'PayPal Damon' Weighs in on the New eBay
By Ina Steiner
In the early days of ecommerce, Damon Billian was known as "PayPal Damon." He was the intrepid PayPal employee who spent his days on discussion boards helping eBay users navigate the new auction site and innovative P2P payment service.
We interviewed Damon when he left the company in 2004. Damon had truly worked "in the trenches" of eBay and PayPal from 1999 - 2004, and we thought it would be fun to catch up with Damon 5 years later to find out what he thinks of the industry's current state of affairs.
AuctionBytes: What have you been doing professionally since leaving PayPal?
Damon: I've worked at SimplyHired.com, Mint.com & now Tokbox.com. I am still doing Community & Customer Service stuff. Since Tokbox has many strong connections to PayPal people, I am confident that the company will do well long-term.
AuctionBytes: How have small eBay sellers changed since you left the industry in 2004?
Damon: Hmmm...I don't think they are as thrilled with eBay as they used to be. I think that some of the ones that have been around the longest definitely have hard feelings about the changes the company has been making. The constant policy changes, even the ones that are needed, seem to signal to some people that the company doesn't have the patience to see what happens long-term.
AuctionBytes: Part of what made eBay and PayPal so compelling in their early days was the low barrier of entry - it seemed anyone could go online and become a merchant with little effort. Do you think it's still easy for small sellers to get established online?
Damon: Depends on the site...I think sellers can do other things (blogs, etc.) to drive sales to their site. eBay is still pretty easy to use overall, however. I also think PayPal still makes it way easier to accept various forms of electronic payments, including credit cards, without the hassle of getting a merchant account.
AuctionBytes: You used to deal with some very frustrated PayPal users in your customer-relations role. Do you think things are easier for PayPal users now, harder, or about the same?
Damon: A payment service, because it deals with money, is always going to have issues (largely interpersonal disputes between buyers and sellers). I would say about the same.
My job these days, however, has been made easier by using services like Twitter, GetSatisfaction.com & the like. I don't think that people realized how difficult it was following hundreds of threaded comments on a daily basis. :)
AuctionBytes: eBay fought PayPal before it eventually acquired the payment service. Can you talk about the tensions between the two companies and what the PayPal people were thinking?
Damon: Heh, that's a long one. Eric Jackson's book, The PayPal Wars, probably covers it better than I could. Meg Whitman wasn't too thrilled that we were at the first eBay Live, however.
AuctionBytes: Fill us in on the infamous party held at the first eBay Live conference in 2002, right before eBay agreed to acquire PayPal. Whose idea was that, and do you think it influenced eBay to acquire PayPal?
Damon: A lot of people were involved in that decision, including JoAnne Rockower. It most certainly made eBay realize that they should buy us because the bulk of the community at eBay Live was thrilled that we were there.
AuctionBytes: Was that the purpose of the party?
Damon: Yep, our goal was to throw a party bigger & better than eBay's :) It was also a great way for us to mingle & meet our fans.
AuctionBytes: Could you ever have imagined the day when eBay would ban checks and money orders, and what do you think of that policy?
Damon: I personally wouldn't have too much of an issue with it. Money orders and checks afford absolutely zero protection to the buyer. I realize that sellers may not like paying fees to an electronic payment service like PayPal, but you can't negate the importance of having some level of protection available to a buyer.
AuctionBytes: Do you keep up with what is happening with smaller sites, and do you think there is a place for disenfranchised eBay sellers to go?
Damon: Nearly all of the smaller sites don't offer the same things that an eBay or Amazon would (traffic, etc.) Some of the niche sites probably do ok...just not great.
AuctionBytes: What is eBay currently doing right?
While this will probably ruffle some feathers, I do think that trying to push "bad" sellers off the site is a good thing. One bad seller ruins business for good sellers & destroys the company's image with buyers.
I actually like most of the idea behind DSRs...just not a big fan of how it launched (wasn't weighted across all categories, etc.).
I am also a big fan of the charity auctions. Over the past year, for example, I've generated close to 1000.00 in donations to causes I would like to support by selling things I no longer need (Kiva.org, Big Cat Rescue, World Wildlife Fund, Toys for Tots, etc.).
PayPal, of course, is still growing rapidly. No surprise there :)
Note: There seems to be a lot of John Donahue bashing these days. While I don't know the guy at all, I actually think many of the site changes that sellers are complaining about were well under way before he assumed the CEO role.
AuctionBytes: What are the current problems with eBay?
Damon: I personally find the fee structure to be out of whack and way too complicated (varies by category, additional percentages based on closing price, etc.). Why not simplify it & focus on making it easier to understand? While it might create short-term changes in revenue, I think it would do a world of good long-term if they wanted to attract/retain sellers.
While fees will always be a bone of contention with sellers, the breaking point with many sellers came around 2005. If eBay and PayPal fees eat up 12-15% of a sale, perhaps even more, where's the benefit to a seller that may be selling something with margins of 20-25%?
Shipping and handling: While eBay definitely needed to do something about excessive shipping and handling, I do find it be a mistake to cap certain categories at $3.00. I think $3.50-4.00 would be more reasonable for things like cds and dvds, largely due to the fact that a casual seller is trying to recover their costs for listing, shipping & packaging the item (including PayPal fees). If I purchase something from Macy's, Macy's is charging me for things like labor, time,materials, etc.
Auctions: I don't see the reason that so much effort is going into moving everything to fixed price. Wouldn't the buyer decide what kind of activity they want to participate in? Auctions are still valuable for certain categories, including collectibles.
DSRs do not factor in things like receiving a good total price for a purchased item. Overseas buyers, for example, would have to pay nearly 50-60 dollars for a blu-ray disc in their country; if they get it for $30.00 on eBay, including shipping and handling, doesn't that show one of the stronger points of eBay?
Fee structure: Extremely convoluted & based on category. Wouldn't it make more sense to make flat rates across the board for all categories, save perhaps Motors & Real Estate? Why are the final value fees (fixed price) more for Books and DVDs than clothing (15% v. 12%)? Why does the sliding scale make it even more complicated based on closing value? This type of structure only makes selling on places like Craigslist more appealing, nor does it address Amazon's very straightforward approach to fees & closing value fees (which probably means selling on Amazon is cheaper for some categories). This structure worked when eBay was the only game in town, something that is not the case these days.
Community: eBay is not very active within their community these days & I believe a large number of community reps were let go with the recent lay-offs. If all of the Web 2.0 companies realize the importance of community, the company that once was the symbol of community should get back in the game.
Innovate: Amazon is kicking eBay's ass in innovation. It would probably be a laundry list of items here, but there really hasn't been a substantial change to the site in some time.
Smaller sellers (casual ones) represent the long tail of activity on eBay... Don't forget about the little guys (many of them were probably the best ambassadors for eBay).
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About the author:
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to firstname.lastname@example.org.
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