bidder's credit card isn't billed AUTOMATICALLY at the Auction's close---the bidder has to initiate the payment himself (and register his CC). For fixed-price purchases (Zshops and Marketplace), the purchase can't be made until the CC charge goes through, and since there is no "bidding" involved, the seller can't HAVE a "deadbeat bidder" spoil a sale.
Yahoo Stores require that you have a merchant CC account, so Yahoo itself doesn't get involved with the transaction other than to automate the process. If the Store ships internationally, those shipping charges have to be coded in for each item and country (in your Store software), as does sales tax. Because the purchase goes through Yahoo's software (even though the payment goes straight to the Store's bank account, not to Yahoo), Yahoo knows how much each Store is selling and can charge their commission (when applicable).
If eBay tries to charge commission on each Storefront sale, the transactions will HAVE TO be automated and paid with CCs---and if the Storefronts have ways for buyers to contact sellers DIRECTLY to ask questions through email (necessary if you're selling anything other than standard new, mass-produced goods), there is potential for "unreported" sales just like there is on eBay's Auction. Storefront communications would have to go through eBay's system, and be continually monitored for evidence of off-site transactions. eBay can't afford to pay all the SALARIES required for "email monitors", so they'd have to implement some type of computer 'keyword' system to detect 'suspicious' emails. Yahoo's computer does a poor job of using 'keywords' to detect email topics, so I doubt it would be successful at eBay.
That's why I think the EASIEST way for eBay to have Storefronts is to charge a monthly fee, let the seller handle his own sales, and forget about taking commissions....but eBay doesn't ever look for the easiest way, they look for the most $$$$$$$$$.
posted on May 29, 2001 08:07:01 AM
Granee...I also considered the fact that half.com isn't a venue either...but then again neither is Butterfields and ebay owns that too. As long as those are subsidiaries of ebay, the fact that they are not venues wouldn't affect the parent company..ie., it doesn't make the parent company a venue. When half.com gets fully integrated into the ebay format I think it could affect the venue staus of ebay...unless ebay changes the payment process of half.
I agree with you the logistics of ebay getting into payments would be horrendous...plus Meg has stated that ebay doesn't want to get involved with collecting or reporting taxes.
Twinsoft...I think most of us agree that ebay is/has instituted many of these changes to stem "leaks", along with other reasons (spam, privacy etc). I just wonder if anyone has thought of the possibility that ebay is doing this to not plug the leaks of the small seller but to stop major leaks when the "big guys" arrive in force. From the article by AW, many of these big guys are seeing ebay as a great place to "harvest" customers (kind of a large scale version of what the little sellers are doing now with links to their web sites).
If ebay wants to make sure from the onset that they do not become the incubator for a customer base only to have that base "stolen" by the big guys, they need to have rules in place when the mass of those big guys come on board. And just like the little guy will scream if the rules don't apply to everyone, so will the big guys see it as unfair if these rules were to apply to only them.
I see a strong similarity between the ebay users upset about banner ads taking their customers (and their revenue) off ebay...and ebay being upset that the web links takes ebay's customers (and revenue) off ebay. Banner ads/web links are just two sides of the same coin.
posted on May 29, 2001 10:24:22 AM... if anyone has thought of the possibility that ebay is doing this ... to stop major leaks when the 'big guys' arrive in force.
Yes, that's true for sure. I know I am curious also about what changes the new storefronts will bring, what "integrating Half.com technology" means to eBay, and what the policies will be towards big e-tailers coming on board.
I suspect that at first, both storefronts for e-tailers and auctions will both be on-site, kind of like splitting eBay in half, but both under the same umbrella. Once the storefronts are working, eBay can manipulate buyers/sellers through site placement, fees, policies and other tricks.
I think what eBay is doing is illegal. They are a monopoly and engage in unfair trade practices. Can eBay censor content of ads, handle payments, dictate sellers' return policies, prohibit sellers from identifying themselves to customers, and still maintain they are "only" a venue? I don't think so. That is why I expect there will be one set of rules for auctions, and a completely different set for storefronts.
eBay wants their cake and to eat it too. The new rule about once an item is listed on eBay, the seller owes eBay a commission in perpetuity is not legal. The rule stating sellers may not include promotional materials (i.e., a business card) along with the shipped item is illegal. The rule about not taking your feedback to another site is illegal. Eventually these matters will be tested. It's no wonder eBay is moving away from auctions. They're so far over the line, it's only a matter of time before the feds rein them in.
posted on May 30, 2001 12:35:56 AM
Hi Amy. I'm sorry I couldn't get back sooner to try to explain the significance, IMO, of the alliance between eBay and Microsoft. First of all, I think eBay's storefronts are going to cater to the medium and large volume seller, not the BIG BOYS. Ebay will probably charge a flat fee for the use of the storefront platform and will charge some sort of commission on the items that are sold. They may even offer certain types of automated software for the storefronts like inventory management and listing tools, etc. that will either be included in the flat fee or offered for an additional charge. Another alternative would be to offer a sliding scale flat fee arrangement which will be dependent on the amount of items listed in each storefront.
I do believe all contact will be through their messaging service since they have a high priority of trying to keep all sales on their site but I'm not really sure about the likelihood of only using credit cards for payment due to the poor results of the BIN feature when they went to CC only. I'm sure eBay discovered the fact that many folks don't feel secure using a credit card online and they would be losing sales if they go that route. I guess the question is which is more important to them; losing sales due to a CC requirement or losing sales because of offline contact. Obviously, if they allow payment in the storefronts to be made by check and money order they can't totally control all contact between the buyer and seller.
I doubt that the storefront platform will have a huge effect on the Mom & Pop sellers as long as the items listed in the storefronts aren't going to be included in eBay's search engine. If they were included in the search engine, I think the effect on the small seller would be considerable.
I think the BIG BOYS are going to be coming in the next phase and that's where eBay's alliance with Microsoft comes into play. It's called a Web Services Portal. EBay's site will adopt some of Microsoft's software and Microsoft will make eBay's auction listings available on some of Microsoft's sites, like MSN, using eBay's API (Application Program Interface). EBay is facing a slowdown in the auction market and Microsoft needs support for it's dotnet technologies which will offer services and software over the net for a fee or subscription. This alliance will also allow both companies to enter into the corporate auction business, where companies sell off large amounts of inventory. EBay's API allows vendors to basically rent their software and technology instead of buying their own software and having to constantly update it every time eBay makes changes. They'll be able to hook right into eBay's infrastructure from their own site via their web browser.
Here is an excerpt I copied from one of the news articles:
QUOTE
"Microsoft will use eBay's programmable XML-based Web service to integrate the trading services of eBay's online marketplace into a number of its own Internet properties including the MSN network of Internet services, the Carpoint online automotive service and WebTV service. The integration of the services is currently planned to debut later this year and will be available in a number of the 33 international markets in which MSN currently has a presence. These services will allow consumers easy access to the global eBay trading community within localized MSN environments. For example, Carpoint will integrate eBay Motors as its used car listings and transaction engine, making it easier for Carpoint users to buy and sell used cars, motorcycles and car parts online.
eBay's trading services will also be integrated into Microsoft bCentral small-business service. Through Microsoft bCentral, small-business merchants will be able to extend their e-commerce capabilities by directly posting items for sale on eBay's marketplace from within the Microsoft bCentral hosted Commerce Manager service. In addition, bCentral and eBay will provide for full transactional integration between bCentral customer commerce Web sites and eBay, including the ability to determine status of listings on eBay and view transaction history directly from bCentral. Renting applications on a subscription basis."
END QUOTE
This means that both eBay and Microsoft will be charging a "toll" or subscription fee to use their web services and software. The problem that I see is the exclusive nature of this web portal because only the companies that eBay chooses to have access to their API and that can also afford it will be able to participate. Some of the small auction tool companies will be excluded and that will force us to use only the ones eBay accepts. Here's a quote from an analyst that supports this view:
QUOTE
Blank also noted that the relationship between eBay and Microsoft may be bad news for auction management technology providers, such as Auction Watch and Andale. "Those products are products for smaller companies to post items and handle inventory management," he said. "The integration of API could end up posing problems for them in the future."
END QUOTE
http://seattle.internet.com/news/article/0,2243,3851_710551,00.html
BTW, I did read that Andale will be purchasing the API but Bidder's Edge was not offered the opportunity to do so.
The following are a few quotes by Meg Whitman from various articles which reinforce my belief that eBay is concentrating their future efforts on the Business to Business platform:
A Quote from Whitman about the shift to the Business to Business platform:
QUOTE
"Rising sales of fixed-price products on eBay raise the possibility of the company becoming less focused on its virtual garage sale image and more on business-to-business sales. Whitman said the company is hearing from a lot of companies that manage excess inventory and overstock and expects that any partnering announcements in the next nine months will likely be in that arena."
END QUOTE
http://www.zdnet.com/eweek/stories/general/0,11011,2696803,00.html
A quote from Meg Whitman in an interview:
QUOTE
So, why make an aggressive, long-term projection at all? eBay's CEO, Meg Whitman, said that the company wanted to get the word out that they are not just about collectibles anymore; eBay has great opportunities ahead; eBay is going to grow very large in the next five years due to increasing sales of larger goods.
END QUOTE
http://www.fool.com/portfolios/rulebreaker/2001/rulebreaker010516.htm
Another quote by Whitman but I don't remember the URL
QUOTE
Meg Whitman, eBay's president and CEO, says opening the site to outside developers is crucial. "When a big company comes to eBay and wants to sell lots and lots of items on the site, we have difficulty providing all the tools that they need," she says. "We're turbocharging our API.:
END QUOTE
QUOTE
Whitman did acknowledge that eBay has evolved from a site for trading collectibles to what she claims is the most "liquid" marketplace on the Net. She'll get no argument from me there. She also hinted that companies handling product overstocks and liquidations have contacted eBay, and that partnerships with those types of companies were likely within the next nine months. Excess inventory was one of the main mantras of the B2B e-marketplace boosters a year ago, and it could be the next step in eBay's conquest of the B2B world.
END QUOTE
http://icq.zdnet.com/zdnn/stories/comment/0,5859,2701506,00.html
All in all, I think this next phase is going to cause the small Mom & Pop sellers some major problems. I believe we'll be forced to list only using the tools eBay provides which will take away some of the control we have over our business and will eliminate our ability to use the most economical methods. For instance, I host my own pictures on my web space which is included in the fee I pay my ISP and I make my own auction templates. I don't use the services of any third parties so I don't pay any extra fees when I list auctions. However, I doubt that I'll be able to continue listing in this way since I won't be in a position to "rent" eBay's API and my method of listing may no longer work on their site. The end result is my costs will increase.
I'm not sure anyone will be able to find our listings due to the deluge of the HUGE amounts of inventory being listed by the BIG BOYS who will be renting eBay's API and listing their items directly from their own websites via their own browsers using Microsoft and eBay's Web Services Portal.
And lastly, Microsoft has the much earned reputation of being a bully and the slogan "My way or the highway" is very fitting. My distrust of Microsoft plus the observation that both eBay and Microsoft have the "Big Brother" mentality doesn't give me much faith in my having a place or even wanting one in eBay's future. I hope I'm wrong but eBay's direction is clear to me and I don't see how it's going to benefit the Mom & Pop seller. I guess we'll all just have to wait and see.
I'm sorry for all of the links but I don't like to use quotes without showing the URL that contains the quote. Also, I think the articles will help you to better understand the alliance between eBay and Microsoft and allow you to come to your own conclusions regarding eBay and the small seller's future. I would be interested in hearing your opinion.
Edited to add: I forgot to mention that I think I've found out where Swift River's Returns Management Software fits in. It would be needed in the Web Services Portal phase.
posted on May 31, 2001 09:52:46 AM
Blanche..thanks for the response. Sorry I didn't answer yesterday but I spent the whole day at my daughter's babysitting and didn't have much time to get on the computer.
Ok..so what we are seeing is that ebay is kind-of setting up satelite "stores" (or hoping to) with larger businesses who themselves already (or intend to) have websites. These businesses will be able to list their merchandise on ebay and at their website with a search function link on their site that will bring up the auctions (or possibly storefront items) from ebay. They might be using API to list their items.
In some ways I can see this as being benificial to all sellers on ebay. Depending on the merchandise these companies will be offering there could be a crossover from that particular item to other similar items listed on ebay. It is possible the person going to that particular company's website has never used ebay before but once directed to ebay may utilize ebay to purchase other items...especially if there was some type of notice on the pages brought up by that search that lets the shopper know there are other items on ebay the shopper may be interested in.
This is currently done on the Disney auction site...there is a link on the side of the home page letting the shopper know there are thousands of Disney related items on ebaythat they can also search for. From a recent article in the LA Times (yesterday's paper), disney is doing very well selling their items on their auction site...selling things that never would have gotten into the hands of the everyday dealer of Disneyiana. Things like the huge sign that used to sit in the parking lot or a float from one of the main street parades, or a dumbo car from the ride in fantasyland. The article said Disney is searching their vaults and park storage for items that are no longer are needed..such as costumes, props, park items.
From the article it seems other movie studios are doing the same thing. One studio spokesman said they were able to sell costumes that before would have been bulk sold to costume companies...now they are selling them for better prices to individual collectors.
So, with some of these companies what will be coming on site is items that the individual would rarely have been able to buy before. With others it can bring on site people who would not have been shopping ebay. Admittedly, some of those are not going to be buying other things. Someone who is buying large lots of liquidated items for their business may not buy individual items for themselves...but they also might cross over to personal buying.
I think that it is logical that ebay would try to reshape commerce so that the general public does a lot of their shopping through the internet. That is a prediction that has been made for the internet. Up to this point individual businesses have not been to successful at accomplishing this but ebay may be placed to be the catalyst for a major revolution in commerce.
I think we are at the beginning of a major revolution in how commerce works. I think it is inevitable that ebay would be pushing in this direction. Not only is it logical for a company to be trying to enlarge the business beyond its narrow beginnings (antiques and collectibles), but I think it is kind-of a manifest destiny type thing for ebay to be moving in this direction.
How will it affect the current people doing business on ebay? Some it is going to hurt...especially those who are selling new, liquidated merchandise from major manufacturers that the companies themselves will be liquidating on ebay rather than through the current channels they use.
I don't think it matters whether ebay seeks them out or not because these manufacurers would have independantly considered moving their excess or outdated stock through ebay themselves. Ebay has seen the potential and is inviting it...again, something that would seem logical for a business to do. Ebay hears opportunity knocking and is answering the door, inviting opportunity in. Any business in the same position would be foolish not to.
But for all those this hurts there will be many more who figure out how to use this new commerce model to their advantage. We are on the cutting edge of something big and new, we will have to figure out how to be part of this.
I guess what I'm trying to say is that this is all inevitable. We, the early players in this revolution, are really the ones who fired the first shots. We started the revolution, we grew it, and we shaped the direction ebay is moving into. We were the ones who didn't stay with antiques and collectibles...we were the ones who saw the opportunity to move liquidated mechandise for better than bargain basement prices.
I think we have also started to change the "throw away" society the US has been for many years. Things that would have ended up in the trash years ago are being moved back into the merchandise stream...we are "recycling" some of the used merchandise that was tossed before.
The ebay management has seen the direction we were moving ebay to and is trying to grow it even more. Ebay didn't bring the new merchandise in, we did. Ebay didn't move from the narrow markets of antiques and collectible, WE did! WE started down this path, ebay is just refining it. Ebay didn't initiate selling automobiles, WE did...ebay is just refining it. We started selling real estate...it wasn't planned by ebay, but they have seen the potential of it.
I think the quotes you gave indicates that ebay wants to be the major platform for ALL internet commerce...from the garage sale, used merchandise, to the mainstream antiques and collectibles, to mainstream new merchandise...from the little seller such as you and I to the BIG players.
I also think that ebay could stumble...integrating storefront, fixed prices into the auction searches may hurt the auction format. Hurt the auction format for used items, especially the antiques and collectibles, and those items may move off ebay and back to garage sales and antique malls. The appeal the auction format has is the ability to move the merchandise at better price than one can get at real life outlets. But if ebay inadvetantly moves into fixed price much of this merchandise will not be listed.
Ebay has to be careful...otherwise they could destroy part of the business-the antiques, collectibles, used merchandise side of the platform. I don't think they want to do that...but they could accidently do it. This is new to them too and they are moving into uncharted waters. Hopefully they have judged it right and the result will be a thriving marketplace that works for the little sellers, the medium sellers and the big guys.
I'm praying they have it right! Because if they don't I don't think there will be another chance for anyone else to try and get it right.
posted on May 31, 2001 10:30:33 AM
Amy and Blanche-
My compliments for your detailed and well thoughtout analysis of the market, trends and future of Ebay and Half.com. Some of the financial analysts following online merchandising would do well to read and note your observations. For that matter, the eBay long term strategists should do the same!
posted on May 31, 2001 12:15:28 PM
Hi amy. Thanks for your response. I agree with you that this new direction was inevitable and it's also an extremely good move on eBay's part and will be a good one for it's shareholders.
I do need to clarify that I'm speaking from the point of view of a seller and buyer in the antiques/collectibles field and so my concerns are particularly focused on that area. EBay is going to concentrate at first on selling it's API to the large liquidators of retail goods and due to the downturn in the economy at present, there are a lot of them. This will benefit these companies by giving them an opportunity to recover some of their investment on the items in their inventory that didn't sell. I do think this will have an adverse effect on the smaller seller who has been buying these closeouts and reselling them on eBay. They simply can't compete with the original owner of the merchandise and the prices are going to fall even lower due to the glut in the marketplace. The supply will eventually exceed the demand and everyone but the buyers will lose. These sellers are going to have to find other ways to make money on the internet.
This would have happened anyway even without eBay's involvement because it's inherent in the dynamics of the marketplace and supply and demand determine the price as long as everyone is playing fair. Our current gas prices are an example of everyone NOT playing fair. The important thing, IMO, is the need to keep the playing ground equal so that the small seller isn't put in a more disadvantagous postion then he's already in due to his small staus. I'm not sure eBay is doing that.
My concern is with the Antique/collectibles category and is a selfish one since that has, and always will be, my only interest in eBay's site. I don't buy new items on the internet, I ONLY buy and sell old things. Have you ever gone into an antique mall and been turned off when you found it was loaded with fakes, reproductions, crafts, and new stuff? Most antique collectors will just walk right out and never go back. I no longer bother to stop at the malls that advertise crafts and antiques because I've found it to be a big waste of my time. Antiques and NEW just don't mix well. Those selling the NEW may benefit from the mixture but those selling the antiques will not. This has always been my concern with eBay's increased move into retail goods and the B2B platform and I see their Microsoft alliance and the Web Services Portal as a HUGE push in that direction. I think this move will harm the Antiques/collectibles market on eBay because the site will become known as a place to buy new stuff cheap and folks that are looking for antiques or vintage items don't go to places that sell new stuff.
Have you looked at eBay's new home page design? http://www.ebay.com/preview/previewhome.htmlThe emphasis is on NEW merchandise - office supplies, laptops, etc. Take a look at the FEATURED ITEMS which include diet pills and computers. I have the impression that the auction platform is going to become a smaller and smaller part of the site along with the antique and collectible categories and even if that doesn't happen, the collector's won't be able to find us or will just be turned off by all the new stuff and will leave. The emphasis on auctions, person to person trading, antiques, & collectibles is definitely decreasing and unless eBay finds a way to separate the antique/collectibles auctions from the new retail stuff, with a separate search engine, I have my doubts that these areas will flourish.
The storefronts may be the only way for the smaller seller to compete in this "new eBay". I think eBay's storefront will cater to the small seller, especially those folks that don't have their own websites but want the exposure of listing items on a home page which can then be linked from their auctions. I'm not sure whats going to happen to the larger independent sellers who already have their own websites but they will most likely be forced to purchase an eBay storefront since they aren't going to be in a position to rent the API.
The choices one has regarding the running of their business, IMO, are becoming more and more limited and this concerns me the most. My concerns may be unfounded and this next phase, the Web Services Portal, may be good for the small sellers but I wouldn't want to take that chance. I think the wise course of action for the small guy is to continue to sell on eBay if you're doing so successfully BUT to start looking around for other opportunities NOW. I think this next phase will be fully inplemented in 12 months and will be here before we know it. Also, eBay has already started integrating the new technologies necessary to support the next phase so I'm sure we can expect to see some major "glitches" with their system.
Just some food for thought. I don't wish to be an alarmist but it never hurts to be prepared.
Blanche
[ edited by bhearsch on May 31, 2001 12:21 PM ]
