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Tue Mar 3 2009 22:35:57

Does Multi-Channel Trend Really Hurt eBay?

By: Ina Steiner

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It seems everyone is going multi-channel these days, and not just online sellers. Long-time eBay developers Auctiva and Vendio are both launching platforms for sellers to launch their own store in addition to allowing them to launch listings to eBay, Amazon and other marketplaces. eBay developer Kyozou is adding support for Bidtopia. And even Alibris is adding support for additional marketplaces for its online booksellers.

So does eBay have anything to worry about? Yes, but not to the degree one might think. First of all, larger sellers went multi-channel a long time ago but continue to sell on eBay because of the strong traffic. (Though because many sellers are using eBay listings as a customer acquisition tool, it's possible this will come back to haunt eBay.)

But as sellers go multi-channel, there's also an increasing trend for alternative sites to accept eBay's online payment service PayPal. Delcampe and Etsy are the latest examples of marketplaces embracing PayPal on their sites. So while sellers large and small may continue to diversify, many continue to offer PayPal, so eBay continues to get a cut from a percentage of these off-eBay transactions.

Over the years, eBay has been ambivalent about whether it should help sellers who wanted to launch their own stores. It could have kept many mid-level sellers happy with eBay Stores and ProStores. But philosophical, policy and technology issues held them back. Now eBay may not fully control the marketplaces on which sellers participate, but through PayPal, eBay does continue to get a piece of the pie.




Comments (21) | Permalink

Readers Comments

Does Multi-Channel Trend Really Hurt eBay?   Does Multi-Channel Trend Really Hurt eBay?

by: L

Tue Mar 3 23:57:10 2009

I offer PayPal and Google Checkout for my eCrater Store.  So far, 28 out of my last 31 eCrater buyers have chosen payment through Google Checkout rather than PayPal.  Maybe PayPal gets a piece of the pie, but perhaps a shrinking piece.

The reason may be that buyers don't like the difficulty in trying to use a credit card through PayPal . . . if you have a balance in your PayPal money market, PalPal won't allow you to make a credit card purchase till your money market funds are depleted.

(Some credit cards offer 1 to 5% cash back on purchases, or frequent flyer miles, or whatever . . . so it's a no-brainer . . . I'd go with Google every time, as a buyer)

Does Multi-Channel Trend Really Hurt eBay?   Does Multi-Channel Trend Really Hurt eBay?

by: ebay = penny stock

Wed Mar 4 07:25:31 2009

With Ebays history does anyone think Ebay really cares.

Ebay is a sinking ship and the captain and his crew are going to be bailing out soon.

Does Multi-Channel Trend Really Hurt eBay?   Does Multi-Channel Trend Really Hurt eBay?

by: George Maffou

Wed Mar 4 07:44:03 2009

I think the development of all of the alternative sites can only help eBay corp's revenue. They are dropping their listing fees anyway, and PayPal makes up nearly 50% of their gross revenue. A growing segment of that is from off-eBay transactions. I checked about 10 of the top alternative sites, and except for Amazon, they all accept PayPal.

Does Multi-Channel Trend Really Hurt eBay?   Does Multi-Channel Trend Really Hurt eBay?

by: Scot

Wed Mar 4 08:04:31 2009

@george maffou

I agree with you - the diversification of eBay sellers onto other channels can only increase eBay's revenue - as long as they continue to accept PayPal as a preferred payment method.

In fact, as sellers migrate to other marketplaces and bring PayPal along with them, they are STRENGTHENING the brand, and entrenching PayPal more firmly. Kind of ironic, actually - rebellious eBayer are acting like Johnny Appleseed and planting PayPal more extensively across the 'net.

Does Multi-Channel Trend Really Hurt eBay?   Does Multi-Channel Trend Really Hurt eBay?

by: Patrick Alexander

Wed Mar 4 08:17:26 2009

When moving to other sites or starting your own website, here's some good advice:

Be smart. Don't drag eBay's bastard stepchild - PayPal along.

If you do, you are just helping spread the virus.

Do you really want to give ANY money to a company that has hurt so many people ??

Make a clean  break. It will feel good.

Does Multi-Channel Trend Really Hurt eBay?   Does Multi-Channel Trend Really Hurt eBay?

by: unaware

Wed Mar 4 08:18:32 2009

I can see it now.... someday in the not so distant future, eBay changes its name to PayPal and shuts down their auction and marketplace businesses. They will become a 100% payment and financial business. They will find it increasingly hard to compete as a retail site and will decide to just shut it all down.... perhaps it would be the best thing for all involved? Don't laugh... this sort of thing has happened before and there is no reason why it could not happen to eBay/PayPal.

Does Multi-Channel Trend Really Hurt eBay?   Does Multi-Channel Trend Really Hurt eBay?

by: Pinchrosemary

Wed Mar 4 08:19:29 2009

I'm not using multi-channel selling to hurt Ebay and I don't waste a second of my time giving any thought their profits, success or failure...at least not since I sold my Ebay stock last August.

Ebay may be getting a piece of my MC sales through PayPal, but at this time and for us, PayPal provides a decent service for it.

However, I see a growing portion of my Bonanzle and website sales pay through Google Checkout. From what I gather, there are some people who are so anti-Ebay right now, that I can't even mention PayPal or Ebay in my correspondence to them and many of my old Ebay customers are very happy to find me elsewhere.  I gather Ebay's policies isolated quite a few people and they now want nothing to do with them or PayPal.  Actually, it was some of my old, good, Ebay repeat customers that pushed me to a multi-chanel platform faster than Ebay did.

Perhaps Ebay made an error in the assumption that my buyers were their customers and not mine. For some of them, the grass is greener on elsewhere.

http://www.bonanzle.com/booths/pinchrosemary

Does Multi-Channel Trend Really Hurt eBay?   Does Multi-Channel Trend Really Hurt eBay?

by: Gail

Wed Mar 4 09:48:48 2009

I don't worry about hurting ebay as they are very good at shooting themselves in the foot. I sell on ecrater and Amazon. Amazon doesn't use paypal and less than half my ecrater customers do, the rest use google. I offer paypal as that is what many customers are used to and to have them coming to a 'new' site and then have to deal with a 'new' payment program would be enough to scare some of them off of making a purchase. I don't want to scare customers off.

However, I prefer the use of GC. It is cheaper for me AND you can set up a coupon codes with it. Each and everyone of my customers on ecrater no matter how they paid, get a coupon encouraging them to use Google for their next 5 purchases to get 10% off of those purchases. Goggle collects my money and the next day dumps it in my business account. Very convenient.

But I do offer a choice as I no longer accept MO or other types of payments. However, my few Paypal payments that I get aren't going to make ebay wealthy. In January, when I closed my ebay store, I paid ebay/Paypal almost $300 in fees (well below what I used to). In February they got less than $6! Hard to compare with Google checkout because their fees are so much less. When you think about all the other fees they are losing, that is a lot of Paypal accounts that they need to pick up to make up for the dissatisfied sellers that left ebay and all their fees in whatever guise.

Does Multi-Channel Trend Really Hurt eBay?   Does Multi-Channel Trend Really Hurt eBay?

by: Rob

Wed Mar 4 11:00:58 2009

We offer both paypal and google checkout as a payment options at our website, bonanzle booth, our auctiva store and our Ioffer store.

BUT, since we were basically forced off Ebay's seller platform, we encourage all our customers to use google checkout and even offer a 2% coupon code to do so.


We closed two ebay stores down last year. Our typical fees (Ebay & Paypal) including listing fees, FVFs and PayPal commissions/fees for those two stores were averaging us roughly $2400 monthly to do business on Ebay. Now that we no longer sell on ebay, and most of our customers are using google checkout, our total fees Ebay/PayPal now collect from us monthly is less than $100.

Does Multi-Channel Trend Really Hurt eBay?   Does Multi-Channel Trend Really Hurt eBay?

by: @unaware

Wed Mar 4 11:32:01 2009

I HOPE YOU ARE CORRECT. Then watch the masses swamp Bonanzle.com and iOffer.com.

Does Multi-Channel Trend Really Hurt eBay?   Does Multi-Channel Trend Really Hurt eBay?

by: don't believe you

Wed Mar 4 13:58:05 2009

@unaware

You state that ''Don't laugh... this sort of thing has happened before and there is no reason why it could not happen to eBay/PayPal.''  

Could you cite one example of one eCommerce retailer at a similar size/scale to eBay who has just shut down in lieu of being a financial services company only?  I don't believe you can.  

One thing you are all missing is that eBay drove $60B of volume through it's site last year.  This size of a business doesn't just disappear off the map.  They may shrink a bit, but they aren't going anywhere.  Not that I blame some of you for thinking this since it's clear you comments are emotional in nature, likely because you have not been successful in innovating in your own businesses and want to blame eBay for that.

The reality is that eCommerce is going mainstream, and that process will kill off a lot of the smaller mom and pop businesses out there and only the fittest will survive.  Same thing is happening in the off-line retail world (think Wal Mart).  

Does Multi-Channel Trend Really Hurt eBay?   Does Multi-Channel Trend Really Hurt eBay?

by: Grim Reaper

Wed Mar 4 14:45:16 2009

@ don't believe you

You hit the nail on the head. Anyone making the success of their own business hinge on a 3rd party (eBay or others) does not have a solid business plan.

Of course, Ming the Merciless will make sure to put an anti-eBay a comment on every topic, with his ''death to eBay Corp in 2009''. Clearly the mindless Ming doesn't understand eBay's position as a corporation.

Does Multi-Channel Trend Really Hurt eBay?   Does Multi-Channel Trend Really Hurt eBay?

by: Care Less

Wed Mar 4 15:35:43 2009

Just as eBay could care less about their sellers' business position, most sellers could care less about understanding eBay's position as a corporation.  The only bottom line that counts is my own.

Does Multi-Channel Trend Really Hurt eBay?   Does Multi-Channel Trend Really Hurt eBay?

by: @don't belive you

Wed Mar 4 15:38:17 2009

One i can think of is :
Expereinced Books.com,
also i think there was one called something like bidpay or someting like that.
also, come to think of it Gemm books too, there are lots of examples if you think about it.

Does Multi-Channel Trend Really Hurt eBay?   Does Multi-Channel Trend Really Hurt eBay?

by: Miles

Wed Mar 4 15:46:49 2009

With Google Checkout being more or less free (for users of Adwords), who uses Paypal anymore?

After eight years of selling exclusively on eBay, we finally had enough. We closed our store, shut down our account, and after wondering why not, shut down our Paypal account.

We now sell exclusively from our website. We control 100% of our business now and it's great!

As one of the other commenters stated, don't drag Paypal into your new business model!

Google Checkout rocks!

Does Multi-Channel Trend Really Hurt eBay?   Does Multi-Channel Trend Really Hurt eBay?

by: unaware

Wed Mar 4 15:50:12 2009

don't believe you--- No I don't know of a eCommerce retailer of a similar size/scale to eBay who has shut down in lieu of being a financial services company... a bit to specific don't you think? I was thinking in terms of Boise... the paper and forest company who purchased OfficeMax (the office supply company) and then sold off all of their paper enterprises and took up the OfficeMax name and business.... Boise got out of their main business that was under performing and poor prospects for the future and took the name and business of a company that they had purchased as their new identity. EBay will not go away overnight but they will end up just another web site on the scrap heap of internet leaders who have faded into the woodwork.... a Yahoo or Netscape of the future. At some point they will realize that there is more money to be made as a PayPal and not as a retail site.... or will they screw THAT business up also?  

Does Multi-Channel Trend Really Hurt eBay?   Does Multi-Channel Trend Really Hurt eBay?

by: cataromma

Wed Mar 4 16:55:51 2009

Since I started using my own merchant account on our website, paypal transactions have dropped to a couple a month, GC around a dozen.  Most of the buyers are instead entering their credit card numbers for us to process at 1.99%.  Much cheaper than paypal.  GC is of course, free, (for now) as part of the rebate on adwords.

Does Multi-Channel Trend Really Hurt eBay?   Does Multi-Channel Trend Really Hurt eBay?

by: o.c.d.collectibles

Wed Mar 4 19:11:12 2009

Just think...had they managed their site better, they could have had ALL of that business on ebay! Now, "others" can profit from all of those NON EBAY sales, and EBAY   can feature all of their "favorite" retailers in the Ebaymartazon mall. Then the chips will fall as they may.

Does Multi-Channel Trend Really Hurt eBay?   Does Multi-Channel Trend Really Hurt eBay?

by: o.c.d.collectibles

Wed Mar 4 19:21:45 2009

By the way.Ebay made a huge mistake purchasing that "Bill Me Later" feature. What a bad thing for an economy that is beginning to rely less and less on Credit. Soon, we will all be relying on checks and money orders, when there is not much else left of the banks.. they will be lowering all the credit limits everywhere. People will HAVE to use cash to get what they want and need.

Does Multi-Channel Trend Really Hurt eBay?   Does Multi-Channel Trend Really Hurt eBay?

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

Thu Mar 5 17:26:43 2009

3-5-2009

Ebay stock again closes down today at $10.46 per share.

Even ebay's lapdog business 'reporters' and planted news stories aren't helping (LOL).

Death to ebay corp. in 2009.
NEG MEG (Whitman) in 2010.

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