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Thu Mar 12 2009 23:11:28

eBay Gives Away the Store to Branded Retailers

By: Ina Steiner

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Over the past year, eBay has made major concessions to branded retailers in an effort to attract them to its site. Aside from privately negotiated fees and improved exposure on the site, eBay SVP & GM of North America Marketplaces Stephanie Tilenius revealed during yesterday's Analyst Day that eBay is allowing certain companies to brand themselves on eBay. "We're creating branded pages where the merchant can control the experience, and we're working with them to onboard lots the inventory."

Was Tilenius referring to these sellers' About Me pages? On TigerDirect's About Me page, for example, the company advertises its own website in the "About Us" section, and some Diamond PowerSellers including Toolup and PepBoys (Pep_Boys) link directly to their websites. If she was not talking about the About Me pages, is there something more on the way?

While eBay is allowing large retailers to brand themselves on the site, it's apparently not permissible for smaller sellers to link to their websites on eBay. eBay has for a long time limited sellers' ability to communicate with buyers prior to consummating a sale due to the fear of off-site transactions. Last summer eBay took it step further and told sellers they would have to remove all links to their websites from their About Me pages (after going back and forth, the policy is now ambiguous).

So why is eBay making special allowances for large-volume liquidators? The answer appears to be the new buzzword being thrown around in hopes reigniting analysts' interest in the marketplace: "Secondary Markets." By rapidly building up the number of items on the site, eBay is hoping to shed the "miles wide, but only inches deep" label that has dogged them, in hopes that that they will be seen as one of the leaders in online secondary market sales. ONE of the leaders. In case nobody has been paying attention, for the past 14 years, eBay was THE leader in online secondary market sales.



There are several questions that analysts should be asking themselves.

- When eBay said they are not a retailer and emphasized its "Secondary Markets" strategy, could it be due to a failure to attract new inventory on the site?

- If eBay no longer wishes to be compared to Amazon, which companies are in the space that they want to occupy? Overstock.com? Big Lots?

- Why is it better to have SmartBargains or Shoplet loading SKUs onto the site than letting the marketplace grow organically in whatever direction users take it?

Many of the larger Gold and Platinum PowerSellers were already bringing secondary market inventory to eBay, before they created the Large Merchant Services API. Apparently, they were not bringing it on board fast enough.

On the other hand, Gold and Platinum PowerSellers need eBay to a much greater extent than do Diamond PowerSellers. eBay has been the primary channel for many Gold and Platinum Powersellers, while eBay is just one of many channels for Diamond PowerSellers brought on by companies like Mercent, for example, which is in the process of bringing on additional Diamonds eBay sellers soon.

While Gold and Platinum sellers have historically been reliant on eBay, most Diamonds already have viable channels on which they are selling. It will be interesting to see if Diamonds leverage eBay's need for more SKUs to their own advantage.




Comments (73) | Permalink

Readers Comments

eBay Gives Away the Store to Branded Retailers   eBay Gives Away the Store to Branded Retailers

by: nadine

Fri Mar 13 00:28:37 2009

Let me see if I have this straight: ebay's story is that sure, we screwed up 2008 and we failed so badly at becoming a retailer that we're going to pretend we never tried, but now you have to give us two more years to finish our great plan! Are the analysts stupid enough to buy this? Any of them?

The Diamond Sellers are going to squeeze eBay's margins asymptotically to zero. eBay needs them more than they need eBay. eBay will just rely on the ever declining base of suckers, aka sellers paying full freight, to pay the bills.

eBay Gives Away the Store to Branded Retailers   eBay Gives Away the Store to Branded Retailers

by: Jessy S.

Fri Mar 13 00:31:34 2009

This can only end badly for eBay.  I can honestly see the diamond powersellers putting a few things on eBay just for kicks, and in order to provide users with a "sampling" of what products one can expect at one site.

For example, lets say that Tiger Direct lists PC components so that the Windows Vista user can upgrade their system.  If the user uses the about me page to link to the TD home page, he can maybe find a deal that allows him to buy PC components through tigerdirect.com, and if he does that instead of using eBay, he would get a healthy percentage off the upgrade version of Windows 7 when it comes out.

What JD doesn't realize that Amazon.com works as a partner with its merchants.  Both Target and ToysRus have their sites on amazon's servers and both pay a commission when their products are sold through amazon.com.  eBay diamond sellers are getting access to the site for next to nothing, and it is a site that is not working most of the time and to the point that you can't access a seller's products most of the time.

eBay Gives Away the Store to Branded Retailers   eBay Gives Away the Store to Branded Retailers

by: John

Fri Mar 13 00:33:21 2009

This move into "secodary markets" will be as  big a flop (if not more so) than the skype fiasco. The reason is simple: These big branded retailers and ebays priorities are not the same -- indeed they are polar opposites and ebay knows this. Shows how desperate they have become to attract new inventory. AMazon seems to do it with ease.

eBay Gives Away the Store to Branded Retailers   eBay Gives Away the Store to Branded Retailers

by: Clay

Fri Mar 13 00:39:37 2009

Analysts should be asking a lot of questions. Such as why remove good sellers who did above average business with their customers, attracted a more then 50% repeat buyer status, had high DSR's and 100% feedback, and accomplished this 10 year selling model with paper payments only.

Instead they tell sellers like this they are not wanted and  bring in the diamond sellers who are amassing a huge amount of Negative feedbacks for a minimal amount of sales. Their only REAL contribution to eBay is that they list items in the TENS OF THOUSANDS. Their STR is around 2% but they provide legal padded listings for eBay.

Now eBay can tell their shareholders that listings are up. Thanks to their diamond sellers, who pay nothing to list and next to nothing for FVF's. They want just enough of these guys to keep the stats looking good and fool the shareholders into thinking eBay has it together. All the while they are screwing the little guy out of as much money as they can.

eBay Gives Away the Store to Branded Retailers   eBay Gives Away the Store to Branded Retailers

This user has validated their user name. by: Ming the Merciless

Fri Mar 13 01:58:14 2009

Ebay executives quite likely fully briefed these analysts before the official announcements.

Next the analysts tell ebay that their expectations are exactly the changes that ebay executives had told them about earlier.

Then ebay officially makes their announcements, and the analysts take credit for prodding ebay to make whatever changes ebay has decided to make.

Analysts then upgrade ebay from sell to hold or hold to buy because ebay is following their 'recommendations.'

Of course, the fact it's going to take a minimum of two years to accomplish The Final Disruptions is never mentioned.

Then the business media disseminates this garbage udner the theory that if you tell a lie often enough, more and more people will believe it.

It used to be and perhaps still is (but is being ignored) that Fair Trade practices prohibited a company from making different deals with different customers.

The Ho said sellers should have "skin the game."

Where's Buy's skin?

Where's shoplet's skin?

Where's smartbargains' skin?

There's going to be a special place in Hell for the likes of The Ho and The No.

eBay Gives Away the Store to Branded Retailers   eBay Gives Away the Store to Branded Retailers

by: Independent seller

Fri Mar 13 02:02:45 2009


This week brought good news for ebay sellers: we can all decide who we want to be now. Ebay really wants to ''break up with us'', the proles, the labourers...the ''community''.

There really isn't any ambiguity now: for months, we wondered if some of the ruinuous changes of 2008 would be improved or at least tweaked.

Nope.

Best Match just killed exposure for lots of sellers; especially those who choose to sell their goods ABOVE cost, (as opposed to sellers still operating a permanent net loss, just living on the ''ebay crack'' of ebay sales/cash flow velocity....a sad life of denial, the ebay ''dream'' of say, 2002 is over, never to return)...

If you still choose to sell on ebay for any practical reasons at all (i.e. money) that's fine. Now is the time to really look at things in the big picture for ourselves. Business is business, capitalism isn't fair and neither is life. Ebay is a for-profit business and yours should be too!

Ebay is going to do what it wants to do for themselves, sellers should do what they need to do for themselves, as well.

If staying there makes you enough money for your time, then stay, by all means. Time is money, don't just look at this as a hobby, anymore; even if you are a small seller and it IS really just a hobby. Time is money and you have to decide if you want to give ebay your money anymore.

They seem to take for granted that you will no matter what they do.

Sellers, the choice is yours. Life is short!

eBay Gives Away the Store to Branded Retailers   eBay Gives Away the Store to Branded Retailers

by: Ebay's Slow Death

Fri Mar 13 03:37:37 2009

@Independent seller

Good comment!

I'm a bookseller, but have pretty much given up trying to sell any books on Ebay. When I research a book on Ebay, I'm amazed at people who list a hardcover book at $.99, with about $3.00 for postage. It costs at least $2.58 to mail a two pound package by Media Mail. Even if you didn't pay anything for the book, there are Ebay fees and PayPal fees, and you have to send the book in something. I can't figure out how these people are not losing money.

Could somebody ''dimension'' that for me? (Love those biz speak terms they throw around!)

The illustration Ina included in the article is great!  We, or analysts, should expect in, ''2009: Growth expected to be slower than the market''.  Isn't that handy!  Donahoe and the Execs get another year of a free ride (which is all down hill) as they innovatively destroy the company.

Are all of those analysts and shareholders really that stupid, that they can't see how Ebay is imploding? Every decision Donahoe makes is bizarre!

eBay Gives Away the Store to Branded Retailers   eBay Gives Away the Store to Branded Retailers

by: Renagade

Fri Mar 13 06:00:28 2009

Wow! What great news!
Now I can go to one place....eBay....and buy all I want from the BIG stores and not be pestered by all those "little sellers"
Just exactly what comes to MY mind when I think...Hmm..wonder if anyone on eBay has such and such...
ebay is sooo far gone now, there is no getting the eBay we all KNEW and loved back
Thank God for sites like Bonanzle, Ruby Lane, Esty, etc where one can STILL find GOOD small sellers and not have to deal with a big corperate ones.

eBay Gives Away the Store to Branded Retailers   eBay Gives Away the Store to Branded Retailers

by: ebay = bush brains

Fri Mar 13 06:06:58 2009

Nonsense and mickey mouse way of doing things STILL at ebay :
Look at this today :  
March 12, 2009

eBay Gives Away the Store to Branded Retailers   eBay Gives Away the Store to Branded Retailers

by: etc lets try again

Fri Mar 13 06:07:33 2009


Some members may be seeing various error messages when trying to register a new account as well as when listing items on the eBay site. We are working to resolve this as soon as possible.

The error messages do appear to be intermittent, please try again. Thank you for your patience while we work to resolve this.


eBay Gives Away the Store to Branded Retailers   eBay Gives Away the Store to Branded Retailers

by: Rob

Fri Mar 13 08:56:33 2009

Wait and see...now that Ebay is talking with Alibaba that has nearly 400k asian based manufacturers, SOON 75% of the businesses on ebay will either be U.S. mega retailers/wholesalers OR chinese manufacturers peddling massive ammounts of their junk and counterfeit goods. The site already is overrun with crooked sellers from Thailand, China, Hong Kong and Malaysia, and Donahoe has recently stated he's interested in partnering with Alibaba where pretty much every counterfeit goods manufacturer in existence advertises.

eBay Gives Away the Store to Branded Retailers   eBay Gives Away the Store to Branded Retailers

by: Perry

Fri Mar 13 09:30:18 2009

So if a big seller sells say 3,000 things in a month and only gets 100 negative feedbacks, he is a good seller. And does that mean that the feedback system that has been changed by eBay to protect buyers has now failed as well since negative feedback as well has no meaning. It seems to me that a small seller who sells 1,000 items in a year with 12 or so negatives is better than a giant selling tens of thousands of items per year with thousands of negatives simply shows that eBay is money hungry for the times and really does not care about buyers or sellers, just eBay. I wish them all the luck in the world in staying in business much longer with their everybody in the world is a loser but us attitude.

eBay Gives Away the Store to Branded Retailers   eBay Gives Away the Store to Branded Retailers

by: Ebay No More

Fri Mar 13 10:13:31 2009

Unbelievable that Ebay management can still be so flipping lost. Let's advantage Diamond sellers so they have even better sales to drive Ebay buyers away from the dot com site. Now let's add the trash sellers that will accompany Alibaba onto the site. Can anyone say Ebay stock under $1?

Someone earlier stated that the site is rampant with fraudulent sellers from China, Hong Kong, Malayasia, and Thailand. That's true because Trust & Safety does absolutely nothing to reign these criminal sellers in allowing massive fraud in exchange for the revenue from sales. Now let's add thousands of Asian junk peddlers on top of the fraudulent ones and you have a recipe for Ebay stock to begin trading on the penny market. If I didn't enjoy watching Ebay's meltdown so much I would cry.

eBay Gives Away the Store to Branded Retailers   eBay Gives Away the Store to Branded Retailers

by: oh no

Fri Mar 13 10:16:12 2009

That cheap nonsellable china crap will flood ebay. And just wait for all the anger buyers with slow delivery, not gettying what they ordered, and cheapo products. Death knell for ebay.

eBay Gives Away the Store to Branded Retailers   eBay Gives Away the Store to Branded Retailers

by: Daisy

Fri Mar 13 10:29:23 2009

There's an article on Bloomberg dot com that says Alibaba wants to work with Google, Ebay. The article also has a quote from Donahoe that he is open to that and Paypal could hook into AliPay (Alibaba's online payment processing).

That would certainly explain their new found excitement. The small sellers will have no choice but to leave. We'll be literally buried.

eBay Gives Away the Store to Branded Retailers   eBay Gives Away the Store to Branded Retailers

by: just wondering

Fri Mar 13 10:32:18 2009

Can't help be be amazed at the disconnect between what I have read about the analyists' meeting in the blog posted here, other articles on the net and the front page article in the Wall Street Journal - headline "Ebay Retreats in Web Retailing" - the gist of which seemed to be that TPTB  acknowledged that the wrong path was taken under the Megalomaniac and they have seen the error of their ways and intend to return the site to its roots -ie auctions.

Were all these reporters and bloggers at the same meeting????? To my way of thinking, bringing every liquidator they can tempt on to the site in tandem with the diamond freeloaders has nothing whatsoever to do with getting back to the core business - the one that made the site successful in the first place.

Ebay lost sight of the fact that no other site could touch our success at what we did and do the best - a mix of auctions and store items in the antiques, collectables, weird and wonderful stuff with some media, art and some small sellers of new goods thrown in. They were hell bent on taking on every other company on the web and making ebay a composite of every possible web sales business model out there and failing at every turn.

We know that ebay never listens to its core users - us, the longtime sellers and buyers, but that might change if they get slapped around by Wall Street a bit more.

Now would be the perfect time for ebay to take the bold step of proving that their vision and policy direction is the right one.  If they truly believe that the "secondary market" is the future then make the bold move to split the site. We already have Ebay Motors, why not Ebay Classic for antiques, collectables, books, art etc and  The New Ebay for all their pet diamond PS, the liquidators and the flood of Chinese manufacturers that they will surely allow to access the site.

eBay Gives Away the Store to Branded Retailers   eBay Gives Away the Store to Branded Retailers

by: Peter Leeflang / THE LEEFLANG ARCHIVES

Fri Mar 13 10:41:33 2009

Expanding Retailer Branding=Debranding Ebay

With the expansion of allowing major retailers to brand themselves on Ebay's site, Ebay management is in fact de-branding Ebay itself.

Buyers will only remember what retailer they bought with, not that they bought on Ebay.

The consequence is that there will be no 'repeat buyers' on Ebay, since any 'first purchase' with a retailer, will be incentivized to be followed up by following sales on a retailers own site.

Gradually the buyers will figure out that it is easier to go straight to a retailers' site.

No, it is unlikely that major retailers will not also post their overstock on their own sites. The fear of 'downtrading' one's brand is apparently not there with major retailers, since they are already downtrading by listing on Ebay.

eBay Gives Away the Store to Branded Retailers   eBay Gives Away the Store to Branded Retailers

by: ebay=penny stock

Fri Mar 13 11:00:00 2009

Anyone willing to give odds on ebay stock being under 5.00 by the end of the year.

Uss Ebay is a sinking ship. Just a matter of time before the crew leaves.

Anyone still selling on ebay is like the beaten person who returns to the beater.

eBay Gives Away the Store to Branded Retailers   eBay Gives Away the Store to Branded Retailers

by: Go Figure

Fri Mar 13 11:11:22 2009

I have never understood why the TV media, Business Week, the Wall Street Journal, et. al. didn't monitor and report on complaints and pleas like the ones showing up on this blog.

They just kept writing puff piece stories and nibbling around the truth about what many (small sellers) were saying about Ebay.  

I guess they were just lazy and gobbled up the Media Releases from Ebay word for word, parroted back stories and didn't do any independent research.

Kinda like 9-11, something has to explode in front of their eyes before they pay any attention.

The media are lazy.  They were so in love with Meg Whitman they wanted to keep the Ebay fairy tale alive.

They didn't want to report something critical of Ebay.  So now, how much longer does Ebay have on life support?

Who knows?  Who cares?  Why bother?

eBay Gives Away the Store to Branded Retailers   eBay Gives Away the Store to Branded Retailers

by: Clay

Fri Mar 13 11:13:37 2009

@@@ just wondering

RE:....If they truly believe that the ''secondary market'' is the future then make the bold move to split the site. We already have Ebay Motors, why not Ebay Classic for antiques, collectables, books, art etc and  The New Ebay for all their pet diamond PS, the liquidators and the flood of Chinese manufacturers that they will surely allow to access the site.....

IMHO:...Even though I and many others have asked this same question I don't think eBay will do it. That would then put statistics for auctions -vs- fixed price to a visual test. In the collectibles trade auctions are always best, but with general merchandise it is not. eBay drives on statistics/data/etc...anything that would question their statement that fix pricing is the new norm will not flow. Also in MHO many antique collectors prefer paying with paper rather then electronic payment. This alone will can the issue....


@@@ Peter Leeflang / THE LEEFLANG ARCHIVES

RE:...Buyers will only remember what retailer they bought with, not that they bought on Ebay.

Perhaps this is what eBay wants. Since these sellers have much higher negative feedback rating. Fault falls on them and not eBay

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