|Wed June 10 2009 13:55:20|
eBay's Vendor Pricing Wars - Really a Good Thing?
By: David Steiner
Everybody loves a bargain - no arguing that. But the pricing changes, lock-ins, bonuses, etc. that some of eBay's Certified Third-Party developers have been throwing around lately make me wonder if there is a price to be paid somewhere down the line for trying to attract sellers who may be in flux.
I remember using several excellent free tools such as AuctionSubmit and Invenna Software, which sadly, are no longer around. While sending out update reminders to services on the AuctionBytes Auction Management Services chart the other day, I noticed that nearly 20% of the listing services on the chart that weren't directly owned by eBay were either no longer in business or had merged with other companies. That percentage would be even higher had I not removed some of the "dead" sites a few years ago.
The point is, right now, it's a bit of a "land-grab" for sellers who may be in transition. The fact that vendors are competing is great for sellers because it keeps fees competitive, but the vendors themselves are vulnerable to one company, eBay, since they serve eBay sellers.
Offers are being made that may come back and bite companies squarely in the profit margin down the road, limiting their ability to adjust to economic conditions and industry changes. By attempting to attract new customers, could some be overreaching? Services have real overhead and costs, such as development, hosting, public relations, advertising and technical support - just to name a few. The main players in this pricing war are also eBay Certified Providers, a moniker that they pay for ($3000/year plus training costs plus $150/individual for consultant or engineer certification with an another annual $75/individual annual re-certification fee; all payment paid to eBay prior to gaining actual certified status). Another factor to consider is the cost vendors incur in keeping up with eBay changes, which according to those we've spoken with over the years, is formidable.
It's definitely a "buyers" (i.e., sellers) market right now in the 3P Service space, so I'm sure that sellers are weighing their options carefully, but a few questions come to mind:
I expect that there will be supporters and detractors of all of the services commenting here, but I'd like to take a bigger picture view of this issue, so setting aside the pom-poms and slingshots for a moment, give us your perspective on what factors will determine your choice in a service. And third-party service providers - you're welcome to comment as well, but please identify yourselves as such.
- What is it that you expect from your service provider?
- How do you view free services? If the service is free or very inexpensive, are you assuming that it comes with little or no support?
- What is the balance between price and features/support that you look for before signing up with a service?
- When you change services, how big an impact does it have on your business?