Amazon, Etsy, eBay and the eCommerce Land Grab

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With much doom and gloom pervading comment about eBay, it’s easy to forget that ecommerce is still a frontier. The IMRG forecasts year on year ecommerce growth (in Britain, Europe, America and Asia) all the way to 2012. And even the very real threat of recession in the UK and US doesn’t seem likely to dent that. Even though eBay is languishing, Amazon has proved that the old guard can still find accelerating growth. The ecommerce land grab is still underway and there’s everything to play for.

With that in mind, an article from Y Combinator (a respected venture capitalist firm) called ‘Startup Ideas We’d Like to Fund‘ makes for interesting reading. Not only does the piece prove that there’s still money out there for winning ideas but the comments regarding online auctions will be familiar to eBay sellers:

“Online auctions have more potential than most people currently realize. Auctions seem boring now because EBay is doing a bad job, but is still powerful enough that they have a de facto monopoly. Result: stagnation. But I suspect eBay could now be attacked on its home territory, and that this territory would, in the hands of a successful invader, turn out to be more valuable than it currently appears. As with dating, however, a startup that wants to do this has to expend more effort on their strategy for cracking the monopoly than on how their auction site will work.”

Y Combinator thinks that eBay’s dominance can and should be challenged. But it’s the belief that only the monopoly stands in eBay’s favour that should be most disquieting. eBay doesn’t have brilliant marketing, a superior product or a vibrant culture of innovation to protect it from an onslaught, it would seem.

One company that certainly can’t be criticised for lacking innovation is the crafts marketplace etsy, which has been in the news this week. Chad Dickerson, a former Yahoo executive, is joining etsy as Chief Technical Officer. Much of the coverage, mindful of Yahoo’s current difficulties, make much of this being a blow to Yahoo. And while that’s true, it’s also a huge boost for etsy: they’ve hired a talented operator from a big firm and that can only a be a vote of confidence. Even before this, etsy has been encroaching onto eBay’s territory and doing it with style, inventiveness and generating not a little admiration.

What does all this mean? Whilst eBay is struggling to find a little bit of ecommerce growth, expending a great deal of energy tinkering with feedback, search and fees, Amazon is successfully taking a good chunk of the fixed price action and attracting professional eBay sellers. Auctions are, it seems, up for grabs and yet eBay isn’t defending this flank and is concentrating on the faster growing But It Now business. Critically, eBay seems to be losing the battle: Amazon is growing faster than ecommerce and eBay isn’t. As for etsy, they’re a shining example of a specialist site taking some of eBay’s action and looking at a bright future.

eBay Inc. might be enjoying great results from Skype and PayPal but meagre growth in the marketplace business should be sounding alarm bells. eBay’s challenge is not just defending existing territory but squaring up to the frontier again and aggressively joining the land grab. Regrettably nothing in the Q2 results, report or investor call suggested that was the plan.

Dan Wilson is a writer and consultant and the bestselling author of ‘Make Serious Money on eBay UK’.

22 Responses

  1. I have great hope for Etsy. There are some 200,000 art listings on Ebay and these artists need a solid place to go….a place where they’ll finally be appreciated for the uniqueness their wares. I see no home for them on Amazon – their shriveled little art section is well hidden and contains little more than 500 entries, most of what are not works of art. Etsy is a place for handmade items…and I feel art would fit there very well and eventually attract serious art buyers. Hopefully, Etsy will recognize this and perhaps make a place for the disillusioned artists of Ebay.

    Ebay – the old Ebay we all knew is dying…and I do not see a new one rising from the ashes. Present management needs to be replaced with a good solid, experienced management team. I don’t see that happening and so they stubbornly wind their way down that road to oblivion.

    http://www.ACEOart.net

  2. Ebay is on the down and out because they have alienated too many sellers as well as buyers. Who wants to be part of an organization that has open contempt for sellers. Buyers on the other hand feel alienated because they don’t trust ebay to help them if they should encounter a problem from a purchase. It’s a loose / loose situation all around for ebay. They need to go back to their roots of being a giant flea market. You used to be able to find anything and everything on that site. It was the joy of finding an elusive treasure that made ebay what it was. Now that’s all gone, replaced by cheap garbage from China selling at 99 cents with a $25.00 shipping cost, and boatloads of wholesalers trying to push the same type of stuff you can pick up at your local big box marketer.

  3. I think land grab is the wrong way to look at it – it’s more about people offering customized solutions for different categories. Media is pretty much a fixed price marketplace; traditional eBay auctions are great for collectibles. Etsy has a fixed-price marketplace for handmade goods. StubHub and TicketsNow in the States, and Viagogo in the UK, do fantastically well with tickets to sporting events. Dawdle caters to video game sellers, and we support all the older systems, and let people buy and sell hardware and accessories as well.

    At Dawdle, we let people use buy it now at the seller’s fixed price or name their own price. The vast majority of people choose to accept the listed prices and just buy immediately; what we generally find is that buyers will name their own prices for items not in stock.

    I’m not sure a model like ours would extend to antiques (so Tias is safe) or handmade goods (ditto Etsy). We’ve been very successful in targeting our niche, and while we’re always open to suggestions from our sellers for new categories to expand into, we think we’re pretty good just growing in gaming. So I just wanted to drop my two cents – the eBay auction model isn’t dead and it’s not going anywhere soon; it’s just that there are people who can build niche marketplaces for specific categories and be successful. Nothing wrong with that.

  4. Good Report Dan… but it’s worse than you think… check it out!

    “EBAY LISTINGS PADDING = STOCK MANIPULATION!” – Wed Jul 23, 2008 7:47 AM PDT

    “MAJOR PROOF OF EBAY COMMITTING “STOCK MANIPULATION” BELOW!!! DUMP,
    DUMP THAT STOCK ASAP!” – Wed Jul 23, 2008 7:58 AM PDT

    https://www.newsvine.com/_news/2008/07/14/1664258-ebay-beats-tiffany-in-court-case-over-trademarks?threadId=312961&cmt=2259428#c2259428
    INFAMOUS EA! COMMENTS
    __________________________________________

    “UNDENIABLE PROOF OF EBAY FRAUD AND MOST IMPORTANTLY… STOCK MANIPULATION!”

    https://www.marketwatch.com/news/story/tech-stocks-shake-off-ebay/story.aspx?guid=%7B9C510CBF%2D8C4A%2D4D53%2D8BB8%2DED1B0B9AB551%7D&dist=TQP_Mod_mktwN#comment425970

    Avenger Posts 4-7!
    ___________________________________________

    “HOW LONG CAN EBAY STAY AFLOAT?!”
    COMMENT BY User 220016
    POSTS: Jul 22 11:53 PM AND Jul 24 10:13 PM

    https://seekingalpha.com/article/86191-paypal-merchant-service-major-source-of-growth-for-ebay

    ___________________________________________

    “eBay drops on TV analyst’s comments”

    https://www.bloggingstocks.com/2008/07/24/ebay-drops-on-tv-analysts-comments/1#c13352521

    AVENGER POST: 7-24-2008 @ 10:26PM

    Signed,
    Infamous Ebay Avenger!

  5. well from a plebian sellers point of view
    ebay is good as it ever was, money goes in the bank, stock goes out the door

    egg heads and theorists can prattle as much as they want

  6. Very interesting, Dan. I agree with #2 that ebay has alienated many sellers as well as buyers.

    Recent events have really hammered home how important it is for sellers not to depend on ebay for all their income, and to diversify elsewhere, whether it be Amazon, their own website or other niche / specialist sites.

  7. Hello Dan 🙂

    The splintering of the market into Ebay UK, Germany and US (then all the other satellites) in terms of search is where Ebay have gone wrong with the Antiques and Collectables.

    We for instance, have to list on .com (to gain the traffic), which means no 30% Powerseller discount and no UK traffic.

    As we have a success rate of 2 to 1 on .com versus .co.uk, we have to list over there.

    Ebay is also extremely expensive to list on, our most profitable times are during promotions, when we can dust off the shop stock and bring it where it can be found.

    And this is Ebays biggest problem, they want us to list on the site and then they hide our listings…

    Hide it from other countries (unless you pay a fee).

    Hide if from main search (shop inventory).

    Hide it behind “Best Match” (which can be tweaked by Ebay at the drop of a hat, so you have no idea if your item is going to be seen from one moment to the next).

    Hide it on a page after sponsored links (which drives traffic off Ebay).

    So what is the main problem for us with Ebay?

    VISIBILITY

    This was Ebays greatest strength at one time, they made our items visible.

    Now they seem to have a policy of:

    INVISIBILITY

    for listings.

    Ebay is fantastic when it provides visibility, everything else should be secondary to this.

    If Ebay could understand this, they would once again be a growth company (in my opinion).

    Ebay was built on the idea you could find anything.

    Now it seems a struggle to find anything if users reports are to be trusted.

    Give us visibility and we will give Ebay money.

    Simple as that.

    More visibility, more money.

    Oh, and lower the cost of visibility.

    Mark

  8. got to agree with mark
    visibility is the magic word
    its hard work these days trying to ensure your items are found

  9. With all the bitchin going on, you have to wonder who is benefiting from the ebay changes. – are they too busy trousering all the cash they can get their hands on before ebay changes things again???

    Take another viewpoint… ebay is great when stuff sells. Nobody cares about the fees, because things sell. With people spending less, those unsold fees start to add up – FAST. Sellers get pissed off and pointless ebay clones like ebid, tazbar and the like, experience a false dawn. Niche sites like etsy, craigslist etc start to grow, as they always would, and should. Amazon forging ahead doesn’t mean ebay is done, they are two different platforms, yes, with the obvious overlaps. I just asked 9 people (real people, face to face!) 1) where would you buy a book online? And 2) where would you buy something online for your hobby? 1) Amazon 9/9 2) ebay first port of call, followed by niche sites and forums.

    I get the impression eBay is about 2 years behind the times.. all the tinkering ( yes, it is tinkering) was needed back then. What is needed now is a way for sellers to cut their risk in placing items on the market NOW.

  10. I do not see this as a land grab, but rather a people and loyalty grab.

    With a new CEO in place, eBay seems to be systematically alienating buyers and sellers alike.

    Current eBay leadership currently behave like they have no understanding of how their company was built, how it works, or how it survived. As a result of huge fee increases, forcing payment processing, system changes, and policy changes are motivating both buyers and sellers to imigrate to other opportunities. Add the absolute worst customer service on the Internet to the equation and there is a huge opportunity out there for a new auction start up.

    Substantial listing growth on smaller websites, reflects member dissatisfaction with the current path eBay has chosen as sellers seek to escape the mess that eBay has become.

    eBay should offer their marketplace for sale since they seem to no longer be motivated to build based on the past success and are in the process of tearing down the very foundations upon which they became a multi billion dollar global market place.

    If a well financed company with a recognized name jumped into the auction business offering a well designed marketplace and real customer service, it would be the last nail in the eBay coffin.

    Google would be a likely player. They are well financed, they are a recognized brand with worldwide reach, they are the leader in search technology and they have their own payment processing system in place.

    If a company with the revenue resources like Google entered the auction business, eBay would be hard pressed to survive a year.

  11. its dead simple why google or some other big fish dont try and steal ebays
    business, ,
    it would take billions to get even close to ebay
    the easy route to an online auction is to buy ebays shares

  12. If Google, Microsoft, etc. had wanted to get into online auctions they’d have done it years ago. Sorry folks it ain’t going to happen anytime soon, get use to it and quit waiting.

  13. I would love to see a ‘ well financed company with a recognized name jump into the auction business’. Is it going to happen? Probably Not.

    Should ebay be concerned that so many sellers would jump ship, if the right competition challenged them in the auction business? Damn right.

    At the moment ebay have got sellers over a barrel, and every little pointless change, feedback alteration, useless response from support and general fluffing around will eventually cause the barrel to break.

    If the ostriches at ebay could get their heads out the sand they would see that the emperor has no clothes on – if you know what I mean.

  14. I would guess that ebay suspend more sellers a month, than other auction sites have total members

    they are not going to be overly worried at this moment

  15. #15

    Generally when a company does start to worry, it’s too late.

    So by the time they do start back tracking and trying to apologise, the damage is done.

  16. best part of 10 years I have listened to the doom and gloom end of ebay stories

    and yet they continue to make silly money, they have and make more money than many nations,
    now they even give away silly money in discounts if that sounds like a company in peril the end of the world is truly nigh

  17. what pees me off immensely with the latest ‘tinkering’ : read complete balls up with ebay, since this silly crap with the not being able to leave a neg for a buyer scenario dawned, ive had ONE neg and ONE netural, result? now im officially a bad seller and with over 1,200 transactions in total since starting on ebay , the goons that call themselves management dont know the half of how many reputable seller who have been shat on from a great height. The draconian meaures will only polarise contempt against the changes and people WILL leave ebay, if there’s nothing to buy, then there’s no buyers – an empty shop window won’t sell jack. In the current recession and we ARE IN a recession dispite the bullshit that the govt. tell us about it being just around the corner .. (whats around the corner for the one eyed twat is a bloody large baseball bat) is that people wnat bargains, not cheap tack shit from china with over inflated shipping and ‘shipped from london’ when you try and modify the search. Ebay arent stupid it knows the land of chopsticks make it a lot of money on balance so it wont be killing any geese that are laying its golden eggs any day soon for sure.

    if i found a viable and credible alternative to ebay id be on it like a shot and closing the bay account down period, but until then ….

  18. Facts are,we are in a Credit Crunch which may well be a full blown recession. In these sort of times, Ebay should be coining it hand over fist.After all,for years it has been THE place to go for a bargain.Whereas,Ebay’s figures are pretty average,and listings are probably falling.
    At the very time that they should be shouting the benefits of the site from the rooftops,they doing the opposite. Management seems to be on a colossal introspective bender.of endless fiddling and faddling,and interminable micro-manipulation of the whole thing
    History is full of millions of companies who took their eye off the ball,and are now extinct. Ebay seems not only to have its eye off the ball ,itdoesn’t even seem to know what game its playing…

  19. Very good article and astute observations. eBay has started to turn away from the “auction” game in an attempt to stave off Amazon and in doing so they have left themselves open for “specialty” and “niche” auction sites to make inroads. Etsy is just one of the bigger and more well known sites. When Bidville was still around they were a great niche site for sports memorabilia although they didn’t realize what they had and tried to market themselves as an eBay style auction site. It contributed to their demise.

    In the future I think most big sites will be operating with a fixed priced format while auctions will have shifted to collectible “niche” and “specialty” auction sites.

  20. Aust eBay company investigated for fraud
    One of Australia’s biggest eBay companies has gone into liquidation.

    https://www.abc.net.au/news/stories/2008/07/29/2317684.htm

    The Australian Securities and Investment Commission (ASIC) says the Queensland-based company ebusiness-supplies appointed an external administrator last week.

    Wish our SEC was as good as Australia’s ASIC…. Alot of Americans are going to get burnt by eBay!

  21. #21 All those buyers who purchased from EBS were being ripped off before they bid, all of EBS’s listings broke Paypal’s PreSale rules and yet all had a big Paypal Protection Logo’s in the listing. No wonder a fund has been set up to bribe/refund those buyers, the legal implications are mind boggling.

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