kml
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posted on January 5, 2001 04:35:19 PM new
If Yahoo has 6 million auctions, with their new price structure they could afford to lose 50% of their auctions and still make a huge profit. Assuming that the average price paid per item is $1.00 that is $3 million a week in revenue that they are not making now. When they lose users they also will lose page views. Because they cannot sell enough advertising as it is now they do not need those page views, therefore, it only makes sense for them to implement this policy. In conclusion they can lose 50% of their users and generate $156 million in additional revenue each year.
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gravid
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posted on January 5, 2001 04:51:32 PM new
I can see the logic there. I think 50% is a terribly optimistic number though. Try 15 to 20% after 3 months.
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amalgamated2000
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posted on January 5, 2001 05:02:12 PM new
I think the average listing fee will be far less than $1, but that's beside the point.
I would guess that maybe a quarter of the listings are "junk" -- stuff they do want to get rid of, however that may be defined.
And of the remaining listings, I think it's clear from the posts here that they will lose far more than 50%.
I think that an initial loss of 75% of the listings is pretty conservative.
But that's just the beginning. Once those listings are gone, it will be much harder for buyers to find what they are looking for. Before long, many buyers will bypass Yahoo because of the small number of listings.
Then you have a situation in which people are paying for listings that are generating less sales then the free listings generate now. The economics of the situation will kick in, and many sellers who want to stay on Yahoo will find it just isn't profitable. The number of listings will continue to shrink, the number of bidders will continue to decrease as the selection dwindles. It's a downward spiral and I don't see any indication that Yahoo has any plan that would avert this.
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kml
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posted on January 5, 2001 05:20:25 PM new
Here is the problem as I see it. Auction sites need to make money. No site can be free forever without a way to make money. Up until now auction sites made money by large corporate advertising. We know what is happening to that. So If an auction site gives the listings free but charges for ehancements then both the user and the auction site win. I look for a site like that. At the end of the day I think it gives the seller a choice on whether they would just like to list an item (for free)or actively try to sell it.(for a nominal fee for inhancements)
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tentwentytwo
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posted on January 5, 2001 05:37:44 PM new
Kml- read the "respected" analyst's reports I've posted on other threads. The assumptions you make are way out of the realm of probability, and the assumptions the ANALysts make at 1/5 your level are also.
The number of auctions posted on Yahoo always included infinite relists because it was free. That is kaput now. Noone will relist the same item 15 times just to not sell it. A logical estimate of the amount of items that are relisted contantly in relation to all items listed is 30-40%. That's 30-40% POOF almost immediately FROM THE SELLERS REMAINING. The average listing fee generated will not be NEAR $1, you can also bet on that. And a conservative estimate of the % of sellers leaving because of this, and listing even on eBay where at least there's a CHANCE to sell is 30%. This site will probably lose 60-70% of its listings in short order. As for later, unless they find a way to get bidders here, KAPUT. And if they ramp up "customer service" and their software like they say they're going to do, after about 6 months their fees may not even be enough to keep the site open.
kml
posted on January 5, 2001 04:35:19 PM
--------------------------------------------------------------------------------
If Yahoo has 6 million auctions, with their new price structure they could afford to lose 50% of their auctions and still make a huge profit. Assuming that the average price paid per item is $1.00 that is $3 million a week in revenue that they are not making now. When they lose users they also will lose page views. Because they cannot sell enough advertising as it is now they do not need those page views, therefore, it only makes sense for them to implement this policy. In conclusion they can lose 50% of their users and generate $156 million in additional revenue each year.
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dman3
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posted on January 5, 2001 05:58:09 PM new
Here is how I see it no body listing on yahoo can go on listing auctions and getting no bids and pay fees the Idea here is to make $$$ if I make a few they can have a % if I dont make them where will they come from No one has a money tree and its not legal to print your own.
I gave yahoo one more good surf this week over all catagories they have less then 2% getting bids most Items with bids ended with one bid most auctions with multiple bids were reserve auction the reserve was not met on so even though bidding over all just under 2% actual cash changeing hands after you subtract reserve not met auctions and dead beats is less then 1% of sales makeing any money.
do the math its simple people wont list week after week month after month at even .20 per per listing if the bidding rate dont go up you move 50% of the people from yahoo and bidding will only go down 50%.
people will go where the excitment and yahoo wont be it. if online auctions were haveing a popularity contest they couldnt get enough votes to lose because they could gather enough backs to enter it.
http://www.Dman-N-Company.com
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kml
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posted on January 5, 2001 06:12:28 PM new
Perhaps the only reason Yahoo ever started auctions was to add page views to sell more advertising. Now that it has dried up why shouldnt they lose some listings so they can cut some of their costs. I think they felt they had nothing to lose by adding fees.
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dman3
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posted on January 5, 2001 06:19:55 PM new
well acording to what I heard in there chat forms since 50% of the listing I have on yahoo are not high priced quick sellers Me and hundereds others like me are nothing so in a sense they will lose nothing.
a guy that sells a few hundered sports card a load of music memoribila and toys for a few dollars each is nothing to them so in a sense they are loseing nothing.
http://www.Dman-N-Company.com
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outoftheblue
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posted on January 5, 2001 06:40:25 PM new
kml
I think that your estimate of $3 million a week in revenue is extremely generous.
>>>Two days after he issued a note cheering Yahoo! Inc's (NasdaqNM:YHOO - news) new fees on its auction service, Merrill Lynch Internet analyst Henry Blodget Friday drastically scaled back his estimates of how much money the fees would generate.
``We believe that the net revenue added in 2001 will be closer to $16 to $30 million, rather than the $30 to $80 million we initially estimated,'' Blodget wrote in a research report.
He said the original estimate had resulted from the assumption that the fee would apply to all Yahoo's auctions worldwide, when in reality it will only be imposed on U.S. auction listings.
Yahoo has been hurt by the slowdown in Internet advertising, and has come under pressure to diversify into other non-advertising revenue streams. On Tuesday it said it would start charging a fee of between 20 cents and $2.25 on its auction listings.<<<<<
As you said, do the math.
From reading this it is pretty clear that the reason for charging fees is not because they want to encourage "Quality Items". They are just attempting to boost a sagging bottom line. I hate being lied to...
[ edited by outoftheblue on Jan 5, 2001 06:45 PM ]
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kml
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posted on January 5, 2001 07:56:10 PM new
I stand corrected. Anyway I use several sites. Most of them are free. I like one the best but it still needs to catch on. I think between ebays outages and yahoos fees that this will be the best time new auction sites will possibly ever have to gain new users. I only wish that users would find a new site and put some of their items there. Then give it at least 30 days. Lets face it, if users will not try to stick it out for at least that long then I am sad to say things will probably stay the way they are. Besides no one says they have to leave ebay or yahoo to do that.
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lovepotion
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posted on January 5, 2001 08:01:52 PM new
Yahoo auctions was making money. Every month i had a featured listing bill somewhere between $70 and $120 and I was going at it pretty conservatively.
If I have to pay to list I can assure you and them I wont be able to afford that AND featured auctions.......
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kml
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posted on January 5, 2001 08:04:00 PM new
At the end of the day it is not so much how much you pay rather what you receive for your money. They are charging but not giving anything back for it.
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lovepotion
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posted on January 5, 2001 08:08:29 PM new
I guess we can all give the fairmarket network a try again. They are all free and you place an add in one and it gets seen in almost alloftheir network sites. I put an item up at lycos and saw that item for sale on alloy, msn, excite, xoom etc etc.
The bid rate is horrendously bad. But I have a feeling many yahoo sellers will slowly migrate there...........they are all free to list on.......
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rnrgroup
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posted on January 5, 2001 08:44:52 PM new
The FACT is that Yahoo does NOT have 6 mil auctions - they have approx 2.2 million. If they go ahead with this stupid listing fee move they will very rapidly go down the tubes. Oh well - we tried, what a waste of time and effort that was! - Rosalinda
TAGnotes - daily email synopsis about the Online Auction Industry
http://www.topica.com/lists/tagnotes
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molly001
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posted on January 5, 2001 09:00:58 PM new
kml - mind sharing what other sites you use that you like?
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kml
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posted on January 5, 2001 09:12:14 PM new
Hi Molly001. I like Lowestbids. I know they had a few problems with their bidbar in the beginning but they have made some design changes. Anyway what I like the most about this site is that their buy it now feature can be done by the seller at anytime and for any quantity while still allowing bidding to go on. I also like the fact that I can be live in my auctions and accept a bid price whenever I like. I would tell you more but I do not want this to sound like a commercial. Also I believe that they will not need to charge for their auctions because they make their money by allowing sellers to buy banners on other sites advertising our auctions.
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molly001
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posted on January 5, 2001 09:18:12 PM new
Thanks much KML! Don't worry about sounding like a commercial. There's a thread started (Yahoo alternatives) where we've been throwing around ideas of where else interested parties can go.
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kml
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posted on January 5, 2001 09:24:34 PM new
Molly001 I quess your right. I have seen Ebays commercials and well..... Lets not go there. LOL LOL
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molly001
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posted on January 5, 2001 09:28:17 PM new
kml - LOL!!!
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