TameBay Morsels 05/04/09

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Scot Wingo’s thoughts from Catalyst UK: why is UK e-commerce growing at 15%?

Skype for the iphone has been downloaded more than a million times in two days.

If you’re thinking about a free Vendio store, The Brews News has an interesting review. (Vendio’s own blog has some more information too.)

And a reminder for UK readers that Royal Mail prices go up tomorrow

Disclosure: Vendio and ChannelAdvisor are both advertisers with TameBay.

21 Responses

  1. Read Mr Wingo’s piece – don’t agree with his genralisations about DSR’s & best match though.

  2. what I dont understand is why Mr Wingo,s opinion seems to be of so importance,

  3. Re. Scot Wingo report.

    DSR – They stink, I agree with that. eBay should point out to buyers that 4 is not good, it’s Shi*te.

    Free Shipping – Couldn’t give a monkeys if eBay goes free shipping across the board, I’ll just whack it on the BUYITNOW price + the extra % in FVF’s, however I would like the wording changed to “Shipping Included”.

    Advertising – AdBlock Plus is the answer, a national seller campaign should be launched encouraging every seller in the UK to use it.

    Search – If you have a product people want Best Match is a gold mine, I love it and so does the balance sheet.

    Auctions – Boring, even more boring is the fact that business sellers are using private ID’s to get free auction listings, just how many households have more than one ‘kin brand new bath to sell that they accidently purchased by mistake. PATHETIC.

  4. Ah the 99p free listing joke…

    Why did the person that thought that gem up not see the abuse coming?, and more importantly why did the folk he pitched the idea to not see it?

    ( I am presuming they didnt see it coming as I refuse to believe anyone is daft enough to do it deliberately)

    Auctions, boring?.. I think not! perhaps if you sell boring things that you have 200 of, it is boring but if you sell one offs it is the only way to go.

  5. I can see how DSR’s stink for you Whirly but from my point of view they are more of a non issue and if anything a positive, as all my star scores are very high and could help to influence a purchase.

  6. Free shipping – will kill off 99p Auctions / force sellers in collectibles to have higher start prices. For may this will just mean they stop selling as their selling cost base will increase significantly

    Board_surfer is bang on – Auction format for one off’s is the only way to go on ebay – this applies generally to collectibles which is already suffering from poor growth – can only see this hastening the demise as what was a key sector for Ebay if they apply free shipping there.

    DSR’s – believe this is very much work in progress. Agree with the principles, but the implementation is lamentable. Descriptions for star ratings need to be clarified / reworded, + buyers made aware about what they actually mean

    SNP – no comment by Wingo because of the client base involved, but of fundamental concern to small / medium sellers who are far more exposed to the effects a couple of negs e.t.c. could have. Couple this with near non existent customer service, which means you can’t get any issues resolved + you have a major disincentive for small to medium businesses to continue selling

    Search – when you can find items ebay via Google shopping, but can’t find the same items in Ebay Search, clearly Best Match / New Search is not working for either buyers or sellers. Again the objective is fine, the execution is poor.

    Ebay has had no effective communication with the small to medium seller since their conference last year – and that was not pleasant. Whilst they are rushing headlong to embrace diamond sellers, it’s a foolish business that turns it’s back a significant proportion of their existing client base

  7. @8 “you can find items ebay via Google shopping, but can’t find the same items in Ebay Search”. Do you have any examples of this?

  8. Sue

    Interesting point – I guess it depends on how you define small, and just what proportion of your existing client base you are willing to lose. I’d suggets over the next 4-5 years Gold sellers and possibly Titanium will fall outside Ebay’s target seller profile

    I’m intrigued by the strategy, and not in the least bit surprised that their CFO tried to play down the importance of Sell Through Rates.

    Whilst the logic holds that an exponential growth in listings will lead to a reduction in STR’s, they can hardly argue GMV’s can be ignored – but for Paypal, the last Qtr’s results were dire – in fact so bad they have since tried to emphasise the potential of non-core business

    Combining Buy’s STR as a yardstick for diamond Sellers (ceratainly Titanium Powerseller discounts, Ebay will need to grow listing volumes exponentially just to maintain their GMV as higher margin small to medium sellers leave …..and that presupposes that Diamond Sellers can maintain their existing STR’s – by no means a given when a market becomes saturated

    Ebay needs the Diamond sellers more than Diamond Sellers need Ebay – and that is not a healthy position for any business to be in.

    In the current economic climate, it’s surprising Ebay would wish to disenfranchise a group of higher margin clients, but that’s certainly the route they have gone.

  9. Playing Double Devil’s Advocate (and if such a role doesn’t exist it does now!):

    The usual cliché is that 80% of the business comes from 20% of the customers.

    But eBay is a sort of food web and the proportion of the money in the eBay/PayPal system that recycles (generating more fees as it does) is likely to be much higher among small sellers than big ones, so there would be a multiplier effect involved.

    eBay also needs at least to consider whether it is in danger of losing its essential eBay-ness, its Unique Selling Proposition and whether it is in danger of wandering out of a niche in which it is dominant into a wider online marketplace in which it would be just one of many big players.

    As I say, just playing Double Devil’s Advocate.

  10. Hi Sue – John Jantsch’s article is basically an extension of the 80/20 rule, and Ebay’s move is more radical than this. Shedding 10% of your least profitable clients is fine but leaving yourself with 10% of your client base is another proposition.

    BTW I don’t think Ebay has been looking to direct existing clients to a strategic partner do you? Looks more like death by a thousand cuts.

    From the Analysts day a few weeks back it’s clear Ebay do not know how to re-stoke the dying fire of their core business, and have concluded that it’s better to strategically reposition. Ebay’s pursuit of the liquidations market is window dressing – the strategic move is to focus on becoming the internet’s #1 provider of payment processing / credit services, and acting as a shopping portal / advertising medium for established large retailers.

    Despite or maybe because of the negative press surrounding Ebay’s core business, Ebay has failed to realise its immense embedded value. I can think of no viable alternative site which has sufficient eyeballs to generate a true auction market – it is the rarest of things, a unique selling point to potential clients with huge barriers to entry.

    Scott has advocated creating “Ebay Classic” ie to spin the auction / collectibles out of the main Ebay site. It should be sold off – maximise the return to shareholders before the asset withers to nothing owing to the current lack of corporate focus and strategic direction.

    What will happen when “Ebay Classic” is established and floated? Who knows, but at least it would get management focus and a chance to thrive, rather than the near certain suffocation by neglect we see at present. Even better Ebay would be able to achieve it’s goal of reducing it’s client base overnight – and painlessly too!

    Ebay’s lack of strategic focus on its core business should be of real concern to all – with the advent of Diamond level sellers and new merchant API, Ebays “bottom 10%” will get ever wider.

    It’s also a high risk strategy – loading all your eggs into fewer and fewer baskets is not a direction I think many businesses would be pursuing in this economic climate.

  11. Sue – are you suggesting that there is a direct negative correlation between size of seller and customer service?

    Occasional sellers who have no need to be concerned with continuity of business maybe, but sellers who rely on Ebay generally give a good service…. and I suspect I’m not alone in having received very poor service from established Gold+ PS’s who can afford not to jump through hoops because the SNP policy is not skewed against them.

    The marketplace will be successful as long as sellers provide the goods buyers want, at a price they are prepared to pay, and deal with customers in a professional and courteous manner.

    Sorry I do not equate big companies with good customer service – Ebay itself is a prime example of this, and we can all list big corporates who fail to deliver on this score….

    The key thing for buying experience is being able to find what I want, which is becoming increasingly more difficult on Ebay – either because Sellers of products I want to buy have gone, or worse still the new search experience fails to return items that are available.

    Interesting debate!

  12. “But too often, I think they’re hung up on the small stuff like “OMG I want to neg this NPB”, rather than actually running a business. ”

    Good one – I got hung up on having a throughput of about 100 higher value txns a month, and that it would only take a couple items to get trashed in the post and my 100% positive feedback ebay business could easily become a casulaty of SNP.

    With no recourse to a viable customer service unit, and worse still a T&S dept which seemed happy to accept there would be “Dolphins” I just said “so long and thanks for all the fish” and started growing other distribution channels.

  13. #14 – Good points well made (as ever).

    However, it is not just the 20p flat fees that stick to eBay/PayPal as the money goes round.

    FVFs of up to 10% and PayPal fees of up to 3.9% (and once in the system there are no credit card fees to deduct) do add up to a rather impressive vigorish.

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