...just plain backfires. All the more reason to be nice. Good night, everyone!

I'm finding more and more of this perspective online. Makes for very interesting reading.

Trouble at eBay

Written by Josh Catone / June 3, 2008 9:00 PM

"I think [fixed prices] will disappear online, simply because it is possible - cheap and easy - to vary prices online." That was MIT Media Lab's Patti Maes in 1999, at a time when eBay's business was booming and auctions were seen as the future of ecommerce. Flash forward 9 years, and BusinessWeek is today calling online auctions a dying breed, Nick Carr is wondering if auctions were a fad. Indeed, the fixed price ("Buy it Now" only) format is beginning to dominate eBay, and the company has taken recent steps to push fixed price even harder. But the death knell of the online auction format is not eBay's biggest problem -- no, that would be the small exodus of sellers from the site.

eBay's business is still booming -- the company reported net revenue of $2.19 billion in the first quarter of this year, up 24% over the same period last year (that includes revenue from Skype, PayPal, and other eBay shopping businesses) -- but there are signs that trouble may loom in the core business. Fixed price BIN-only listings now account for 42% of the gross merchandise volume on the site, and the fixed price format has been growing at a much faster rate than auctions over the past 6 years.

In and of itself, that's not a huge deal. eBay is making moves to put more emphasis on the BIN-only format to guard against the slipping popularity of web auctions -- if auctions do turn out to have been just a fad, eBay is making preparations to reinvent itself as a traditional fixed price marketplace in the vein of Amazon. What should be of greater worry for eBay, though, is the number of sellers dissatisfied with moves the company has made over the past few months -- many made in part to push BIN pricing. Without sellers it doesn't matter which is the dominant pricing format.

eBay would argue that the number of active users has actually increased year-over-year by about a million. eBay's measurement of "active users," though, includes any user that has "bid on, bought, or listed an item in the previous 12-month period." So recent changes won't catch up to that measurement for awhile.

Sellers at Odds with eBay

We reported in February about a seller revolt at eBay that caused eBay listings to dip as much as 13%. It's impossible to tell if the boycott by sellers was the actual cause of any drop in total listings, but the larger point is that sellers felt the need to organize a boycott at all. That boycott was specifically about two policy changes at eBay that increased back end fees on auctions (which favors the BIN-only pricing) and changes to the feedback system that now prohibits sellers from leaving negative feedback for buyers.

But those aren't the only changes eBay has made recently that have put the company at odds with some of its most prolific sellers. One of the biggest was the switch to "Best Match" as the default search results view in a large number of categories on the site earlier this year. Many sellers railed against the switch, with some saying that the search algorithm had caused their sell through rates to fall dramatically. eBay's site wide sell through rates appear to actually be at the lowest point in many years.

That could be due to the company's recent partnership with Buy.com, who has flooded the site with fixed price listings (around 500,000 at any one time), with an abysmal sell through rate hovering around 5%. The Buy.com deal is indicative of eBay's slow transition away from its core auction format toward a more Amazon-like marketplace. But it comes at the expense of sellers in the categories in which Buy.com sells, many of whom have seen their sell through rates and visibility hurt by the flood of Buy.com listings.

At an eBay presentation to shareholders in January, the company showed off a prototype of a new split screen listings page that splits BIN-only listings off from auction listings and pushes buyers toward accepting a BIN. Though only an idea that eBay is considering, the potential design change has some sellers worried.

"The sellers are leaving, with each new change you can see more posts on the eBay message boards where they are posting they are done, closed their eBay stores, ended their listings and are off," eBay seller nancybusinraleigh, who has been selling on the site for 10 years, told me. "And since eBay is doing the 'death by a thousand cuts' approach, this will continue." Nancy herself has stopped selling on eBay in favor of her own storefront.

Competing with Amazon on fixed price sales may be difficult for eBay. Amazon's sales increased 37% to $4.13 billion in the first quarter, eBay's net revenue from its "Marketplaces" (primarily eBay and Half.com) rose 14% to $1.26 billion. And if sellers are really leaving the site, then there is a potential that eBay could see a drop in volume. Fewer seller options, no product reviews, and no "Amazon option" that offers free shipping could spell trouble for eBay when attempting to compete seriously in the fixed price market. Major deals with large retailers like Buy.com notwithstanding, alienating the small sellers and auctioneers who helped build the site is probably not a smart move for eBay.

It's probably been around awhile, but it still made me laugh when I saw it, so I thought I'd share. It said...

Lord, let me be the person my dog thinks I am.

Also posted at msn's money page.

EBay's unfair discount program

Posted Jun 20 2008, 04:25 PM by Kim Peterson

EBay sellers have been looking suspiciously at eBay's Buy.com store for a while now, and with good reason. There are currently more than 500,000 items for sale in this one store, and Buy.com appears to be offering all of them as a "buy it now" option. 

The fee eBay charges a normal seller to list this many items is astronomical. But Buy.com can afford it because EBay has started discounting fees for large sellers. And that's got small sellers worried they're being pushed out. The S.F. Chronicle has the details: Sellers get a discount if they have sales of $500,000 a month and a feedback score of 4.9 out of 5.

EBay shares fell more than 3% today to close at $28.17.

It's unclear what level of discount eBay will give its biggest sellers, and some have already wondered if Buy.com gets to list for free. Why else would Buy.com be selling a single AA battery for $7.99 with $6.98 shipping?

EBay has for years promised sellers an even playing field, according to the terrific AuctionBytes blog. Former CEO Meg Whitman has reportedly said that "EBay has to be a level playing field. That is the core part of our DNA, and it has to be a part of it going forward."

Now, eBay says the policy changes will encourage good customer service. Is it fair? Absolutely not. Smaller sellers are being pushed out, and many are finding better opportunities on their own Web sites or at rival auction sites. EBay wants its sales to skew toward bigger, fixed-price listings, and the vendor discounts are one way to reach that goal.

I found this on msn's money page, thought I'd share.

EBay's changing auction strategy

Posted Jun 03 2008, 12:56 PM by Kim Peterson

Auctions are disappearing on eBay and being replaced by fixed-price item sales. BusinessWeek says that's due to the changing needs of the consumer, who thinks bidding is too much hassle. Nope. Don't blame the bidder. EBay is doing everything it can to choke the life out of its own auction business -- and that's a big gamble.

Yes, time is precious. And yes, there are people who would rather "buy it now" on eBay at a higher price than spend days in a prolonged bidding war. About 42% of eBay auctions have a "buy it now" option, a figure that has grown 22% in the last year, according to BusinessWeek. EBay shares are up nearly 1% today to $29.59.

There's no question that fixed-price auctions work. But eBay is sacrificing its core auction business to fuel fixed-price transactions. It implemented fee changes this year that favor sellers with fixed prices and who sell more expensive goods. The sellers that helped make eBay what it is today -- the ones getting rid of baby clothes or old records -- are being pushed to the fringe. Add to this a new rule that limits the feedback sellers can give buyers, and it's no wonder they're abandoning eBay for other alternatives.

One seller told BusinessWeek he decided to leave eBay after realizing his annual fees would go to $180,000 from $120,000. He's going to start selling on his own Web site. He may not get eBay's traffic levels there, but he won't be paying eBay-caliber fees either. 

So where does this leave eBay? It clearly wants to be more of an Amazon-style retailer, with more dependable transaction revenue rather than relying on wild-card auctions. It expects to increase global listings that way, and said that its listings improved after implementing the pricing changes. It's paying a lot of attention these days to its PayPal unit, which is seeing great traction as a payment option on numerous Web sites. (PayPal brought in $582 million in Q1 revenue, a 32% increase year-over-year).

The traditional auction business is becoming an afterthought at the company, and honestly, who can blame eBay for trying to move beyond its roots? Its share price has tanked since the end of 2005, and a new strategy was in order. So yeah, things are changing at eBay. But don't blame buyers who are short on time and patience. EBay is doing this all on its own, and deserves total credit for whatever success or failure lies in its future.

I find it funny that I knew immediately it was you that reported me, yet the times when you're reported, I imagine you having to search down a long list of those you've wronged in the past, trying to determine who's responsible for the misery you're experiencing this time.

I wish you the very best, for two reasons. Firstly because I can be a better man than you and wanted only to make peace, which you refused. Secondly, because I don't think you've ever experienced the very best in life, and for that, I genuinely feel sorry for you.

It's a monster flick from 2006 made in Hong Kong. I guess it broke international box office records in its genre. If you've seen it, let me know what you thought.

I was looking for one that could combine my concern for drunk driving with my support of carpooling, and I finally found it...