I started thinking about all this a few weeks ago, when I wrote about the battle between PayPal and Google Checkout for holiday shopping payments. I checked in with two people who spend all day talking to those who sell on eBay: Ina Steiner, of AuctionBytes, a newsletter for online sellers, and Scot Wingo, the chief executive of Chanel Advisor, a firm that helps big companies sell through eBay and other sites.
I started by talking about payments, but it became clear that the big story was how sellers have become disenchanted with eBay for a litany of reasons. The picture was dire:
“EBay’s relations with sellers over the last few years have deteriorated and are, at best, poor right now,” Mr. Wingo said.
There has always been griping about eBay, of course. But now, Ms. Steiner said, sellers are just not making as much money there. The biggest problem is that eBay charges a fee simply to list an item, and then it charges a second final value fee if the item actually sells. Ms. Steiner said that the percentage of items that do sell is going down, so sellers feel they are wasting money on listings. Sellers also complain about big fee increases for eBay Stores, the fixed-price section of the site.
Amazon has been winning friends with its Marketplace service, which lets third-party merchants list products on its site at no charge. Merchants pay about 15 percent of the sale price only for completed transactions. That is actually more than the combination of eBay’s listing fees and final value fees, which average about 12 percent, Mr. Wingo said. But sellers like it better.
“Amazon is less risky, so you can pass on the lower risk to buyers in the form of lower prices,” Mr. Wingo said. He noted that Amazon’s buyers on average are less bargain-focused than those on eBay, making for a less cutthroat environment.
Mr. Wingo said that fear of fraud has also made eBay a less attractive environment for sellers.
“When you talk to people about eBay at a cocktail party, fraud is one of the first things they think about,” he said. “Whether that’s right or not, eBay needs to fight that image aggressively.”
Ms. Steiner adds that scams on eBay have become more sophisticated. And at the same time, eBay has eliminated antifraud protection for people who make purchases with any method other than PayPal.
Beyond selling on Amazon, online merchants are increasingly finding that they can strike out with their own Web sites. The reason, of course, is that Google’s AdWords and search engine can now attract customers looking for what they sell.
“EBay has gone from the channel of first resort to the channel of last resort,” Mr. Wingo said. Two years ago, he explained, sellers would list all their products on eBay and just put the remnants on their own sites. “Now sellers will put something on their Web sites — that has become the channel of first resort — then Amazon, then eBay.”
Channel Advisor works with companies that are in the 1,000 top sellers on eBay. Two years ago, 99 percent of their business was on eBay, Mr. Wingo said. It’s down to half now.
EBay’s overall financial results don’t show mass defections, although they do show that the company’s growth is slowing. The total number of listings fell by 5 percent in the third quarter, according to research from Citigroup, and is on track to be up 5 percent, year over year, in the fourth quarter.
But under those stable numbers are some big shifts. EBay’s listings are growing for autos in the United States and in the United Kingdom, South Korea and many other countries. But in October and November, the number of listings in the United States, other than autos, fell by 8.3 percent. (Germany, eBay’s second-biggest market is mixed. Listings fell 14.3 percent in the third quarter but jumped 13 percent in the last two months, Citigroup wrote.)
There have been reports that eBay is looking to reduce its listing fees and raise its final value fees. Given the depth of the anger against the company, I wonder if that will be enough.
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