AuctionBytes Blog
Covering auctions, collectibles and marketplace selling.

AuctionBytes Blog The AuctionBytes Blog has been giving a voice to online merchants since its launch in 2005. Named one of the world's top 30 blogs in 2008 by "Blogging Heroes." Weigh in with your thoughts on the joys and pitfalls of selling online.
Sun Oct 12 2008 10:20:02

NYT Chronicles Amazon's Inroads against eBay

By: Ina Steiner

Sponsored Link

Brad Stone wrote an article for the New York Times today about the competition between eBay and Amazon. eBay CEO John Donahoe, like the Dennis the Menace character he is compared to by eBayers (Meg Whitman was Blondie), manages to stir things up without meaning to when he characterizes online auctions as time-wasters.

Stone writes that Donahoe "now embraces a "turnaround mind-set" and is refocusing its Web marketplace toward shoppers who don't want to waste time in online auctions. "There are times when I wish we can close this store and just open a new store, but we can't," he said. "We need to make bolder, more aggressive changes to the eBay ecosystem even if they are unpopular.""

Meanwhile Stone praises Amazon's Jeff Bezos as a long-term visionary, and writes that "third-party vendors - the foundation on which eBay was built - now account for about 29 percent of sales on Amazon."

eBay's short-term thinking versus Amazon's long-term thinking was reflected in the way the companies rewarded managers, as well as their investment strategies:

"While eBay was buying into classified advertising, online payments and Internet telephony, Amazon spent hundreds of millions of dollars building its brand as a trusted retailer - hiring customer service representatives and returning money to customers when transactions went awry."

While he makes clear that Amazon.com exerts more control over its third-party merchants than eBay had traditionally done, Stone doesn't raise an important issue. Merchants face the risk of being permanently booted off the site at any time and face seasonal suspensions. (Amazon suspends many toy sellers from posting in that category each holiday shopping season, for example.) He did touch on the fact that merchants compete directly with Amazon.com, but some believe Amazon extensively mines third-party merchant data to its competitive advantage.

The article points out some of the problems with eBay's management over the years, and lays the blame at Meg Whitman's feet. Short-term focus ("the company was obsessed with making quarterly numbers"), inability to define itself, failing to understand the competitive landscape, waffling (eBay Express), and a lack of focus - and Whitman's failure to get her team to agree on eBay's core mission.

As eBay continues to roll out change after change in 2008, many have tried to understand Donahoe's vision of eBay. The company has not communicated its vision well other than wanting-cake-and-eat-it-too statements - eBay wants to have a retail-like experience with great value and selection (the Amazonification of eBay), but also wants the small sellers and online auction format. Yet eBay's actions seems to be focused on only the first part of that vision.

Brad Stone said eBay wants to be a discount store. "This is where Mr. Donahoe talks about a vision to fix eBay, and to create a Web discount store that offers a wide variety of new and old merchandise in auction and fixed-price formats. To get there, he must administer the sweeping, painful fixes that eBay has previously shunned."

It appears that eBay is becoming an automated marketplace where algorithms do the work of reducing counterfeiting and fraud, and big-box retailers and distributors load their catalogs onto the site to fill out the inventory. This allows eBay to reduce labor-intensive tasks such as customer-service and fraud investigations, while it serves up contextual and behavioral-targeted advertisements to shoppers. This allows eBay to focus on its online payments business, an area where - for now - it leads Amazon.com.

 




Comments (23) | Permalink

Readers Comments

NYT Chronicles Amazon's Inroads against eBay   NYT Chronicles Amazon's Inroads against eBay

by: John

Sun Oct 12 12:02:50 2008

It's amazing that as deep as ebays problems are, the company still tries to make their quarterly earnings at the expense of their medium and small sellers.

Everyone who sells on ebay should ponder this: Though ebay has lowered its listing fees, Amazon still does not charge their sellers any listing fees! Amazon only charges a small monthly fee (between $40-$100) which allows their sellers unlimited listings. What this means to a medium sized seller such as us (with 6000 items) is that it costs us $2000 per month just to list on ebay core category whereas it only costs us $79 to do the exact same thing on Amazon! Best of all Amazon doesn’t have silly listing upgrades, third party seller services or software that they force onto their sellers.

Until senior ebay management is able to address this fundamental disparity they will continue to watch there sales fall prey to an ever-expanding Amazon.

NYT Chronicles Amazon's Inroads against eBay   NYT Chronicles Amazon's Inroads against eBay

by: EX EBAY SELLER

Sun Oct 12 12:36:36 2008

Ebay left its Small and Mid size sellers in the dust months ago by the use of the DSR and feedback systems which is causing sellers to go  bust.With the coming no Check & Money Orders next week its the end.You are even going to lose more sales.

NYT Chronicles Amazon's Inroads against eBay   NYT Chronicles Amazon's Inroads against eBay

by: republican voting democratic

Sun Oct 12 13:03:58 2008

GO AMAZON GO

NYT Chronicles Amazon's Inroads against eBay   NYT Chronicles Amazon's Inroads against eBay

by: another PS

Sun Oct 12 13:10:17 2008

"he characterizes online auctions as time-wasters"

Such a Bu.., I am offering both, yet only my auctions have bids, bids and more bids.

My BIN - nothing - nada - nichts -

He (Donna) needs to actualy take a look at ebay and see what is going on..

NYT Chronicles Amazon's Inroads against eBay   NYT Chronicles Amazon's Inroads against eBay

by: TekGems

Sun Oct 12 13:29:23 2008

Amazon and eBay are fundamentally different platforms, but it amazes me that sellers still try to compare the two in terms of fees.

Bottom line, you can be an ex-eBay seller and you could just as quickly become an ex-Amazon seller as well. Diversify and keep your business in your control (e.g. your own web stores).

NYT Chronicles Amazon's Inroads against eBay   NYT Chronicles Amazon's Inroads against eBay

by: Franci

Sun Oct 12 16:44:25 2008

There are two things which eBay has resisted from the very beginning that has and continues to damage business on the site:

l.  Verification of each and every member...simple to do, produces a much more reliable buying and seller membership and builds trust both for individuals and eBay.

2.  Good customer service.  Even moderate would be a boon.   eBay's customer service is so awful that it is an embarrassment to the company.  Great customer service can change everything, builds trust, catches problems early and keeps sellers selling and buyers buying.  

Until those two things are addressed, eBay will continue to decline and eventually disappear.

NYT Chronicles Amazon's Inroads against eBay   NYT Chronicles Amazon's Inroads against eBay

by: Diff

Sun Oct 12 16:55:46 2008

yes, I agree with TekGems. Amazon and eBay are completely different. Stop trying to compare them. Amazon has it's flaw too. Not all sellers can sell on Amazon.

NYT Chronicles Amazon's Inroads against eBay   NYT Chronicles Amazon's Inroads against eBay

by: Geoff Miller

Sun Oct 12 17:20:17 2008

ebay should be thriving right now in this economy, people are tight with their money and looking for deals. ebay is where they would have found them but mr. donohoe destroyed the marketplace.

NYT Chronicles Amazon's Inroads against eBay   NYT Chronicles Amazon's Inroads against eBay

by: Tired

Sun Oct 12 20:48:16 2008

Maybe the NYT should look a little closer at all the BS Donahoe has thrown out at all of us.  What a PUTZ!!!

NYT Chronicles Amazon's Inroads against eBay   NYT Chronicles Amazon's Inroads against eBay

by: Daisy

Sun Oct 12 21:17:31 2008

I wish Brad Stone had read the Legg Mason speech. Donahoe is seriously over the top. No wonder Ebay is failing.

NYT Chronicles Amazon's Inroads against eBay   NYT Chronicles Amazon's Inroads against eBay

by: Scot

Mon Oct 13 00:46:34 2008

@Franci:
You say its very simple for eBay to verify each and every member. How would you propose this be done?

NYT Chronicles Amazon's Inroads against eBay   NYT Chronicles Amazon's Inroads against eBay

by: exPowerSeller

Mon Oct 13 02:23:30 2008

Well written post!  Especially liked ''wanting-cake-and-eat-it-too statements.''

BIG difference between Amazon and eBay?  Commodities vs. one-of-a-kind items.  Used/hard to find merchandise is a category eBay OWNED up until this year -- and now, right when economically that market s/b booming, they have basically thrown it away.  Makes no sense.

''There are times when I wish we can close this store and just open a new store, but we can't,'' -- yes, you can... and ARE.... but just violently, and with lots of unnecessary carnage and loss.  

NYT Chronicles Amazon's Inroads against eBay   NYT Chronicles Amazon's Inroads against eBay

by: Franci

Mon Oct 13 04:35:44 2008

Scot...there are lots of ways to establish that a registering member is who they say they are and to annually verify both their phone number and address.  PayPal and other services do it all the time by having a small deposit made to a bank account.  There might be some variations for foreign members, but it easy enough to establish the validity of a registration.  If my bank can do it so can eBay.  

I even think that buyers and sellers should pay for the service...say $5.00 a year...and if eBay wanted to do something really smart they would put it in a fund for charity.  Let's see about 85 million members in eBay at $5.00 each that's nearly half a billion dollars every year!!   Wow!....sure could do some good with that!!

Franci

NYT Chronicles Amazon's Inroads against eBay   NYT Chronicles Amazon's Inroads against eBay

by: Daisy

Mon Oct 13 07:15:06 2008

Oh, Franci, perish that thought about $5.00 per member going to charity. That would simply go into John Donahoe's golden parachute fund. This is the kind of character that man has.

He can and is ruining Ebay. And the new executives he's brought in are probably being groomed to take his place. He's failing and miserably and he's probably preparing for an exit.

NYT Chronicles Amazon's Inroads against eBay   NYT Chronicles Amazon's Inroads against eBay

by: MERMAIDMONKEY

Mon Oct 13 09:25:11 2008

"Not all eBay sellers can sell on Amazon..." YES, very true -- there are handmade sellers, antique sellers and out-of-the-closet sellers that just don't fit the Amazon mold. I've developed the list of top eBay alternatives by Alexa ranking:

http://www.mermaidmonkey.com/eBayalternatives

-
---------------------------------

I
like Amazon's mature platform -- simply, there is NO BICKERING going on between buyers and sellers. eBay is easier to get started, but once you get the swing of things, Amazon is easy. Besides, as an entrepreneuer, it's so easy to set up an Amazon affiliate store and make money off selling OTHER PEOPLE's wares.

NYT Chronicles Amazon's Inroads against eBay   NYT Chronicles Amazon's Inroads against eBay

by: Stefano Neis

Mon Oct 13 09:26:42 2008

I just closed my ebay store and no longer sell there. I was a power seller with over 100,000+ net feed backs , over 200,000 sales on ebay total. Amazon was not the full answer for me but is a part of the answer. Diversification is the next wave of e commerce. Multiple channels of selling, using what is cost effective (Amazon, Googlebase, Delcampe.com [for me]) and dumping what is not (Ebay) .

NYT Chronicles Amazon's Inroads against eBay   NYT Chronicles Amazon's Inroads against eBay

by: RJ

Mon Oct 13 11:00:24 2008

I've been going to local auctions, both those held in an auction house and those held at a family's home (estate auction).     And, in 2001 I began coming to the eBay site, as the experience was much the same.   No longer is eBay providing me with the "auction experience" that I enjoy.  So, I spend way less time on eBay now.    I miss the way that it once was, and have now branched out to explore other on-line auction sites.  

I have the opinion that eBay doesn't want my business.   They have changed so much from the site that I once loved.  Maybe it's a generation thing.        

NYT Chronicles Amazon's Inroads against eBay   NYT Chronicles Amazon's Inroads against eBay

by: zeak

Mon Oct 13 13:01:14 2008

times are changing anyone that thought ebay would own the market forever just wasnt thinking. now you have amazon which in my view is just as flawed as ebay (put ioffer in this cat as well). lazifare works for me i think ecrater and craigslists hands off aproach is the best model.i dont need whistles and bells i just need a platform. i can pay for my own (which is now very easy) or i can use someone elses (ecrater came out the winner for me) the atmosphere is so radicaly different now compared to when i started. ebay wont die and amazon wont become the new ebay the jeni is out of the bottle and its very hard to put back in.

NYT Chronicles Amazon's Inroads against eBay   NYT Chronicles Amazon's Inroads against eBay

by: Fed Up

Mon Oct 13 16:21:22 2008

I cannot believe  there isn't something that can be done about Donahoe. With all his changes he has to have broken some laws or come awfully close. I am not a legal person, but surely somebody out there has legal knowledge.

Obviously JD has the major stock holders buffaloed to believe this is just part of the re-structuring he is doing and that all will be OK in the end. BULL!

NYT Chronicles Amazon's Inroads against eBay   NYT Chronicles Amazon's Inroads against eBay

by: Leonard

Mon Oct 13 20:09:58 2008

This may be a good place to ask: Has anyone looked at Medved's auction sell-through charts recently? After years of all being around 40%, auction sell-through rates have jumped up to levels not seen since the early 2000's, while Buy It Now rates have jumped down.

This suggest that something eBay has recently done makes auctions now BETTER in terms of liklyhood of sale! Can anyone explain what's going on?

Click to view more comments
1 2  [Next Page]


Login is required to post comments.
To sign in to leave a comment using your AB Verify User Name, fill in the form below. If you have not yet signed up for AB Verify, or if you'd like more information, go to the Registration Page
.

Login for AB Verify
Be sure and use your email address and password to log in.

 
Email:
Password:
 
 Forgot Your Password?
 Even though you are signed in with the AuctionBytes Blog, you will have to sign in to the EcommerceBytes blog. But you can sign in with your existing AB Verify info.