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Thu July 3 2008 09:03:35

What Does This Have to do with eBay?

By: David Steiner

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The other evening, as I was multi-tasking, I happened to catch a story on the NewsHour with Jim Lehrer on a topic I ordinarily wouldn't have paid much attention to: Coffee. 
 
The story centered around the closing of 600 Starbucks stores and 12,000 employee layoffs. While I love a good cup of brew in the morning, I don't own stock in Starbucks and I don't actually care much for their coffee. But what struck me was the storyline about a company that has fallen on recent hard times. Starbucks stock has lost nearly half its value in the past year, and traffic to the stores is down for the first time since the company's inception.
 
Perhaps it's the economy - $5 for a Cafe Latte may be one of those luxuries that people are cutting out of their budget. Competition from other restaurants that offer specialty coffee - McDonalds and Burger King, for example - may have cut into Starbucks' business. Or maybe the company has become oversaturated, as evidenced by the jokes about a Starbucks building a Starbucks inside a Starbucks.
 
But what the company itself has determined is that they have become too corporate, and have lost the appeal that made Starbucks so popular. According to the story, "It may be, in its drive to expand, Starbucks, which defined the coffee experience for many Americans, inadvertently ceded that experience to other, smaller coffee shops."
 
Seattle area marketing analyst Harvey Hartman made this observation, "What consumers are starting to sense is that Starbucks is losing this authentic, local, unique kind of "real" experience and is really become more bureaucratic, more mediocre, not as exploratory and as fun as it once was."
 
In an effort to regain some of their mocha mojo, Starbucks brought back CEO Howard Schultz, credited with much of the early wild success of Starbucks, at the beginning of this year to try to lift the company out of its quagmire. The stores will be grinding beans again in their stores (for the aroma), and replacing some of the equipment behind the counters to make ordering your coffee a more personal experience.  In essence, Starbucks is exploring their roots to find a direction for their future.
 
So what does this have to do with eBay? Maybe nothing. Or perhaps it illustrates that it's never too late to wake up and smell the coffee.

------
 
An MP3 file of the news story can be downloaded here




Comments (42) | Permalink

Readers Comments

What Does This Have to do with eBay?   What Does This Have to do with eBay?

by: Patrick Alexander

Thu Jul 3 09:21:13 2008

Wow, David. Great column!

''Back to the basics'' has traditionally been a winning way to go when a business starts failing.

eBay was built & grew on very simple - but very good ideas.

Yet, eBay is going the other direction at warp speed.

And with every change things appear to get worse, not better.

Time will tell if they are right, but it ain't lookin' too good....

What Does This Have to do with eBay?   What Does This Have to do with eBay?

by: Meg, where are you?

Thu Jul 3 09:41:43 2008

Starbucks brought back CEO Howard Schultz

Next weeks paper:

Ebay brought back CEO Meg Whittman

What Does This Have to do with eBay?   What Does This Have to do with eBay?

by: Kal

Thu Jul 3 10:16:54 2008

Next weeks paper: ''Ebay brought back CEO Meg Whittman''

Well, I think we're going to have to at least wait until election day, until after the Republicans loose. Then Meg will be free to perhaps come back.

Wishful thinking? Perhaps. One can ONLY HOPE that eBay will realize the error of their ways. Other companies have, and have corrected the errors. Only time will tell.

Current management at eBay sucks. These guys and gals are a bunch of hacks.

What Does This Have to do with eBay?   What Does This Have to do with eBay?

by: Jon McAuliffe

Thu Jul 3 10:22:55 2008

Great article, Ina.  Very funny because it's very true.  Most of us are sick to death of corporate culture.  We're all looking for something more real than the mediocre, phony commerciality of today's marketplace.

What Does This Have to do with eBay?   What Does This Have to do with eBay?

by: hookupjjj

Thu Jul 3 10:26:46 2008

Me thinketh you hit the nail on the coffin... that is Ebays coffin.

What Does This Have to do with eBay?   What Does This Have to do with eBay?

by: Lisa B.

Thu Jul 3 10:38:19 2008

I really believe that Ebay will not return to normal until the current crop of exec's are booted out. They've done so much damage and caused so much pain and resentment.

Lorrie made a plea to give them another chance, but what have they done to make things better? I have no faith in their abilities other than to cause more chaos and disruption. That theory needs to be retired, along with JD.

What Does This Have to do with eBay?   What Does This Have to do with eBay?

by: BIG DOUG

Thu Jul 3 10:53:41 2008

I DO NOT THINK THAT BRINGING BACK MEG WOULD CHANGE THINKS.. I THINK SOME OF THESE STUPID CHANGES MADE WERE IN THE WORKS WHEN SHE LEFT..WHY IS IT WHEN ALL THINGS FAIL ITS BACK TO BASICS?. WE DID THEY LEAVE IN THE FIRST PLACE?.

What Does This Have to do with eBay?   What Does This Have to do with eBay?

by: Randy Smythe

Thu Jul 3 11:08:54 2008

Well bringing back Starbucks former CEO hasn't solved their problems so I wouldn't recommend that with eBay.

What they apparently don't teach in b-school is that there is a ceiling for every business and eBay reached theirs.

They tried to change this back in 2006 when they made a half-hearted attempt at saving the Auction business after making a half-hearted attempt at creating a Fixed price marketplace.

Too many half-hearted attemps forced them to make the changes they are making now and this too will fail.

How about this eBay? Spin-off PayPal, sell Skype and take eBay private. Once ebay is private bring back Jeff Jordan to run the company.

What Does This Have to do with eBay?   What Does This Have to do with eBay?

by: T.K.

Thu Jul 3 11:09:39 2008

Meg was deaf to the community as well--Just not as big of an a-- as J.D. Need to reach back BEFORE Meg to raise this sinking ship.

What Does This Have to do with eBay?   What Does This Have to do with eBay?

by: T.K.

Thu Jul 3 11:10:13 2008

Meg was deaf to the community as well--Just not as big of an a-- as J.D. Need to reach back BEFORE Meg to raise this sinking ship.

What Does This Have to do with eBay?   What Does This Have to do with eBay?

by: Just Me

Thu Jul 3 11:18:04 2008

Why does everyone think 'back to basics' means resetting the clock and dropping all the good along with the bad?

''Back to Basics'' means finding the core of what was best back then and bringing it back, perhaps in a slightly updated form, to re-invigorate the present.

I like some of the recent changes -- Best Offer is working very well for me, much better than BIN ever did.  And I like the free Gallery images -- saves me a ton of money in a category that requires gallery images.

Let's not throw out the baby with the bathwater -- there were a number of things about 'the good old days' that weren't all that good.

But I haven't read specifically what anyone would want to bring back... just what they want to get rid of.  That's like throwing the captain, most of the crew, and the charts overboard and then asking ''ok - who left knows how to steer this thing... and by the way, where the heck are we, and where are we going?''

What Does This Have to do with eBay?   What Does This Have to do with eBay?

by: ebayer

Thu Jul 3 11:29:53 2008

"That's like throwing the captain, most of the crew, and the charts overboard and then asking ''ok - who left knows how to steer this thing... and by the way, where the heck are we, and where are we going?"

I think the deck hands could do a much better job, then the captain and the crew!

Throw em overboard!

What Does This Have to do with eBay?   What Does This Have to do with eBay?

by: Randy Smythe

Thu Jul 3 12:07:48 2008

@Just Me,
I agree that you would have to keep some of the good things, but “Back to the Basics” doesn't mean back to the beginning.

There are so many different constituencies on eBay: Auction sellers, fixed price sellers, Store Sellers, sellers of new product, used product, collectibles, vintage, businesses with employees, sole proprietors, hobbyists as well as those just trying to make ends meet. You are never going to make all of them happy on one site; they are fighting against each other.

Level playing field works for some, not for others.

eBay could be a search engine for all of them but it can’t be a marketplace for all of them – If they became a search engine they should hand that job off to Google.

eBay can be fixed and IMO thrive, but not by morphing into a sad excuse for Amazon

What Does This Have to do with eBay?   What Does This Have to do with eBay?

by: Patricia

Thu Jul 3 12:51:26 2008

To put it bluntly, I believe the suits at Ebay are too darned dumb to ever understand the difference between excitement and clinically organized retail.  They fail to understand that in their desperate attempt to make more and more money they are killing the very thing that generated all the big bucks in the past.  So, they'll plod ahead until Ebay is but a cheesy clone of Amazon and then realize the sales just aren't there afterall.  In the meantime they've made thousands of small sellers hate their guts...and they will never regain their trust ever again!  They've lost the meaning of excitement and the meaning of KISS!!!  So, the joke is on them in paying Donahoe and the rest all those big bucks - its like paying you're own executioners!

www.ACEOart.net

What Does This Have to do with eBay?   What Does This Have to do with eBay?

by: Patricia

Thu Jul 3 13:02:34 2008

"Lorrie made a plea to give them another chance, but what have they done to make things better? I have no faith in their abilities other than to cause more chaos and disruption. That theory needs to be retired, along with JD. "

There's nothing worse than an executive who can't convince their customers that they are speaking genuinely.  I don't get genuine from this person - what I get is a line here or there that I really want to hear - but its only thrown out as bait - not as the real thing.  We're all so sick to death of the stale ebay-speak!

I believe auctions can co-exist nicely with fixed priced listings if both were done earnestly and small sellers were given back some of their rights and were treated as fellow human beings.  Without those ingredients, this company is doomed and all of them combined are so arrogant that they cannot see it!  Look around Ebay - you're dying and soon phoney buy listins aren't going to cover the lack of sales!

www.ACEOart.net

What Does This Have to do with eBay?   What Does This Have to do with eBay?

by: RichardC

Thu Jul 3 13:45:48 2008

Ina, It is sorta like what happened after Steve Jobs returned to the helm of Apple.

What Does This Have to do with eBay?   What Does This Have to do with eBay?

by: ma

Thu Jul 3 15:04:31 2008

Ive been paying ebay for 9 years. I made more with 20 auctions than I do now with 50 auctions. Things fell apart when MW came along. And have gone down hill since. The new beta switched on me yesterday and I had 0 feedback. Of course I opted out but when will they force it on me and make me a 0 again? I was able to write to someone at ebay in past years. Now they dont care to answer. By the time they answer I have figured out the problem and fixed it. I have brought at least 8 sellers into ebay. Now at least 4 are writing me or talking on phone to tell me how sad it all is.
One lady sells used kids clothes to support her grandkids who she is adopting, got auction blocked because she said the brand name of the actual pants. On one hand everyone is saying recycle save the planet and on the other it is saying, oh but dont do that. Crazy is what I think. I like most will struggle along for a while longer. But not forever if they dont get their act together.
And yes. Starbucks made the biggest mistake when they put in the automatic coffee makers instead of having the coffee brewed and mixed by the worker.
I can make the same cup of coffee in my kitchen now and save 4.00. Basically now its all the numbers, get your cup and get out of the way. SAD
and much like ebay. Ok Ive vented, back to work. ma

What Does This Have to do with eBay?   What Does This Have to do with eBay?

by: Vince

Thu Jul 3 15:25:05 2008

David, great article.  Informative and you analyzed the downfall of Starbucks wonderfully.  I love how subtle the comparison to eBay was, and I couldn't agree more.

Thanks.

What Does This Have to do with eBay?   What Does This Have to do with eBay?

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

Thu Jul 3 15:55:41 2008

Next to canning ebay's entire upper management team, the LAST thing ebay should is bring back Meg Whitman.

She and Bill Cobb were the architects of the mess we're in now.

What ebay so desperately needs is honest, ethical management NOT the liars and thieves!

What Does This Have to do with eBay?   What Does This Have to do with eBay?

by: Just a Seller

Thu Jul 3 15:57:27 2008

Thank you David for an extremely intelligent analysis - the comparison to eBay is obvious.

I was just hit by the best match monster. 100% feedback, 5,5,4.9,4.9 DSR, the item itself sells 3-4 times a week (fixed price) and now it's stuck in the last page, with  poor chances to get traffic and sales.

The talking monkeys on live help are not helpful at all and I am clueless as for the reasons of this sudden, unexpected and unjustified exile of my items.

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