eBay seller cries were heard around the Internet and around the globe after "Black Wednesday," when eBay announced it was limiting Store inventory visibility yet raising Store fees in several countries, including U.S., Canada, UK, Ireland and Australia.
I'm busy doing a lot of reading (discussion boards, emails, articles) and listening (to eBay's conference call with analysts and the eBay Town Hall Meeting), and of course writing (Friday's Newsflash newsletter and Sunday's AuctionBytes-Update newsletter). So here are some random thoughts, too fractured and informal to make into an article....
Ever since Meg threw her hat in the ring for the Disney job, she's lost the magic touch. It must be getting to her. Who thinks it makes sense to say something like this - which is being quoted by reporters and being read by buyers: "The marketplace has been overwhelmed with identical, often poorly-priced items that have diluted the magic of the eBay experience." Yeah, really makes me want to go to eBay.com and start shopping. *****
eBay will promote eBay Express, but will include auction-style BIN items and put those items ahead of Store inventory items. Will this confuse buyers? eBay said it would promote eBay Express as a place to find new in-season items. Will merchants list new in-season items in an auction-Style BIN format? Would eBay Express buyers find vintage clothing ahead of new items a turn-off? *****
It sounds like eBay is fumbling here, or at least doing a very bad job in communicating its strategy. Seller whiplash is the result. *****
Why wouldn't eBay want to have both - an auction site and an "ecommerce" site? It looks like eBay wants to manage the stock - the numbers don't look as good on Store items to analysts. Whitman said Store inventory makes up 83 percent of listings, but only 9 percent of Gross Merchandise Volume
Having said that, the result of increasing Store fees may have the desired result in terms of "cleaning up" Store inventory. Some sellers - ones who say they plan to keep their eBay Store - say they will rid them of items priced at under $5 and will clear out the deadwood. That's exactly what Whitman and company are looking for with the fee hike.
In a video interview on CNBC (available on the Wall Street Journal site link- paid subscription required), Whitman said that with the 2005 fee increases, eBay "didn't understand the impact that store inventory format had had on the marketplace quite as well as we do today."
One CNBC reporter, who said he had gotten lots of emails from sellers who felt eBay was "jerking them around," wanted to know if Whitman wanted Store owners to "go away." Certainly there is confusion among sellers and feelings of being unappreciated by eBay. *****
Robert Peck of Bear Stearns wrote in his research that, "With more listings flooding into the core platform, we think it could further erode the already declining conversion rate if the demand side of the equation does not pick up. As such, we believe demand remains the key determinant of the success of the new store fee structure." In other words, eBay needs buyers.
But Peck is making an assumption that Store sellers will take items off out of their Stores and put them in auction format. Some of that will happen, but a lot of Store inventory could only be supported with a 3 cent monthly listing (and Gallery) fee, not a higher listing fee times 4 (assuming a 7-day auction listing is relisted 3 times to equal the 30 day period of Store fees). *****
Here's what I'm seeing sellers deciding to do in reaction to Store fee hikes: 1) Keep store; 2) Close store; 3) Keep Store and rid it of <$5 items and clear out the deadwood.
I guess I was somewhat shocked to learn that some sellers had been listing $3 items on eBay Stores. Unless something is a "loss leader" or vital to something else you are selling, how can it be worth the time and effort to list and fulfill $3 items? *****
If eBay wants "better stuff," why put in the second tier in listing fees for Stores? Isn't eBay encouraging people to list items under $25, since the listing fee is 5 cents instead of 10 cents for items $25 and above? (I'm just sayin'......) They must really want those auction format listings! (Still not sure they are going to get them.) *****
There are many sellers who are invested in their eBay Store and would like to keep it. I am working on an article for Sunday's newsletter to look at the issue of whether it makes sense to keep an eBay Store and if so, what strategies to utilize to cope with significantly higher fees.
Comments are more than welcome, There's so much news going on, it will really take me a while to synthesize it all. I'm wishing everyone luck with coping with the ramifications of Black Wednesday.