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Thu Nov 13 2008 21:01:36

eBay Encourages Top Sellers to Compete on Price

By: Ina Steiner

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An eBay presentation to top PowerSellers this afternoon revealed eBay's desire to be a "more efficient marketplace" and "improve the buyer experience," and it appears low prices are key to accomplishing that mission. A slide demonstrated how price-competitive eBay has become, with the company advising sellers to "actively manage their prices to compete." The message to sellers seemed to be: slash prices, slash them often.

The slide shows four sellers of a Garmin GPS product who are pitted against each other in a price war. Each seller has a different number of feedback ratings. The slide shows that Seller 1 lowered his price for the product from $142.99 to $129.79 over the course of a 1-month period, with all of the sellers lowering pricing to keep up with each other. The slide indicated how many times each seller lowered prices during the month, with "Seller 3" lowering his price 15 times. A box on the slide called out: "Top sellers are revising the prices on their listings MULTIPLE TIMES PER WEEK."

It's hard to believe sellers listening to the conference call would want to achieve lower Average Selling Prices, and eBay itself generates commission on selling price.

Nowhere on the slide did eBay mention customer ratings, DSRs or buyer satisfaction with the four sellers. With a focus on low prices, it's hard to see how sellers can keep or raise the level of customer service they provide to buyers, yet DSRs are not unimportant to sellers. Update: Just to clarify, eBay did say during the presentation that title, Item Specifics (especially condition), DSRs, buyer satisfaction, free shipping, listing in relevant categories, all play a role in Best Match. However, it said the "key criterion" for Best Match for Fixed price listings was Recent Sales.

eBay made radical changes to its feedback system this year in the name of improving the buyer experience, but confirmed Thursday that "Recent Sales" was the main factor in how fixed-price listings are shown to shoppers in search results. A slide entitled, "Choose the right format" said the key criteria for Auction-style format is Time Ending Soonest, and the key criteria for Fixed Price format is Recent Sales. (See the previous AuctionBytes blog post for a discussion on eBay's search alogrithm.)

The presentation overall showed how complicated it has become to sell on eBay, and specifically how price competitive the site is becoming. Other news and information coming out of the presentation will be reported in tomorrow's AuctionBytes Newsflash newsletter.




Comments (66) | Permalink

Readers Comments

eBay Encourages Top Sellers to Compete on Price   eBay Encourages Top Sellers to Compete on Price

by: RicRoe

Thu Nov 13 21:33:38 2008

Are eBay executives really this dimwitted?

eBay has been pushing sellers to offer free shipping thus increasing prices. Sellers comply, raise retail prices to include shipping costs and suffer lower DSR scores, eBay sees an increase in Final Value Fees.

Now with shipping rolled into selling prices, eBay now wants sellers to lower listing prices too?

What does eBay expect from sellers anyway?

EBay continues to demonstrate how out of touch and inconsistent their policies and suggestions are.

I guess the expectation is that the only party that is supposed to earn a profit on eBay transactions is eBay.

How many directions are eBay executives going in?

A ship can only travel in one direction. The ship that tries to go in more than one direction at a time will eventually split into pieces and sink.

No wonder eBay is sinking.

eBay Encourages Top Sellers to Compete on Price   eBay Encourages Top Sellers to Compete on Price

by: ss

Thu Nov 13 21:46:05 2008

hahahahahaha FVF keep going up and DSR's keep going down. Now tell me how stupid is that??????????????????

eBay Encourages Top Sellers to Compete on Price   eBay Encourages Top Sellers to Compete on Price

by: Et tu, Brute!

Thu Nov 13 22:00:46 2008

Can we say... desperation?

eBay Encourages Top Sellers to Compete on Price   eBay Encourages Top Sellers to Compete on Price

by: Steve

Thu Nov 13 22:14:04 2008

I listened to the entire webinar, and the one thing I came convinced of is that eBay is trapped in their own little echo-chamber - they talk to each other, and pat each other on the back that they understand the marketplace, yet they don't have any tangible investment in inventory. I'll be damned if I'm going to get locked into a cycle of lowering my price, while trying to keep my DSRs high enough to get some of the dwindling traffic that eBay sends my way. I'm taking my 50,000+ feedback and leaving after January. My Amazon sales already exceed my eBay sales and at least Amazon UNDERSTANDS retail!!

eBay Encourages Top Sellers to Compete on Price   eBay Encourages Top Sellers to Compete on Price

by: bobcat

Thu Nov 13 22:55:38 2008

10 tears ago I started selling on ebay. 5 years ago I came to depend on it for my income. But eBay has destroyed all goodwill with me; I no longer respect eBay's policies. They have caused me to HATE them --"them" being whatever it is in that office in San Jose, California. They have destroyed community, morphed out of the fun thing Pierre created into fascism. There, I said it. Soon their stock will be what Wall Street derisively calls "a single digit midget." My apologies to little people.

eBay Encourages Top Sellers to Compete on Price   eBay Encourages Top Sellers to Compete on Price

by: i'd rather remain anonymous

Thu Nov 13 23:19:37 2008

i too have learned to hate ebay. i too have been a 10 yr seller. i went from ebay being 85% of my sales 3 years ago to 15% now. they deregistered me for nothing in july and i went through the hoops to get back on and came back to a store with no listings from 4000+. i had to restart all over again. and this to a lifetime 99.8% fb. and a shareholder yet.

the short sighted ebay morons even cancelled my negative feedbacks to the half dozen sellers that ripped me off as a buyer.

pull the knife out of your backs  folks - bonanzle is the new place to be. they i wager will win the contest in the anything but ebay race.

i have been there for a month now and seen some sales and they are smart and simple and free/cheap.

also ebid, ioffer. for books abebooks, alibris, bibliophile, choice books.

ebay was built by the sellers. run for the exits and establish that new marketplace.

rot in hell ebay.

eBay Encourages Top Sellers to Compete on Price   eBay Encourages Top Sellers to Compete on Price

by: VINCENT

Thu Nov 13 23:25:24 2008

As I contemplate this additional action by ebay management, the first word that comes to mind is ''obtuse''. These guys just keep squeezing the old goose until one day they will wake up with a hand full of feathers and a lifeless bird. They are the best thing that has ever happened to the competition. More than a few sellers are working their plan B to move business to another venue.

eBay Encourages Top Sellers to Compete on Price   eBay Encourages Top Sellers to Compete on Price

by: Synonymous

Thu Nov 13 23:33:27 2008

A bit of a nonsequitir, but the report on the webinar pushing the auction format links here, so: I'm sorry, but auctions are just untenable for me nowadays.  I've gone to nigh-all Fixed Price for my Store  -  my customers want to buy their items now now now  -  but I tried a couple auctions recently to test the waters.  Thank goodness I had reserves  -  the prices were utterly abysmal.  I wasn't overvaluing the items  -  they've sold for way above the auction prices before.  Serious customers, though, simply don't want to wait around for seven days to maybe or maybe not buy something when there's another seller a click away offering a certain buy and an instant transaction.  The only ones who bid on auctions, then, are those who don't really care if they get the item  -  hence the paltry prices.

eBay Encourages Top Sellers to Compete on Price   eBay Encourages Top Sellers to Compete on Price

by: Mechelle

Thu Nov 13 23:33:41 2008

It would serve those of us selling our merchandise on eBay well to become familiar with economic coercion.  

"Economic coercion is when a controller of a vital resource uses his advantage to compel a person to do something he would not do if this resource were not monopolized. If someone is the owner of the only water supply, then the owner can compel the thirsty person to pay an exorbitant price for that water or have him perform enormous labor. This is also referred to as a form of exploitation. It has been argued that as the global economy has expanded greatly in scope, economic coercion has replaced other forms of coercion such as coercion involving physical or military force."

Economic coercion requires market power. In the above example, the coercer's refusal to supply the coercee would be meaningless if the coercee had access to other independent sources of supply. But the coercer can turn his conditional refusal into a vital threat only because of his coercive monopoly over an essential resource, with no other substitutes."

IT IS one thing for a business on their own to make decisions to slash prices hoping to beat out their competition, but eBay rigging the system as such is coercion and is a criminal offense.  

"...economic coercion is generally unlawful under most systems of anti-trust legislation, where it can amount to a criminal offense – under the Sherman Act of the US".

Who would agree to such clear self-harm if they were not being compelled by use of a substantial threat (not exposure - no sales - no income).  

All of eBay's behavior concerning the low pricing and free shipping pressure is economic coercion- it is a crime!
 

eBay Encourages Top Sellers to Compete on Price   eBay Encourages Top Sellers to Compete on Price

by: Tom

Thu Nov 13 23:52:35 2008

I was just listing some more rare CDs today, and on one of them that typically sells in the $25 to $35 range, eBay pops up with the message "Recent items like yours have sold for an average price of $3.00."

Bologna.

How does it profit THEM (since that's all that concerns them anyway) to try to encourage low prices?

eBay Encourages Top Sellers to Compete on Price   eBay Encourages Top Sellers to Compete on Price

by: chris

Fri Nov 14 00:27:23 2008

The folks running eBay are running it into the ground. As for their being an economic coercer--sure: it could be true by either plan or simple delusion that they're 'doing good'.

I have to stick around--I'm dependent now on the income for a variety of reasons, and I don't like the feeling. I'm still thinking that the shit will hit the fan in January of 2009 when the latest round of BS hits the fan.

eBay Encourages Top Sellers to Compete on Price   eBay Encourages Top Sellers to Compete on Price

by: mindelec

Fri Nov 14 00:31:16 2008

we are supposed to take pricing advice from people who have never sold for a living on the site?

ebay is becoming like walmart in how it treats it's business "partners".

eBay Encourages Top Sellers to Compete on Price   eBay Encourages Top Sellers to Compete on Price

by: SilentJimDotCom

Fri Nov 14 00:59:34 2008

Since when is selling brand new popular electronics on eBay (or anywhere else for that matter) profitable for anyone?

The margins stink on new electronics across the board! It's quite possibly the WORST product to try to sell for a living.

eBay still has plenty of opportunity left in it and I personally know many people that are doing well.

One key for all of them is that they DO NOT try to sell something that is easily found 1,000,000 other places at competitive prices!

Jim Cockrum
http://www.SilentJim.com

eBay Encourages Top Sellers to Compete on Price   eBay Encourages Top Sellers to Compete on Price

by: eBuyer Feedback

Fri Nov 14 02:01:28 2008

I have news for you, eBay, low price usually sacrifices customer service.  I OFTEN get requests for help from buyers who bought something from my much cheaper competition complaining they won't help them with their problem.  Also as price decreases (for the same item) the odds of it being a scam or a fake dramatically increases.

Sounds to me like eBay is having seconds thoughts.  Wasn't this the justification for removing stores from search almost 3 years ago?  There were a bunch of new items that were poorly priced leading to buyer confusion.  Now you come up with this hybrid fixed price/store format and complain sellers are charging too much.

eBay Encourages Top Sellers to Compete on Price   eBay Encourages Top Sellers to Compete on Price

by: Carol

Fri Nov 14 02:01:46 2008

I've been selling on ebay since 1997 and listened to the entire webcast and Q&A.  Many of the things said made sense to me, but it was abundantly clear that many of the new policies were formulated with a limited number of selling situations in mind - and, more important - that ebay isn't going to revisit the policies just because they're wreaking havoc with individual sellers' businesses.

Ebay's answers to some of the well-thought-out questions were less than impressive.

Several people asked why their shipping DSR hasn't gone up even when they've offered free shipping.  The ebay reps didn't address this issue effectively.  

One person asked why ebay doesn't make a programming change to automatically assign a 5 shipping cost DSR on items with free shipping.  How elegant and simple that would be - unfortunately one of the issues ebay didn't respond to.

I've always been grateful to ebay for establishing a robust online marketplace, but I have to admit that it's getting a lot harder to support them in the face of their apparent lack of support of sellers.

eBay Encourages Top Sellers to Compete on Price   eBay Encourages Top Sellers to Compete on Price

by: Marvin

Fri Nov 14 02:14:26 2008

I don't understand why anyone would want to compete on price alone, especially on a site that is actively seller unfriendly.

Learning about Internet Marketing and how to drive traffic is *relatively* easy and something any serious business should be doing anyway. Take a look at http://www.thirtydaychallenge.com for a free online introduction to Internet Marketing. The information presented here CAN help those that want to break free of the oBay bonds to do so!

eBay Encourages Top Sellers to Compete on Price   eBay Encourages Top Sellers to Compete on Price

by: mechelle

Fri Nov 14 02:34:22 2008

"How does it profit THEM (since that's all that concerns them anyway) to try to encourage low prices?"

The design of their brilliant plan is to sacrifice those who are reliant - dependent - absolutely must be on eBay to support their family ....by pushing them into selling at a loss simply to generate cash to pay their mortgage and if they do not comply with eBay's ransom demands they will not be able to pay the bills.  eBay is betting that a bunch of 1, 2, 3, 4, 5 .... sales will drag in the consumers and with the new PayPal only policy the expected onslaught of consumers rushing to the marketplace (to buy so and so's   CD that typically goes for 25 - 30, but now can be bought for 3 dollars, because eBay held his item hostage until he priced it at what they believed it should cost) and accelerate the acquisition of PayPal users to further entrench the PayPal service in the off eBay market.

It is cheaper for eBay to exploit, kick around, and frankly violently abuse us than it is to purchase their own damn merchandise.  Instead they have hi-jacked ours and enslaved us to sell below cost with free shipping to drive consumers to visit eBay's dollar store and Pay with the PayPal beast.

Stop thinking short term - it isn't about our fees- clearly they undermine our presence in the marketplace by placing listings of directly competing sellers on our listing without our knowledge whatever it takes for the buy now button to be clicked- it isn't even about sucking more fees from us by forcing PayPal.  We are nothing in CEO Donahoe's grand plan of online payment world domination, but a tool.

Here see it for yourself and then put the pieces together.

http://tinyurl.com/5n9e5r


eBay Encourages Top Sellers to Compete on Price   eBay Encourages Top Sellers to Compete on Price

by: john Cowell

Fri Nov 14 05:12:17 2008

For goodness sake, lets get back to basics. I offer an item on Ebay, it is clear exactly what the postage costs are, I know what I want for it. If the customer does not like the price or shipping costs, either bid less or don't bid at all. Let us not spoon feed the buyers into ''spoiled children''. If they can read the terms, they can choose.#John Cowell

eBay Encourages Top Sellers to Compete on Price   eBay Encourages Top Sellers to Compete on Price

by: Wesley

Fri Nov 14 05:25:23 2008

It seems like everyone at ebay is brainwashed into believing what they have done and are doing is good for the company and the marketplace.  What a huge disaster they have created.  Someone over there really needs to wake them up.

eBay Encourages Top Sellers to Compete on Price   eBay Encourages Top Sellers to Compete on Price

by: Sue

Fri Nov 14 06:14:51 2008

Where's the Google solution?

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