Many years ago during my consulting career I was hired to help the New York Stock Exchange answer the question of who their customer really was.  For example was it the buyer of stocks, the sellers, the press etc.    After considerable exploration and thought we concluded, with the ultimate agreement of the Stock Exchange Management, that the customer was the seller of stocks.  For without the people selling the instruments they had no market.

It has occurred to me that a similar situation exists with regard to eBay.  Is their customer the buyer or the seller.   Clearly they operate in such a way that they view their customer as the buyer, as all the rules of the entity are skewed in favor of the buyer, and we can say with many instances of first hand knowledge that whenever there is a dispute they favor the buyer.   The recent change in the eBay rating system is further support of their view that the buyers of items on eBay are much more important to them than the sellers.

In the current monopolistic enviornment in which ebay operates it is easy to see how they view the buyer to be their customer.   However, with each passing day there are more and more options for sellers.  While eBay still owns the market, with what we would guess to be a 95% or more share, the time is not too distant when others will begin to invade this territory and appeal to sellers of merchandise.    The buyers will follow the sellers as without the products there is no marketplace.

We do not believe that eBay has throught through this strategy, and certainly hope they will address this key strategic issue in the near future for their own good.   Given what we believe to be a very unhappy group of eBay sellers, we suspect that if the strategy does not change in the near future, they will see an even greater erosion of the market.   It is well known that the number of eBay buyers are down, and we know of many sellers experimenting with the secondary markets.   Whey the eBay management can not make the bridge between happy sellers and a good marketplace is well beyond our grasp.   However they probably have two or three years to address this issue.   After that time the market will be ripe for significant new entrants and there will be an erosion of their sellers who see more "customer friendly" enviornments in which to sell their goods.

Lets hope the people who advise eBay on their strategic direction can think more broadly and address this issue...before it is too late.

A regular feature of the Con$ign-net blog is to review some of the specific items that have sold on our site over the past two weeks.   Hopefully this will generate ideas for prospective consignors relative to items they would consider selling:

 

Autographed baseballs

Antique ladies hats

Audubon Plates and Prints

Cloisonne items

Copper cookware

Exercise tapes

Longchamp handbags

Lladros

Opera glasses ( antique)

Political Memorabilia

Sterling silver jewelry

Samovours

Toy Soldiers

Tiffany & Co Crystal

Waterford Crystal

One of the biggest problems we Power Sellers have is the non paying bidder.  They result in a lost sale, often which could have gone elsewhere, and extra time needed to follow up on them and ultimately get our fees back.   In the current declining economy there are more of these NPB's than ever before, and it is an area eBay needs to quickly address.

The current policy is they get three NPB strikes and then are taken off the system.  This is not fair to the sellers.  I strongly believe they should be allowed TWO strikes at best.  One assumes they made a legitimate mistake, which is followed up by appropriate disciplinary notices from eBay.  Then if they do it again they should be taken off the system, not given yet another chance to dupe a well intentioned seller.

If they are addressing this subject there is no sign that this is happening.   I hope other Power Sellers will join me in starting this crusade as it is unconscionable that they are not solving this problem .   It certainly will send a message that they are trying to service and help their sellers, without always favoring the buyer.

Over the past several weeks we have noticed a major shift in the way people buy on eBay, which we believe reflects the bad economy in which we are all involved.   While the President claims this is simply a slowdown and not a recession ask any eBay Power Seller if they are experiencing changes in the patterns of buyers.   From our perspective there are three major things happening that tells us at Con$ign-Net that the nationwide slowdown of the economy has reach the eBay market big time.  Specifically:

1. There are many more watchers per successful auction than ever before.   Whereas in the past we could count on an item selling if it received five or more watchers during the course of the auction, this is no longer the situation.   Our judgment is that this number is now closer to ten, as people are doing more shopping around to ensure that they get the best deal possible.

2.  There are fewer bidders competing for items, which results in lower final pricing.   The dream of the bidding war for an item among two or more people is now the exception rather than the rule.   Most items tend to sell with one or two bids, rather than 3-5 as was the situation several months ago.

3.  There are more questions than ever before about an item as prospective bidders want to be sure that the item meets all their specifications and is exactly as described in the listing.  It is now commonplace to get a few questions about every item being considered, whereas only a few months ago questions were rare as people take the listing at face value.   Whether this is a function of the maturation of the buyer or an increase in the distrust of the sellers is not clear, but there definitely is a change.

A major challenge to Power Sellers in the coming months is to see how they can adjust to the changes in buying behavior , so the eBay marketplace can be restored to the vitality that it used to have only 6 -12 months ago.