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Mon Nov 27 2017 22:15:48

Has eBay Reached Its Level of Incompetence?

By: Bob

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Has eBay reached its Level of Incompetence? Online seller and AuctionBytes blogger Bob examines how a new policy and its detrimental effect on sellers is evidence of the Peter Principle at work.

In 1969 Dr. Laurence J. Peter wrote a wonderful book titled, The Peter Principle: Why Things Always Go Wrong. This is classic study of corporate bureaucracy which he dubbed "Hierarchiology" (that word, alone, makes this book a must read!).

There were several important tendencies that this book exposed. Spoiler Alert! A main one was that in a corporate atmosphere, people tended to rise to their "Level of Incompetence." This means that as someone does good work in one position they are promoted until they attain a position they are no longer qualified for. This is their Level of Incompetence, where they will usually remain.

Another important aspect that Dr. Peter explained was what happens when a person, or even a company (Cough... Cough... eBay! Ahem...) reaches their Level of Incompetence. At this point they are no longer able to effectively deal with advancing the corporation's best interest in the outside consumer world. Instead, they become focused inward. The problems are no longer competitors or the mysterious, invisible hand of the marketplace. No, the problems become one's co-workers. Or that other department not pulling its weight. Or that cheap coffee the company supplies. 

Damnit! Give me a decent cup of joe and we'll create a monopoly!

I am not sure when eBay reached its own Level of Incompetence. But it has surely reached it. And it's grown downright comfortable in that spot. The proof is easy to find for, according to eBay, its problems are not caused by its own outdated programming, the revolving door too many competent employees march out through and, certainly, it couldn't be the big honchos with alphabet soup titles. Oh no! 

The problem is its sellers.

eBay is increasingly targeting its sellers, assuming that every one of them is a dishonest malcontent trying to steal from them. Recently, eBay announced that if they (or, better, their incompetent bots) were to suspect someone of selling items found on eBay, off eBay, they would charge fees anyway... even if the items don't actually sell!

From the user agreement: "If you are a seller, you are liable for transaction fees arising out of all sales made using some or all eBay Services, even if sales terms are finalized or payment is made outside of eBay... you may be liable to pay a final value fee applicable to that item, even if the item doesn't sell..." 

One seller was recently exposed to this when they attempted to write a buyer asking them to contact this seller if there were any problems with the sale. The seller was informed in BIG RED LETTERS that "Offers to buy or sell outside of eBay are not allowed. Please edit your message before you send it."

The seller had to reword the same, innocent message until the bots found it acceptable.

This isn't only insulting to sellers, it is a really bad strategy. I guarantee that the money eBay is putting into finding a handful of lost fees are costing more in employee time, subcontractor costs and in disgusted sellers leaving than anywhere near what it will save them.

But that kind of math doesn't matter when managers, companies, or even politicians, have reached their Level of Incompetence. 

About the Columnist
Bob has been buying and selling online for almost 20 years. Some experts claim that his limited budget was the major cause of the 2001 dot-com crash. He denies the charge.




Comments (31) | Permalink

Readers Comments

Has eBay Reached Its Level of Incompetence?   Has eBay Reached Its Level of Incompetence?

by: ignatz This user has validated their user name.

Tue Nov 28 07:22:43 2017

I think it might have been when Donahoe wanted to use the under-utilized capacity of "empty newspaper delivery trucks" to deliver stuff to buyers really, really fast.

That struck me as deeply ironic in an era when newspapers are rapidly disappearing - due to the very technology that eBay purports to be a master of.

Has eBay Reached Its Level of Incompetence?   Has eBay Reached Its Level of Incompetence?

This user has validated their user name. by: RKTOYS

Tue Nov 28 10:25:30 2017

eBay has the same problem that organizations everywhere have when it comes to computers.  They put people who don't know anything in decision-making roles and let them spend somebody else's money.  Designing computer systems is not really that difficult.  Alot of the people doing it are just stupid or crooked.  But management that doesn't know anything doesn't know that either.  What they do know is when somebody who knows better pushes back and they don't like being told no.  So they'll pay a fortune to somebody who sells them a square wheel or lead balloon while nodding yes all the way to the bank.

Has eBay Reached Its Level of Incompetence?   Has eBay Reached Its Level of Incompetence?

by: ebayout This user has validated their user name.

Tue Nov 28 11:17:45 2017

ebay has become a blind man feeling for a step that isn't there.
Maybe they should hire a physicist as the next CEO...you know...someone who understands that for every action, there is an equal and opposite reaction.
If you treat sellers like dirt, the reaction will be retaliation, which in ebay world will be sellers leaving...AND no longer buying...or, curtailing sales.
Not to mention the loss of potential new sellers who have heard from veterans what a cesspool ebay has become.
Retaliation will then have it's own reaction...lower stock price due to lower revenue. Wenig couldn't care less...he has 496,000 shares.
ebay is trying to gimmick it's way to prosperity. It's like feeding chickens a different diet every week and hoping they'll lay more eggs.

Has eBay Reached Its Level of Incompetence?   Has eBay Reached Its Level of Incompetence?

by: moto-science This user has validated their user name.
Web Site

Tue Nov 28 11:50:11 2017

Ebay consistently paranoid about sellers for years, instead of focusing on making selling easier, they are now trying to assert selling fees on communications. If the site was less hostile to this 18+ years e-commerce seller, we would never have opened up a standalone web store or Amazon seller account. The bad experiences from Ebay and Paypal in 18 years, will not be soon forgotten. Managers at Ebay has never sold anything online before they were promoted to the head of the department. The constantly underestimate the intelligence of small sellers.

Has eBay Reached Its Level of Incompetence?   Has eBay Reached Its Level of Incompetence?

This user has validated their user name. by: BuildingMyOwnSite

Tue Nov 28 12:41:29 2017

Bob said: “eBay announced they would charge fees anyway..... even if the items don't actually sell!”
 —  One of the Truly Monumental, Unique and Incredibly Stupid policies of ALL TIME, for a  company to institute, regarding it's very CUSTOMERS.

Bob said:  “..... what happens when a person, or even a company reaches their Level of Incompetence..... they become focused inward. The problems are no longer competitors or the..... marketplace. No, the problems become .....''
  —  Insert the words “The SELLERS THEMSELVES” here.  After all, who else could POSSIBLY be at fault ???

Me Says: “In order for the “Peter Principle” to produce a true “Company Wide Rise  To Incompetence'',  management must have reached incompetence FIRST.  Else they would have recognized the problem, and taken measures to correct it.”  Even NEW management, can correct incompetence below them......  (Unless they are also..... ''Already Incompetent'').  

All this is painfully, and publicly apparent at Etsy also.  Seller interaction with “Mods” provides REPEATED proof of  total incompetence, and complete disregard for their own TOS.
 —  IMHO, there is no excuse for what has happened at Ebay and Etsy, other than CORPORATE MALFEASANCE.
 —  IMHO, neither of these companies will be able to save itself.  There is no solution in either case, other than SHAREHOLDERS somehow removing both Management AND the Board Of Directors.  

Yeah..... GLWT !!!

Has eBay Reached Its Level of Incompetence?   Has eBay Reached Its Level of Incompetence?

by: RL15 This user has validated their user name.

Tue Nov 28 14:05:26 2017


fleecebay = a toxic cesspool

Has eBay Reached Its Level of Incompetence?   Has eBay Reached Its Level of Incompetence?

by: pace306 This user has validated their user name.

Tue Nov 28 15:21:13 2017

eBays issue is that it simply has NO DIRECTION.

Hiring people (mostly lawyers) to run an ecommerce company who know nothing about how ecommerce works - will never ever produce REAL growth.

Sellers are eBays BIGGEST asset, yet they get treated like garbage - time after time after time.

Amazon is by NO MEANS an angel - not in ANY manner, but at least they learn and adapt. The move quickly for a company of their size and understand - that this IS A BOX MOVING BUSINESS.

You dont have to "fill your cart with BS ... I mean color", you just have to seize opportunities when they arise.

As an example, Amazon has lately been on a tare gating brands - due to pressure from manufacturers. That means that there are sellers of those items looking for a place to sell - and that SHOULD be eBay. eBay has the ability to compete with Amazon using Amazons OWN SELLERS. But eBay refuses.

Just put together management teams and work with those sellers and help them "get back on to eBay".  Offer to work with them if there are VERO issues, work with them if there are issues with authenticity ... just work with them. Why is it so hard?

There are plenty of categories that this would work for - its so simple, and isnt it better then harassing your sellers for nothing?

Its sad that a once vibrant marketplace has let itself slide to where it is today.

Theres still lots of time to save eBay from itself - but the true test will be Q4 numbers ...... which if the magazines are right - will be abysmal for eBay (as compared to other online retailers)

Has eBay Reached Its Level of Incompetence?   Has eBay Reached Its Level of Incompetence?

by: ebayout This user has validated their user name.

Tue Nov 28 15:55:23 2017

heh...heh...heh...maybe Wenig thinks AI can print money

https://seekingalpha.com/article/4128202-fooled-ebays-low
-pe?auth_param=1ehh26:1d1ribt:38c300b546437839efdb87773d961a46&uprof=46&dr=1

Has eBay Reached Its Level of Incompetence?   Has eBay Reached Its Level of Incompetence?

This user has validated their user name. by: eXtinctBay

Tue Nov 28 17:00:54 2017

Level Of Incompetence?

They reached it in 2008 with Donahoe.

It has been exceeded since.

In the eCommerce arena, there has been incredibly MASSIVE, if not EXPONENTIAL growth in the last three to five years.

Amazon was poised and positioned to take advantage of this, and invests a great deal of money to continue growing in the future.

The eBay brass thinks they can run a top-level organization on Bain principles and a shoestring budget. With the traffic they have (or had) in place, the profitability should be tremendous. The downfall of brick-and-mortar stores has opened the door very wide for any online business.

Sadly, eBay has not taken full advantage of this. This is a golden goose that has been allowed to die due to poor reinvestment in the company and incompetent management.

When their stock price is $35 (and falling), and Amazon is at nearly $1200, something is definitely wrong. One would think a share of eBay stock should be at worth least 10% of Amazon's share price.  

Has eBay Reached Its Level of Incompetence?   Has eBay Reached Its Level of Incompetence?

by: ebayout This user has validated their user name.

Tue Nov 28 17:13:06 2017

ebay is a pixelated Enron...
It owns NOTHING...sells NOTHING...delivers NOTHING.
It's held together with fairy dust and happy thoughts.
Stock is down 9% over the past 7 weeks, and hasn't finished over $36 in the past 2 weeks...down 1.36% today.
Don't wait for 4th qtr results...Sell, Bubba, Sell.

Has eBay Reached Its Level of Incompetence?   Has eBay Reached Its Level of Incompetence?

This user has validated their user name. by: toolguy

Tue Nov 28 20:08:43 2017

@eXtinctBay

Since you know stocks!

What would eBay's stock price be if they had a P/E like Amazon's?

What would Amazon's stock price be if they had a P/E like eBay's?

I think everyone would be surprised!

Amazon is a lot like Bitcoin. . . .Overpriced HYPE!

Has eBay Reached Its Level of Incompetence?   Has eBay Reached Its Level of Incompetence?

This user has validated their user name. by: toolguy

Tue Nov 28 20:12:27 2017

One more comment about eBay & Amazon!

eBay makes over 3x the profit Amazon does!

Amazon $2 Billion

eBay $7 Billion

Has eBay Reached Its Level of Incompetence?   Has eBay Reached Its Level of Incompetence?

This user has validated their user name. by: Bill

Wed Nov 29 00:17:59 2017

Tool,

P/E of eBay is 5.4 and the P/E of Amazon is 302.4.
eBay trades around 7 times the P/E while Amazon trades at around 4 times the P/E.
This is as of today according to Nasdaq.

Has eBay Reached Its Level of Incompetence?   Has eBay Reached Its Level of Incompetence?

This user has validated their user name. by: Bill

Wed Nov 29 00:57:43 2017

Motley Fool also has a bad review of eBay in the following thread they published today:

https://seekingalpha.com/article/4128202-fooled-ebays-lo
w-pe?auth_param=1ehclq:1d1ribt:380943800cde53cc88ea5711cdb5d62b&uprof=46&dr=1

Has eBay Reached Its Level of Incompetence?   Has eBay Reached Its Level of Incompetence?

This user has validated their user name. by: toolguy

Wed Nov 29 09:54:27 2017

Bill, you do know that a high P/E is bad!

The lower the P/E the better!

It's called Price to Earnings.

If eBay had a ridiculous P/E of 300 it's stock price would be over $2000

If Amazon had a respectable P/E of 5 it would be trading for $21. . .

Has eBay Reached Its Level of Incompetence?   Has eBay Reached Its Level of Incompetence?

This user has validated their user name. by: toolguy

Wed Nov 29 10:01:08 2017

Bill. here's a link to understanding P/E ratios

https://www.investopedia.com/university/peratio/


I
was a heavy day trader from 1998 to 2004

Bought and sold no less then 500 securities in those years, made a fortune and lost 2 fortunes in the process. . .I know Wall Street

Has eBay Reached Its Level of Incompetence?   Has eBay Reached Its Level of Incompetence?

by: I Must be Crazy This user has validated their user name.

Wed Nov 29 13:50:06 2017

@tool

Then you know that p/e ratios are not really that relevant for a lot of traders. Trading now is more like gambling than any measured strategy rooted in performance. Day to day information and small movements up and down are what traders are looking to exploit these days. Most values are based on the anticipation of how a company will do. Amazon is expected to continue to do very well. Their future looks bright with lots of room to move up. Ebay not so much. Ebay stock is likely trading high and probably should not be worth much more than the total value of it's assets.

If you read the article you will know that eBay has been using gimmicks such as stock repurchases and fee increases to mask problems in their operations and flat GMV. Prior to the Paypal split, they were able to use Paypal's income to paper over their shortcomings. That is no longer the case. Ebay does generate a tremendous amount of cash. Yet rather than invest it into improving the business, they choose to spend it on stock repurchases, big salaries, and bonuses for their executives. Those stock repurchases make the stock awards and options the guys at the top collect more valuable.

You see who Devin and his gang are REALLY working for?

Has eBay Reached Its Level of Incompetence?   Has eBay Reached Its Level of Incompetence?

by: ebayout This user has validated their user name.

Wed Nov 29 19:11:02 2017

The times might be a'changing...stock took a good hit today, and the after hours looks bad for tomorrow.
Big sell-off today...lots of investors smelled the coffee.
Wenig will be home late tonite...PaPa John's wins again.

Has eBay Reached Its Level of Incompetence?   Has eBay Reached Its Level of Incompetence?

This user has validated their user name. by: Bill

Thu Nov 30 00:52:26 2017

Tool,

I have been trading stocks and options for over 40 years.   When you have a low P/E that means that something is rotten and you should stay away. The P/E has nothing at all to do with the price of what a stock is trading for. A stocks true value is based on the ROI. To me and anyone else who trades a low P/E means there is no potential for growth
If I was a gambler i would be buying puts on eBay at this point in time since the P/E says that there is no growth in the future. Ebay's buy back of shares is the only thing that is keeping the stock at the level it is at. They are using profits to buy back stock so they can keep selling the shares they own for a reasonable profit. That is what Enron was doing and that soon became a house of cards.

Has eBay Reached Its Level of Incompetence?   Has eBay Reached Its Level of Incompetence?

by: Scott98 This user has validated their user name.

Thu Nov 30 01:18:33 2017

One seller was recently exposed to this when they attempted to write a buyer asking them to contact this seller if there were any problems with the sale. The seller was informed in BIG RED LETTERS that "Offers to buy or sell outside of eBay are not allowed."

----------

Had this same bogus accusation happen to me yesterday. I did nothing but email a a freight shipping quote - didn't sell or offer to sell outside of eBay like they accuse. Although they didn't give a warning. They just suspended me from listing for a few days.

I am ready to fight back by listing elsewhere - will start with Craigslist and Etsy while also creating my own website.

Will also go back to old school methods like newspaper classified ads and flyers like I used to do in the 90s and early 2000s.

eBay is so stupid. Punish sellers for giving information. But let all buyers off the hook that cancel sales after purchasing.

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