|Sun Oct 23 2011 18:11:08|
Is eBay Giving Away the Store to Big Brands?
By: Ina Steiner
eBay CEO John Donahoe told Wall Street analysts on Thursday the company was working with brands such as Neiman Marcus Last Call and was still learning "how to really drive powerful incremental volume for them." He mentioned a special promotion with luxury brand Coach - "we were able to drive through a combination of, in essence, a flash sale and some other things, some nice incremental volume."
But "regular" sellers on eBay don't like the favored treatment, including a homepage link to Brands.eBay.com, and are skeptical that the big brands will be able to offer a good customer experience on eBay, since they say buyers there are more demanding than on other sites. Sellers worry about the effect of special treatment eBay gives brands on their own sales, and are also concerned that the brands are simply using their presence on eBay to drive traffic to their own websites.
Neiman Marcus Last Call, for example, with whom eBay is working, collects email addresses from visitors (not buyers) to their listings. The practice would appear to violate eBay policy. I signed up for the newsletter on Neiman Marcus' page on eBay and received my confirmation email from LastCall@lastcallemail.com, which is registered to The Neiman Marcus Group, Inc.
And despite the fact that eBay is working with the brand - last week John told Wall Street analysts, "we're making working with the Neiman team to really optimize how we take advantage of the 100 million active eBay consumers to drive incremental volume" - the company is racking up poor grades from eBay shoppers.
Neiman Marcus Last Call began selling on eBay in August, and despite a large number of negative feedback ratings, was a Top Rated Seller until several days ago. I took the screenshot below on Tuesday, which shows the TRS badge alongside 38 neutral and 46 negative feedback ratings over the prior 30-day period. This did not go unnoticed by other sellers in the clothing category who pointed it out to me.
Wrote one seller, "This is UNDENIABLE PROOF that Ebay is putting their big box stores on AUTOMATIC DSR OVERIDE. There is NO WAY with all those negatives and neutrals that they have not been sheltered and that the rules are DIFFERENT FOR BIG BOX SELLERS on Ebay."
One could also ask why brands want to risk their reputation on eBay? Neiman Marcus built its business through its reputation. Having negative reviews on eBay must be of concern to the retailer.
In addition, companies risk associating their brands with items that might not fit their image. In browsing the Jockey listings on eBay, I noticed some listings for dominatrix-style items showing up at the bottom of a listing under "See what other people are watching."
Shoppers might believe the listings are offered by Jockey, but they were listed by other sellers. This lack of control over how their brands are presented may be off-putting for big-name merchants and retailers.
Courting big brands on eBay is risky for both sides, but there are currently no signs of eBay slowing down. Mercent, which uses eBay's large-merchant on ramp to upload catalogs of major brands to eBay's marketplace, said it lists 1 million SKUs per hour onto the eBay marketplace for its high-volume merchants.
And for sellers who don't make it to eBay's Top Rated Seller status, the news is grim: 45% of the value of goods sold on eBay in the U.S. are sold by Top Rated Sellers, thanks to the extra exposure their listings get in eBay's Best Match search results.