Why can’t eBay be more like Amazon?

This week saw both eBay and Amazon release their Q1 figures, with what’s becoming a sad norm: eBay underperforming, Amazon bucking ecommerce’s downward trend. Mark T. posted the obvious question in our comments: why?

“Let me get what I want”
So to answer Mark, here’s what I think: shopping on eBay is too damn difficult.

eBay is the only site on the internet where you can be told off for changing your mind. If I’m buying from Amazon, I can

  • put an item in my shopping basket and take it out again
  • get halfway through checkout and decide I don’t want it
  • go to pay, and decide I’m not going to
  • pay, and then decide I prefer something else, and cancel in the click of a button so long as my item hasn’t been dispatched yet.

I can’t do *any* of that on eBay. eBay should join the 21st century, and get a shopping cart and a buyer-initiated “cancellation before dispatch” process, before all buyers quit in frustration and go somewhere else where it’s easier to shop.

Every time I suggest eBay needs a shopping cart (and yes, I say it a lot 😉 ), a seller tells me that it wouldn’t work because buyers would leave things in their carts, and those items would be stuck in limbo. Funnily, Amazon Marketplace has made this work just fine: the item isn’t yours until you’ve paid for it and someone else can still buy it from under your nose. So in fact, you’ve got *more* incentive to buy now, *more* incentive to get on and check out – rather than doing the eBay thing of popping that BIN item on your watch list and forgetting about it. If we made it easier for people to shop, they would shop *more*.

Of course, a shopping cart would require one other change to the eBay system: the much-needed addition of instant payment required for multiple items. It’s utterly ridiculous that this hasn’t be implemented, meaning that those of us who commonly sell multiples have to sit on unpaid eBay orders for sometimes weeks at a time. If eBay needs an incentive to make these essential changes, think about the extra PayPal-funded sales that multi-item IPR would bring in.

“But you will change your mind”
The easier shopping = more shopping rule also applies to order cancellation. Buyers – whether we like it or not – have a legal right to change their minds. The current system of UIDs undermines that right. It’s too complicated, it’s too easy for either party to get wrong, it relies on clear and accurate communication when tempers may be getting frayed. And it should be gotten rid of. Lets replace it with:

  1. a buyer-initiated “cancellation before dispatch” process: until the seller has marked the item dispatched, the buyer can cancel their purchase. The PayPal payment will be refunded, the eBay fees (all of them, including featured) will be refunded, and the item will be automatically put back “into stock” – either added back into a live multi-item listing, or if on a single listing, made available for relisting to the seller.
  2. a seller-initiated “cancellation before payment” process: if the buyer hasn’t paid after a stated amount of time (3, 5, 7 days…? could be seller-selectable) the seller can just cancel the sale and get their fees back. Without arguments, without negative feedbacks, without “disputes”.

And for both of these, I would envisage saying that as no transaction has taken place, no feedback can be left by either party.

eBay will doubtless worry that some sellers would abuse such a system to avoid fees. IMHO eBay are so obsessed with the idea of fee-avoidance that they’re ruining the site because of it. They can see which sellers are potentially abusing the system easily enough, and they can take action against them. And the rest of us can quit feeling like we’re in some Kafkaesque nursery school where childish bureaucracy rules, and get on with buying and selling.

“You’ve got everything, now.”
In last week’s earnings call, John Donahoe said that eBay is outperforming ecommerce in general in every selling format it has, apart from auctions. Fixed price revenue is up 12%. Classifieds revenue is up a massive 23%. Auctions, on the other hand, are down 20%.

So what is eBay doing? Encouraging sellers to list auctions. On .com, auctions’ insertion fees are 15c; BINs’ are 35c. On eBay UK, private sellers’ auctions starting at 99p or less have no insertion fees; BINs are 40p each if you don’t have a shop. On eBay.fr, auctions are 15c and the headline price for BINs is 50c. eBay Germany’s vastly complicated fee structure largely favours auctions. Sellers across all eBay sites are being pushed to list auctions. But (except perhaps in a very few specialist areas) the novelty of online auctions has worn off: buyers don’t want to sit around for a week to see if they’ve “won” – they just want to get on with their shopping: eBay’s own figures show that.

“What eBay does best” is a phrase that’s used often to back up arguments, and I’m going to use it again here. Meg Whitman said that auctions were what eBay does best. John Donahoe seems to think that “secondary market” retailer clearance is what eBay does best. I disagree. What eBay does best and always has done is to provide a marketplace, for everyone, for everything. Amazon, Ebid, Bonanzle, dozens of start-up wannabees: nothing comes even close to eBay’s breadth of inventory, nothing comes close to the huge variety of sellers from the mother selling her kids unwanted toys to the biggest high-street names, nothing, in fact, comes close to eBay.

eBay should stop being an auction site, and reposition itself as a shopping site. Sellers should be encouraged (financially) to list in the formats that work: the fixed price ones. eBay should teach buyers to think of eBay as the site where you can buy everything, right now (not a site where you can “win” that thing you want next week, if you haven’t bought it on Amazon in the meantime).

“I’ve already waited too long”

Given the figures that JD announced last week, I don’t think it would take much to turn eBay around. Not much except, perhaps, some rather radical thinking: to get out of the auction mindset into the shopping mindset. eBay seems to be moving in the right direction – easier returns and multi-variant listings being two such recent moves – but they’re doing it too slowly. We’re due another announcement of site changes in September; rather than the fiddling for the sake of something to do while Rome burns we had this month, let’s next time see some really radical change that will make eBay a great place to shop again.

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Comments

Great post Sue, agree with all your comments. My very real concern however is that JD and ebay management team seem to be so far removed from the real world, that they cant see the wood for the trees. I have seen many good idea’s suggested within this forum, but I can’t think of one that has actually been adopted. When I started trading I focused solely on ebay, moved into Amazon and finally my own shop. I have now reversed my priorities 1st my own shop, 2nd Amazon and lastly ebay. Much as I would like to abandon ebay completely I recognise that it’s still a viable market, but it’s becoming less important with each and every pointless change, lack of customer support and for many of the reasons outlined in your article. Keep up the good work

Glenn • 27th April 2009 •

Thanks Glenn. I must admit that I frequently complain that eBay is being designed, developed and run by people who don't seem to use the site. I know that sellers don't have all the answers (however much we think we do) but I think we have input to give... which is why I give it. many good idea’s suggested within this forum, but I can’t think of one that has actually been adopted The "continue shopping with this seller" link you now get when you've bought an item, a.k.a. "Biddy's button" on the PSB, was my idea. I believe it was three years from first suggestion to implementation. I never give up ;-)

Sue Bailey • 27th April 2009 •

Sue, Great post and I mostly agree with you. I would say the auction format has life in it, but less so from businesses selling new goods. Perhaps because you have less "casual/consumer sellers" (i.e. me) on Tamebay you don't realise how much we sell on auction. Mostly because we sell second goods and stuff we have no idea what it's worth. All the rest of your points I couldn't agree with you more. On many items fixed price works best (DVD/Books/Cheap rubbish) but on lots of other things (old model ipods/consumer electronics/laptops) we sell on auction because we don't know what the true value is, and an auction in an efficient market place definitely gets a better idea of the real value. When you're not a business, you'ed often rather sell (say a second hand laptop) for £500 on auction, than not sell it at £550 fixed price. Business know better how to price items, where an auction should allow the item to be sold, even at a lower price. I think their is definitely place for auctions, it just shouldn't be forced where not needed (either by pricing or by eBay). Another way of doing this would be allow BIN to stay longer, say until the day before the end of the auction of 80% of the BIN price had been reached. (or some such)

Adrian (vzaar chief geek) • 27th April 2009 •

Yep I remember Biddy’s button Instant payment for multiple purchases is the one I would really love to see.

Glenn • 27th April 2009 •

I think that eBay simply wouldn't be eBay without the auction format. Big/small/medium businesses are swamping eBay with fixed price listings and have been for the past few years, this is having a negative effect on the performance of auction formats. eBay have tried to address this with the likes of best match and changing the fee structure but IMO they will never and should never walk away from the auction format. I think eBay could better spend their time finding ways of treating genuine businesses as such and not assuming we are working from a leaky garage with rusty doors on some dodgy estate. I would love to get a visit from eBay, so that they can see the "real" people out there trying to promote eBay as the place to find good and varied deals. Us business sellers are eBays biggest yet most under-used asset.

Pete • 27th April 2009 •

IMHO Ebay should scrap anything that isnt an auction Ebay is an auction site ( stop anyone in the street and ask them what ebay is.), if you want a shopping site, I believe one of the best is called Amazon. just because auctions do not fit in with you or your customers way of selling/buying is no reason to scrap it all together.

board_surfer • 27th April 2009 •

It's not about me or my way of selling - it's about eBay's own figures. Take the auctions out of the equation and they'd really be doing rather nicely. When I have a line that doesn't sell, I scrap it, rather than going round telling people that that line is what I'm all about and it's wonderful (even if they don't see it). But I quite deliberately haven't said "get rid of auctions": if they work for you and your lines and your buyers, then by all means carry on.

Sue Bailey • 27th April 2009 •

“But you will change your mind” I totally agree with your two suggestions for cancellation here, I never understand why seller's get so het up about cancellations. I would so much prefer someone to cancel before they pay and I send it, rather than having the hassle of having it returned for refund. And yes, instant payment for duplicate items would be excellent. a new petition for a new Biddy's Button perhaps? How about a Biddy's Bigger Buy Button?

Lynne • 27th April 2009 •

I think sellers get het up because it costs us money, and because eBay tell us we should, Lynne. But yes, I'd totally rather have canx before despatch. In the past when I was selling clothes, I used to get people ripping seams and such, so that they could tell me the item was damaged and insist on returning it - even though I've *always* advertised "no quibble returns". Breaks my heart.

Sue Bailey • 27th April 2009 •

Sue, Bang on the money as usual. Easy shopping is the key but I also think the auction format doesn't work so well anymore simply because the market works so well - i.e. for most NEW items there is no chance of a bargain - the efficiency of the market means that getting a cheap price (the promise of which justified the hassle and time spent waiting for the auction to close) is just not very likely. So, I would advocate both a simple selling, buyer friendly selling mech such as you propose and a more obvious segregation for second-hand/refurbished/returns items. How that would work is Ebay's problem - but Amazon do it great! I too do most of my business direct from my own site (growing well), do a goodly bit on Amazon (growing a bit) and less and less on Ebay.

Robin Horsley • 27th April 2009 •

Quite frankly as a pro seller I hate auctions simply because the sell through rate is too slow. The one and only reason I still use them is for visibility. Without auctions I'd have no way to get my products easily and reliably to the top of Best Match. I think of them as adverts for my fixed price items and a necessary evil.

Chris Dawson • 27th April 2009 •

Evil eh - harsh but fair.

Robin Horsley • 27th April 2009 •

You are right on the money. Sellers wouldn't mind the cancellation before shipping so much - if they knew they were not gong to be penalized financially and time-wise by eBay's process like they are now. And, eBay, it might encourage faster shipping! Here's the thing. And it is sad. eBay should have been implementing a shopping cart 10 years ago - when the rest of e-commerce did so. The fact that they didn't 5 years ago is ridiculous and the fact that it is STILL not on the site borders on malfeasance for an e-commerce venue. The latest word to leak out is that they are looking to implement a shopping cart in the next 12 months. THAT says a lot about eBay management right there. That kind of management attitude explains why eBay is down and Amazon is up. No business can sit on its fat/sassy behind for 10 years and expect to be a leader in its field. Amazon has continually innovated. Even when Wall Street punished Amazon for not posting the kind of profits it wanted to see, Amazon pushed ahead with its innovations. eBay dutifully follows the recommendations of Wall Street analysts (who, like eBay management, don't shop or sell on eBay either) and so eBay sits here flailing away - hurting themselves, their sellers and the buyers.

Tim • 27th April 2009 •

What I want to know is why noodles aren't more like pizza! :smile:

Jimbo • 27th April 2009 •

I think the reason Amazon is growing faster is because it is from a lower base. If I developed a new Cola drink I think I could get a higher year on year growth figure than Coca Cola. This does not mean that Coca Cola have had their day.

Hereford United Fan • 27th April 2009 •

eBay's key competitive advantage was that it was a place you could find items you could not find anywhere else -- the one of a kind, unique, person-to-person sales are what eBay offered that no one else could touch. While they also created a marketplace which offered lots of new items, especially from large, new-goods sellers, this in my opinion was not their strongest suit; it was and still is where Amazon could absolutely pummel them. The only reason for the auction format to exist, is when the price of an item is otherwise not known. It really does not have so much to do with "winning," as it has to do with "letting the market figure out what something is worth." For one of a kind, unique items, the auction format is beneficial, for precisely this reason. That said, fixed-price format offers a lot of conveniences for buyers, and for shrewd sellers is a great way to list as well. Frankly, I never found the format wars that big of an issue either way, provided I could delineate which I was looking for as a buyer when I did searches. My opinion: Last year, eBay in their hubris not only greatly overvalued their value proposition to the sellers, they completely missed the mark as far as what their unique differentiator is for their best buyers. I was once both (sold $5-$10K / month there), but now I'm either, and I have no intentions of going back. I think there are hundreds of thousands of sellers/buyers exactly like myself. The arrogance and stupidity of eBay's management and actions over the past year has been nothing short of mind-boggling. In a time like this of financial crisis, they should be just flat-out BOOMING, as individuals all over the land try to convert the "junk in their garage" into cash. Instead, eBay continues waffling around in some theoretical delusion, pretending that is a strategy. It is a financial tragedy of huge proportions, not just to eBay shareholders, but to the world at large.

Ex PowerSellet • 27th April 2009 •

in german: ebay flickt nur noch .... patches for an out of time system

Stefan • 27th April 2009 •

"Without auctions I’d have no way to get my products easily and reliably to the top of Best Match." It has been suggested, repeatedly, that single quantity fixed price listings be weighted the same way as auctions for precisely this reason. Time ending soonest. Unless you have a ton of duplicates in stock that have sold well, you'll never get past page 50 of search results. The idea that FP is so heavily weighted on recent sales--which don't work for sellers of one of items that don't belong in the auction format--seems stupid to me. It's self-fulfilling as the same listings will always get more exposure and thus more sales.

Amber • 28th April 2009 •

I agree that using Bay is "too damn difficult" - which is why setting up yet another process for cancelling before despatch is not the way forward. Aside from its being bound to confuse casual buyers, such a process would also further forces sellers to use the 'my eBay' console, rather than their own system. I see this as a negative consequence because I feel eBay sheparding their sellers into operate in increasingly strictly defined parameters (eg free postage becoming a rule rather than an option) is part of the problem, not the solution. "eBay should stop being an auction site, and reposition itself as a shopping site." Market its other listing opitons, sure. But IMHO they should definately not get rid of aucitons. IMHO the 'get rid of auctions' stance is primarily the perspective of big sellers who flog new items, which are readily available from other online venues. For my personal items, auction is the only way to go. I have some rare items I want to list, haven't got a clue what they're worth & don't want the hassle of doing the research. And people WILL bid on them because we're talking about products they're unlikely to find on BIN & certainly won't find on Amazon Marketplace. Frankly, if eBay get rid of aucitons, I'll have very little reason to use them any more.

Uncle Sam • 28th April 2009 •

Hello :-) I feel that the basic problem is very simple. When a man is looking over his garden fence at the next door neighbours barbecue, he can forget to feed his own kids. In my view, Ebay have lost sight of its customer base and is spending all its efforts on copying the competition. The second basic problem is the WAY Ebay treats its customers. Let us get rid of "buyers and sellers" and realise that people that use Ebay are "Users". Amazon has a clearly defined grouping of Buyer and Seller. But Ebay's strength has always been its availability for Buyers and Sellers, this is its magic. In recent years Ebay treated the seller as the "bad man", and drove many off (only to reverse their policies aka getting rid of low value items - then promoting low value items). They have unwittingly alienated their "User Base" in my view. When they can step away from this and start valuing their customer base again, their fortunes may be changed. But I sense they have a philosophy that has become about numbers, this is often the death of a business, slow but sure. Love your Users Ebay, that would be my advice.... Mark

Mark T • 28th April 2009 •

Hi Sue, very interesting post. IMHO eBay are so obsessed with the idea of fee-avoidance that they’re ruining the site because of it. Spot on. eBay have come away from the idea that 'all people are basically good', to the detriment of their business. Of course you've got to have controls in place, but when you design a whole part of the buying process (UID) around paranoia about fee avoidance, then you're really in trouble. eBay now remind me of those sellers who have lists and lists of punitive terms and conditions in big red capital letters on their listings. eBay should join the 21st century, and get a shopping cart and a buyer-initiated “cancellation before dispatch” process, before all buyers quit in frustration and go somewhere else where it’s easier to shop YES! YES! YES! eBay have have tried to wedge their existing platforms (designed for a largely auction-led site) into the fixed price shopping world. It's hopelessly out of date. eBay should stop being an auction site, and reposition itself as a shopping site. NO! NO! NO! You're right that eBay is a place for "everything" - ebay should concentrate on making both formats a great (and profitable) experience.

Savvy Paul • 28th April 2009 •

we sell antiques, as a result a lot of people would think auctions would suit our items, far from it, we have anything between 500 - 600 listings on and they are all fixed price, if the fixed price format was removed Ebay financially could not exist

J R • 28th April 2009 •

Problem is that ebay is an Auction site, it always has been, the fact they have tried to cram the square peg that is fixed price into the round hole that is the site is the main problem. BTW i really hate the phrase "pro seller" for lots and lots of reasons. As someone has already said ebay should be booming in these "tough times", the fact that is not says more about how it is percieved by the general public than any dispute over which format is better.

board_surfer • 28th April 2009 •

times change, online auctions are not what they were, Ebay will never go auction only for so many obvious reasons, the most important being the ££££ that fixed price listings generate, I feel you are flogging a dead horse with your comments that Ebay should be auction only, it just is not ever going to happen

J R • 28th April 2009 •

Not sure who has said eBay should go auction-only, JR? I don't think even this comments thread's biggest auction fans have said that.

Sue Bailey • 29th April 2009 •

Interesting debate. If selling new product, Sue's analysis makes a whole lot of sense; make the shopping experience as simple as possible. Auctions still have their place, particularly for second hand / collectable items, but far from promoting this format, Ebay management have (contrary to some views expressed above) gone out of their way to undermine it. Free listing for auctions - fine, it saves you money on low value items, but the ramping up of FVF's only makes this attractive for items selling for <GBP10.00. Anything over that, and the new pricing structure becomes very unattractive. Auctions are dead? Take a look at the STR figures on the Medved site - the figures suggest otherwise. It would be interesting to see Ebay's own breakdown.... Auctions being down overall may well be a function of a maturation of Ebay buyer behaviour, but the myriad of changes over the past couple of years will have made many small to medium sellers re-appraise their use of Ebay and leave. This will have had a disproportionate effect on the number of listings in the auction format. A viable and vibrant auction market is probably Ebay's strongest USP - there is no competition out there. By all means streamline the Fixed Price buying experience, but this does not have to be at the expense of auctions, which should also be bolstered. Chris' point "Without auctions I’d have no way to get my products easily and reliably to the top of Best Match." is an interesting one. On the flip side, if a small seller had the same product as a one off (say a 2nd hand commodity commonly available new), how would they ever get the product seen without auction format, as they would get no visibility under current BM fixed price algorithms? And to add insult to injury they'll pay significantly higher fees for the privilege! Ebay has got bloated - they need to simplify the buyer AND seller experience.

mutley • 29th April 2009 •

in reply to Sue Bailey please read: comment 6 from board surfer

J R • 29th April 2009 •

How many changes to selling/listing has Amazon forced upon it's third party sellers in the last 2 years?

Bunchy • 29th April 2009 •

Why can't Ebay be more like Ebay?? I've been an Ebay user for almost ten years and have always preferred the auction format. The introduction of BIN was, for me, the worst thing that Ebay have implemented. Ebay insist that both the Auction and BIN format can co-exist; sorry but they can't. Ebay should create a 'sister site' devoted to collectors auctions thus leaving the main Ebay site free to compete with Amazon and any other fixed price sales sites. If there were an alternative, viable, auction only site available I'd certainly use it.

Steve • 29th April 2009 •

Its not often I read an ebay related article which I agree with in totality. This is one. I am utterly amazed at ebay's inaction to reform itself from the top down, the bottom up and inside out. It is surely time for ebay to reform its patronising attitude to its sellers if only because it would make sound financial sense. It seems to be run as some kind of quasi-religion where we are encouraged to worship a supernatural force which no-one can give a rational explanation for. Why is it always so difficult for them to make a joined up reform? We are months in to the new shop based system based on multiple fixed price listings for fast moving goods and lower listing fees for slower moving goods allowing more choice, which is fine and dandy, but we are saddled with an archaic and inscrutable system of snakes and ladders in order to buy and sell the goods. Case in point: I have just had a 'buyer' (reality check - a clicker) who went methodically through my listings and amassed a big list of purchases. I knew instinctively and rationally it was wrong (id was a 1 feedback), so I got in touch with PS support and of course they could/would do nothing except tout their pathetic resolution system. 8 days wait to file unpaid item disputes and a further 10 days wait before I can claim final value fees, and if the buyer had bothered to respond to the dispute they could claim the right to throw a pile of negatives at me. The result - my wasted time sitting in front of my monitor instead of me working to produce profits for myself and for ebay. Stock out of circulation while it could be selling producing profits for ebay and me. My little cheap and cheerfull website can handle abandoned carts without the system crashing to the ground, the buyer pays and the stock is accounted for, the buyer abandons and the stock stays in place. How difficult can that be for ebay to get their pin heads round? This has nothing to do with ebay's so called auctions, which of course never have been auctions in the true meaning of the word. They can continue these as they see fit. But if they could only stop biting the hand that feeds them, things could improve for everyone. Amazon still can't compare to Ebay's 'potential' but ebay don't seem to believe in themselves, only in some weird arcane imaginings of themselves.

Jack • 30th April 2009 •

@29 Ebay could have tried to move towards this split site method with ebay express. It wasn't marketed or pushed to fulfill it's potential so it failed and was withdrawn. Now THAT could have been a massive leap forward and PAST Amazon, but ebay messed it up.

Bunchy • 1st May 2009 •

@31 I hope your not endorsing Randy Smythe and Scott Wingo's idea of having eBay and eBay Classic. When I list my item, I want it to get the most traffic possible. Having two different sites is just going to split the traffic. Now if everybody starts listing on both sites to get their item exposed on eBay and eBay classic, you end up with 2 sites with the same inventory only sellers pay twice as much in fees.

david • 1st May 2009 •

"Now if everybody starts listing on both sites to get their item exposed on eBay and eBay classic, you end up with 2 sites with the same inventory only sellers pay twice as much in fees." Which has to be a good reason for ebay to do exactly that...no??

board_surfer • 1st May 2009 •

32# whether I endorse this idea or not is irellevant (can't spell, don't care). Whichever way you look at it, ebay express was a missed opportunity that was briefly headed in the right direction for once. 33# Exactly.

Bunchy • 1st May 2009 •

I can't see why anyone needs two ebay sites. I don't see a problem of auctions running concurrently with BINs It is simply the way ebay organises them that is the problem. For example if you search say 'Antique chamber pot' , the search results could show a split screen result (vertically split - so no favouritism) with auctions on one side and BINs on the other. The viewer could collapse either box if they wanted to concentrate on one or the other. Mixing up BINs with auctions in the current search method is a pain and most buyers (as buyers are mainly not so ebay literate) do not know how to use the options let alone do advance searches.

Jack • 3rd May 2009 •

"vertically split - so no favouritism"..just another argument over which should be in the left hand column etc...

board_surfer • 3rd May 2009 •