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Thu Sept 16 2010 19:31:59

What's Taking eBay So Long to Get Big Brands?

By: Ina Steiner

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On Wednesday, eBay announced its new sales dream-team charged with targeting retailers and brands to encourage them to participate in "flash sales" and launch branded outlet storefronts on eBay. However, I've been writing about eBay's efforts to get major retailers and brands on to its site for the past 2 years, and it seems like it's taking a long time and a lot of effort to get the job done.

In October of 2008, eBay appointed Frederick Crosby to manage a team to expand eBay's large merchant ecommerce business in North America. Two years later, eBay has launched a new team headed by ChannelAdvisor's Michael Jones, who is now Crosby's boss (see yesterday's Newsflash article). Yes, there are large retailers and brands coming on board, but given that eBay is pinning its turnaround on this strategy, it seems to be a painfully slow process.

In 2008, eBay was still denying its strategy to longtime sellers, despite the then-imminent launch of an on-ramp called Large Merchant Services. eBay's seller advocate "Uncle Griff" denied eBay's move in this direction using the corporate blog written by Richard Brewer-Hay to refute a statement that longtime sellers eBay would find themselves competing with the manufacturer of the product they sell who would get free listings and better exposure. "The statement regarding "better exposure" for certain sellers is absolutely incorrect," he wrote. "A seller with a large inventory is not necessarily going to get better exposure than a seller with less inventory."

At least eBay is finally being more open about its efforts to favor large brands such as Disney - it announced in the spring its plans to highlight items that are offered directly from brand owners by displaying their logos in search results.

Given the preferential treatment eBay is giving brands, including special promotions and email marketing campaigns, such as this one for Calvin Klein, it looks as if eBay's sales force has to offer a lot of concessions to get brands to commit to selling on its marketplace.




Comments (44) | Permalink

Readers Comments

What's Taking eBay So Long to Get Big Brands?   What's Taking eBay So Long to Get Big Brands?

by: Digby
Web Site

Thu Sep 16 19:44:08 2010

If I owned a big brand, which I dont yet, there is no way I would sell anthing on ebay.

That woudl just cheapen my brand.
Ebay is an auction site where people get rid of stuff they don't want.

Every big brand probably already has its won website, and they would not want to upset their bricks and mortar sellers anymore.

But this new division of theirs is just another reason fro small sellers to leave ebay as soon as they can.

What's Taking eBay So Long to Get Big Brands?   What's Taking eBay So Long to Get Big Brands?

by: My Own Website Not Quite Paying My Bills Yet

Thu Sep 16 19:59:20 2010


"What's Taking eBay So Long to Get Big Brands?"

Gee, that's a tough one.

What's Taking eBay So Long to Get Big Brands?   What's Taking eBay So Long to Get Big Brands?

by: Ron

Thu Sep 16 20:34:56 2010

EBay has suffered from an identity crisis ever since it slowly morphed from being an auction website, first offering “Buy It Now”, then fixed price items and store inventory.

They have a real problem understanding what to do with their brand.  It was once associated with “fun”, social networking, and a place to find the unusual, the wonderful and hard to find.

Now, the brand is reviled by a large segment of its former users, it’s no longer fun, and Donahoe has tried to position it as a place to get “great deals”.  In other words, it’s a place to find items at the lowest price.  Yet, eBay mandates exceptional service and free shipping from its sellers.

Anyone who has taken Marketing 101 knows that low price and exceptional service are diametrically opposed.  There is a cost to providing service and it has to manifest itself in pricing.

How can they possibly attract highly valued brands such as Disney when their own brand positioning is so hopelessly confused?

Well-established brands protect their name as a lot of investment goes into developing that brand.  Brand name is what allows a company to charge a premium for their product.  So why would they offer their product on a marketplace website that promises lowest prices?  And, how can eBay even offer low prices when their fee structure extracts a high percentage of the sales price of an item?  A well established brand like Disney doesn’t need to either sell their items on eBay or add that kind of cost to their items – they’ve got their own websites and distributor websites to sell their goods.  Even if eBay offered a special low fee structure to these large retailers, eBay loses by diminished revenues or lost opportunity revenues through overcrowding on the site.

I don’t know who’s strategizing over at eBay, but it appears that they don’t even grasp very basic concepts.  I’m not surprised that this program to attract large manufacturers has been slow in gaining ground.  It seems that eBay is pursuing any idea that will create revenue or volume to the detriment of the long term larger picture, which should be creating a cohesive site that delivers value for well defined market segments.  

What's Taking eBay So Long to Get Big Brands?   What's Taking eBay So Long to Get Big Brands?

by: Helen Highwater

Thu Sep 16 20:49:23 2010

Ron Observed: "There is a cost to providing service and it has to manifest itself in pricing."

Helen Adds: When shopping on E-bay here are your choices:

1) High Quality
2) Fast Shipping
3) Inexpensive

PICK TWO! (You can't have all three.)

What's Taking eBay So Long to Get Big Brands?   What's Taking eBay So Long to Get Big Brands?

by: pete

Thu Sep 16 20:49:58 2010

Why would any large branded company:
1. Wish to be associated with eBay ..the internets home of fraud and fakes
2. Be associated with discount prices which cheapen their brand
3. Pay fees (even discounted) to eBay and Paypal (remember from July 2011 paypal only), when many have their own websites
4. Damage to brand identity via the eBay feedback system
5. Deal with some of the lowest educated buyers on the internet
6. Constant changes to the platform/policy’s etc, making it impossible to plan even 3 months ahead

What's Taking eBay So Long to Get Big Brands?   What's Taking eBay So Long to Get Big Brands?

by: fat freddy

Thu Sep 16 21:24:25 2010

Why would a big well known brand want to do business on Ebay.

They usually have their own website and sure don't need Ebay's help.

Besides to do business with the slimest company on the internet with a reputation of scammers and thiefs no self respecting company would come within a million miles of Donut hole or his sleezy business.

Most businesses only have their good will and being associated with ebay and all the rumors out their would destroy them.

What's Taking eBay So Long to Get Big Brands?   What's Taking eBay So Long to Get Big Brands?

by: Jeff S
Web Site

Thu Sep 16 22:00:51 2010

Ina- You answered your own question in this discussion, a year ago:

http://www.auctionbytes.com/cab/abn/y09/m09/i02/s01
>The
next marketing manager to greenlight eBay as a channel to 'enhance consumer awareness and branding objectives' may find herself soon thereafter filing an unemployment claim.

What's Taking eBay So Long to Get Big Brands?   What's Taking eBay So Long to Get Big Brands?

by: Ron is Right!

Thu Sep 16 22:37:57 2010

eBay will never attract big brands. The two reasons for this are simple:

1) eBay has consistently ignored fraud, and has a reputation as a home for counterfeits. This reputation is earned daily, as the website has no idea how to police its listings.

2) Identity. Ron is right that eBay is confused about what it is. Are they an auction site? A fixed-price site? A home for small business? An outlet for blemishes and overstock? Simply put: if eBay can't figure out what it is, there is no way they'll be able to sell major brands, all of which became major brands by virtue of expertise in identity. Take Nike. There is no confusion within Nike about what kind of shoe they make or who they are selling it to. They aren't pulling-an-eBay and waffling between being a cheap alternative shoe, a high-end performance shoe, a fashion shoe, or a casual shoe. They know what they are and will look for partners who fit their criteria. Nike could have four meetings with four different departments at eBay and get four (maybe five) different answers as to what eBay is.

Now, let's compare this to Amazon. On Amazon, there is ZERO TOLERANCE for fraud. Amazon also clearly has a concept of its role in the market. If I were a Nike executive, I would jump at the chance of an official association with Amazon's retail-paying customer base and run like heck from the bargain-shopping feedback-extorting diminishing-by-the-day buyers at eBay.
Major brands opening up official stores on eBay? Good luck with that!!!

What's Taking eBay So Long to Get Big Brands?   What's Taking eBay So Long to Get Big Brands?

by: former ebay seller

Thu Sep 16 23:26:34 2010

There are plenty of better opportunities for brand sellers to hock their wares than on ebay.

They can go to QVC or other online shopping stations, they can link up with other retail stores that have a proven track record.

Any major brand that buys into ebay's hype that this is a good deal is simply not doing their homework.

Association with ebay will only cheapen their brand.
Ebay should have stuck with what made them ebay. Hard to find items that are not massed produced.
But they got bored with us and kicked us antique and vintage sellers to the curb.

Thank goodness for Etsy.

What's Taking eBay So Long to Get Big Brands?   What's Taking eBay So Long to Get Big Brands?

by: Smitty This user has validated their user name.

Thu Sep 16 23:36:52 2010

To all you naysayers, I feel compelled to remind you that they were able to get GM.

Smitty

What's Taking eBay So Long to Get Big Brands?   What's Taking eBay So Long to Get Big Brands?

by: gonefromebay

Thu Sep 16 23:45:33 2010

The above posters have pegged the reasons very well.

What boggles my brain is why JD comes on board with an attitude about not liking flea markets and being disgusted with the 'noise', meaning the sellers who butter his bread, and thinks any reputable brand name would want anything to do with a site that the CEO thinks is a flea market.  Weird logic.  If I ran a company with a reputable brand name, why on god's green earth would I want to sell on ebay?

What's Taking eBay So Long to Get Big Brands?   What's Taking eBay So Long to Get Big Brands?

by: snickers

Thu Sep 16 23:48:00 2010

gee I wish they could put CHINA in bold next to their listings so it would be easier to scroll through. That is if I ever come back to buy on ebay again.

What's Taking eBay So Long to Get Big Brands?   What's Taking eBay So Long to Get Big Brands?

by: Even Brand Aid won't fix eBay

Fri Sep 17 00:07:54 2010

What respected quality brand would want to have their name even mentioned in the same breath as eBay? I don't even want to let anyone know that I even sell on eBay. It's humiliating. Years ago I told everyone about eBay to the point of ad nauseum. Now I avoid even saying that four letter word.

Ebay has lost its draw since taking the fun out of it. I remember Griff was asked about the fun, or lack of, on eBay and he couldn't even relate. He stated something about buyers shopping for good deals and sellers making money. He missed completely what most of us knew and what brought us to eBay sometimes, a lot of times daily. Ebay will ALWAYS be associated with auctions and without advertising and bringing the FUN back, eBay will become dead in the water. Not even their crappy daily deals will bring back the masses.  

What's Taking eBay So Long to Get Big Brands?   What's Taking eBay So Long to Get Big Brands?

by: Patricia This user has validated their user name.

Fri Sep 17 01:15:45 2010

Ebay has lost the very thing they insist their sellers have - a fine reputation!  They insist their sellers ''walk on water'' while they have wronged sellers right and left - burning bridges behind them and now wonder why traffic is down and sales are down.   The big brands look down their noses at Ebay and the ones who do try the Ebay platform are basically looking to pick up Ebay's buyers - and direct them to their own sites!  In the end, Ebay will die a slow slow death because the business model they are chosing is one destined for failure and the more sellers/buyers leave the larger the base of former users who hate Ebay and who spread the word about Ebay.

About the only way Ebay could have pulled off this turnaround was to close their doors, change their name and reopen without sellers and with an Amazon business model - and - go thru the years of being in the red that Amazon did before they rose to the top....only Ebay was far far too greedy for that.

What's Taking eBay So Long to Get Big Brands?   What's Taking eBay So Long to Get Big Brands?

by: Lars

Fri Sep 17 02:40:22 2010

The companies that will do well going forward are the ones that are innovative and cater to their niche. Take Apple and Amazon. They are both innovative and their brand is amazing. Their CEOs are visionaries to a degree and know how to lead in their industries. Ebay is trailing and trying to grab the same market share as many other venues only. It's too saturated and it won't work. Ebay needs to get back to its small business owner roots and scrap the whole diamond program. The program is a hard sell to any reputable brand out there who does not want to diminish their brand.

Small sellers made Ebay and we are NOT noise! We are your success Ebay. Time to listen for once!

What's Taking eBay So Long to Get Big Brands?   What's Taking eBay So Long to Get Big Brands?

by: ebay nonsense

Fri Sep 17 04:26:07 2010

Their biggest mistake was crossing the line from just a "venue" to micro-managing every aspect. Had they stayed focused on being an fair and stable advertising platform, treating everyone equally and being diligent about keeping the fraud off they would have remained a site that was social, trusted and profitable for everyone.

Once they started biting the hand that fed them (the sellers), adding policy after policy, taking more and more of the sellers already thinning profit margins they started their own slow demise.

I'm not surprised that Brand names are shying away from ebay. They're a has-been.

What's Taking eBay So Long to Get Big Brands?   What's Taking eBay So Long to Get Big Brands?

by: JB

Fri Sep 17 07:47:29 2010

Moot issue. We all know where it will go. However if they want to sink or swim based on their record. Ina, How about posting the list of large retailers who have come on board in the last year, along with their user ids.

What's Taking eBay So Long to Get Big Brands?   What's Taking eBay So Long to Get Big Brands?

by: look around

Fri Sep 17 07:51:53 2010

@ Smitty

Ebay getting Government Motors is no prize. The are both the same sleazy companies that would screw anybody that got in their way.

Arrogance, greed, self centerness run rampant in both companies. They deserve each other and in the end the will both be bankrupt for a final death knoll.

What's Taking eBay So Long to Get Big Brands?   What's Taking eBay So Long to Get Big Brands?

by: Ebay No More This user has validated their user name.

Fri Sep 17 08:09:26 2010

The points made by others are the exact reasons why the current Ebay strategy isn't working out well for Ebay.

@Smitty the GM/Ebay partnership crashed and burned long ago. It was a disaster from day one. Although the breakup wasn't as highly publicized as the partnership.

Ebay's Fashion Vault landed with a thud. My one purchase took three weeks to arrive. (I guess dropshipping is a low priority for a manufacturer). The current Ebay emphasis with partnering with a limited number of large sellers annoys me. So I don't even go to Ebay now. My disgust with corporate Ebay overcomes any need to shop. I divert to Amazon allowing Prime to deliver in two days and satisfy all my shopping cravings.

What's Taking eBay So Long to Get Big Brands?   What's Taking eBay So Long to Get Big Brands?

by: Rick1313

Fri Sep 17 10:23:29 2010

To Ron's post...

Actually, using Disney as your example was a bad choice.

This is one company that did come back in the fall of 2009, after stopping eBay activity (in 2005, I believe).

I confronted eBay,inc. with the fact that Disney was granted immediate Power Seller/TRS status, back in the fall of 2009 (when a user could have an email exchange with eBay. Alas, no longer.), in conjunstion with one of my disputes on how eBay,inc. was applying the (then) just started TRS program and their management of my account.

In my dispute (qualifications for PS status, being part of it), eBay kept on saying the old system (3 straight months @ $1000) was in place to qualify for PS.

When I gave Disney as an example of a user who does not, also, meet the qualifications (selling for only the last month or so),
eBay's response was that Disney has been a user/seller on their system since 2000. Implying, of course, that Disney has been selling non-stop from 2000.

When I pointed out Disney's account inactivity from 2005 to last year, and the fact that they did not (yet) meet the criteria to become a Power Seller (3 consecutive months of $1000 sales), let alone a TR seller, eBay's return reply was..........

nothing.

As I have stated before, the main reason why eBay,inc. is (since early June of this year) desparately trying to avoid email correspondances (especially with sellers) is because of exchanges such as I have listed above (and I have a lot more).

These type of responses can come back and haunt one, if matters end up in a court of law (which is the case for my situation).

Now on to Mr. Griffith, as he has been mentioned in this thread...

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