Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Thu Mar 7 2013 22:08:26

What Does Neiman Marcus Departure Mean for eBay?

By: Ina Steiner

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Neiman Marcus had a rocky start when it launched the Last Call By Neiman Marcus fashion outlet store on eBay in 2011 along with 19 branded outlet stores. Like others before it, the company learned it takes a lot of work to sell on the eBay channel. In January, Neiman Marcus departed from eBay permanently.

As reported in Friday's Newsflash newsletter, Neiman Marcus told us it had learned a great deal from its partnership with eBay, "but it did not meet all our expectations."

What do brands want when it came to the eBay channel? Donahoe promised incremental sales - access to its millions of shoppers. eBay built a special on-ramp for brands to dump their catalogs on its marketplace and offered special pricing deals. eBay acquired top brands through its acquisition of GSI Commerce and began offering golden promotional opportunities to those manufacturers and retailers. (I wrote about the exposure eBay gives Sony in September, as an example; and promoting brands on eBay's social networking accounts is typical behavior.)

When we warned readers about eBay's stealth plans for Operation Catalog in 2008 (which eBay initially denied), sellers were skeptical about the likelihood of their success. And many believed brands simply wanted to use eBay as a customer acquisition tool, using eBay to drive visitors to their own websites.

As we observed 2 years ago, when Last Call By Neiman Marcus opened its eBay store, it began collecting email addresses from visitors, which was against eBay's policy (at least for regular sellers).

eBay launched with 20 fashion outlet stores in 2011 as part of its focus on creating tailored vertical shopping experiences in key categories. How many are there today? There are currently 25 fashion outlets listed in the eBay directory.

A lot has changed over the past 5 years, and the departure of Neiman Marcus from eBay is a good time to reflect on whether eBay is succeeding with its shift to favor large brands, and whether that strategy has made eBay a stronger, healthier marketplace.

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Readers Comments

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This user has validated their user name. by: iheartjacksparrow

Fri Mar 8 12:46:45 2013

Ric states what I was thinking. For the most part, people seem to search on eBay for the cheapest prices possible on particular items. I don't shop at NM's B&M stores; their prices are way too expensive for my budget. In looking at their feedback, even their "off-price" brands are more than I can afford. So while NM may have been using their store for exposure (I didn't even know they had a presence on eBay until reading this article), or grabbing e-mail addresses, I think the bottom line is they expected more sales for the items they were offering. A purse selling for over $250 is not something I can see huge numbers of eBay buyers going for.

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by: Massachusets Howler This user has validated their user name.

Fri Mar 8 13:17:58 2013

Victory!
Mass Howler
1 down and SO MANY MORE to go!!!
Victory- in MY category.
Big Box Bites the DUST!
Even the ILLUSTRIOUS NEIMAN MARCUS could not EQUAL our (all of us) Customer Service!
Ah Ha!
Mass Howler

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This user has validated their user name. by: Rexford

Fri Mar 8 15:22:16 2013

Annie says: I get a great deal of satisfaction in seeing the JD House-of-Cards begin to collapse.

That makes two of us Annie.  The chickens are coming home to roost, and this is the first chicken.

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by: Massachusets Howler This user has validated their user name.

Fri Mar 8 16:40:20 2013

That makes 3 of us.
And Ming Jack and Phil too!
This is a BIG HIT for JD.
Call Neimans and tell them that because they are OFF ebay you will be shopping with them again.
Keep COMPLAINING at Home Depot- you guys take the THIEVING paypal-I am GOING TO LOWES!
I am not RESTING on this but PROCEEDING.
MH
(Keep writing to the FTC and your REGULATORS)! Make your opinions KNOWN.

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This user has validated their user name. by: Philip Cohen
Web Site

Fri Mar 8 16:46:23 2013

@pace306,

Yeah. “fulfilment by eBafia” … I’ve had several items that I’ve purchased on eBay, fulfilled by Amazon … Ho, ho, ho …

@ iheartjacksparrow,

A purse for “over $250”? You should take a look at eDropOff’s auctions! Still, how many of her high-priced “bags” this seller is bidding on and herself buying, is always the question …


Regardless, the most significant result for eBafia in 2013 will be the likely be the collapse of the PreyPal “house of cards”, outside of its effectively mandated place on the eBay marketplace, by the new “professional” digital wallets from Visa and MasterCard …

“How Visa And MasterCard Benefit From Square”

http://seekingalpha.com/article/1257481-how-visa-and-mastercard-be
nefit-from-square?source=google_news


This is an excellent, professional analysis of the strengths of the positions of Visa and MasterCard in the evolving payments market. Funny, but the clunky, parasitic PreyPal does not even rate a mention …

eBay / PayPal / Donahoe: Dead Men Walking ... http://bit.ly/11F2eas

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by: Bloggo This user has validated their user name.

Fri Mar 8 18:14:07 2013

In a related development, the Paypal logo is now prominently displayed in several late-night Infomercials.

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by: summer in the city This user has validated their user name.

Fri Mar 8 18:15:05 2013

Had to drop in to rejoin the chorus on this one. I was one of the thousands of small sellers with perfect feedback, and many repeat buyers, that the Ho fired circa 2008. I know I was supposed to crawl away and die, but instead I’m now prospering on other sites such as Etsy.  

(Recently another seller in the Etsy forums pointed out that “Etsy never would have grown at the rate that it did if it hadn't been for sellers bailing from Ebay.”  I wonder if Etsy realizes this?)

This Neiman’s thing was of course all too predictable, but don’t look for the Ho to drop off his perch anytime soon – at least not voluntarily. It just doesn’t fit in with the worldview of a malignant narcissist. Every time one of his schemes crashes and burns, we all expect the logical thing to happen – that his game plan will change – but it never does.  That would necessitate the Ho acknowledging that he was wrong about something, which IIRC has never happened either.

So what *would* happen if we all woke up tomorrow morning to a completely new management team and insanity rollback at Ebay?  Would Ebay reacquire the sellers it discarded?  Would Ebay regain its former glory? There will be some naysayers here, but I think the answer is yes, if Ebay does it right.  But, that would involve doing it right…hmmmm.

One thing is for sure: Donahoe would have to be gone-ahoe for good.


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This user has validated their user name. by: Anonymous Annie

Fri Mar 8 18:16:06 2013

I recently flew on a Delta Airlines flight and eBay was featured prominently as part of their onboard WiFi service.

Frankly, I'd rather shop the SkyMall catalog instead of eBay.

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by: ebay refugee camp This user has validated their user name.

Fri Mar 8 20:01:08 2013

The 100% shoplifters and thieves get your free item here strikes again!!!

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by: TomH This user has validated their user name.

Fri Mar 8 20:18:29 2013

@ Ming
''and Griff as well.''

Actually, I think the first that needs to go is Pierre, followed by all of the BoD. They are the idiots who put MEG, JD and the others in place.

TomH

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

Fri Mar 8 21:20:18 2013

Pierre Omidyar isn't going anywhere. Even if ebafia collapsed tomorrow, he's made enough billions to live quite comfortably for the rest of his life while he arrogantly goes about using his American earned dollars to finance his international 'philanthropic' projects and hiding corporate profits tax free in the Cayman Islands.

Only the Board of Directors can fire The Ho. But for ebafia to have real long term viability, the entire corporate culture must change along with the leadership.

Ebafia has far too many overpaid, spoiled brat inexperienced managers on power trips who are building their resumes for their next Silicon Valley job by making ultimately destructive changes with short term gains but long term losses.

An entirely new business model must replace the existing one -- a business model built on the premise that when ebafia's customers (sellers) succeed, the corporation succeeds. The opposite pole tension between these objectives that is so pervasive now must change in order for ebafia and its 3P sellers to survive.

Replace all upper management, eliminate at least 50% of the current management structure, make employees communicate with each and be accountable, ELIMINATE STOCK OPTIONS, and develop a cohesive business plan that includes goals and objectives that all employees know about and understand.

Ebafia is simply one of the worst managed corporations in this country.

It's unrealistic to expect Omidyar to admit he made a fatal mistake is supporting The Ho's turnaround plan, and the illegal interlocking directorate masquerading as a Board of Directors will  more than slap The Ho's hands as they did once before when profits were "disappointing."

Conveniently and quite intentionally, ebafia has no traditional shareholders. Ebafia is a stock for day traders, Wall Street banksters who rely on illegal insider information to buy and sell, and those executives who regularly receive free stock options as part of their compensation.

Ebafia is therefore not managed for the long term investor; it's managed for the quarterly private enrichment of executives receiving stock options.

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This user has validated their user name. by: iheartjacksparrow

Fri Mar 8 22:35:59 2013

summer in the city asks: "So what *would* happen if we all woke up tomorrow morning to a completely new management team and insanity rollback at Ebay?  Would Ebay reacquire the sellers it discarded?"

For me personally, they would have to roll back every policy and fee to circa 2006 before I would consider returning. eBay would also need to implement serious protection for sellers from scamming and deadbeat bidders. I am thriving on eCrater without any listing or final value fees, and I'm not forced to accept PayPal. The only thing eBay could offer me would be greater visibility, assuming they eliminate rolling blackouts and give everyone equal standing in search results.

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by: Massachusets Howler This user has validated their user name.

Sat Mar 9 00:14:35 2013

Jack- TELL US about your switching over to ecrater from ebay- we sell the same stuff brother and I know and TRUST your opinion.
Tell us- is it good there, how many items your first week, what did you do, how quickly could you see it was gonna work?

Neimans woke up and checked their reputation- pure & simple- they heard the noise.

I can see it now.....
The Neiman Marcus CEO woke up last Thursday and said- OHMIGOD! What the hellarewedoin??! We have set up out illustriously poofy and fancy store inside of a cheap Chinese FLEA MARKET.
(That's what REALLY happened).

WE ALL SAID that Neimans could never stand up with these buyers, we knew this would happen.

Very good news, a toast to everybody and Jack tell us about ecrater.

MH  

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by: Bloggo This user has validated their user name.

Sat Mar 9 02:42:30 2013

"CNBC's Seema Mody reports the latest from the Nasdaq, saying eBay slipped 3 percent this week.
"

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This user has validated their user name. by: iheartjacksparrow

Sat Mar 9 11:15:38 2013

Mass Howler - Send me a private message to my linked e-mail address and I will tell you all about eCrater.

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This user has validated their user name. by: Anonymous Annie

Sat Mar 9 13:48:51 2013

What was NM's feedback like? How were their DSR's?

Could this have been something that influenced their decision to abandon eBay?

Even if eBay gave NM some sort of free-pass or automatic overrides on their FB/DSR scores, did NM decide that eBay's standards were too high and too extreme?

Was someone at NM embarrassed at having their FB/DSR scores publicly displayed?

Did that person have a conscience? And as a result, did they realize that the comparatively ''low'' FB scores made them look ''worse'' than the lowly small-seller (non-corporate seller) who WAS able to maintain 99% or better scores?

It's worth noting that if the big corporate sellers (such as Buy, ToysRus, and NM) are unable to meet the standards put forth in eBay's FB/DSR requirements... and considering that these corporate sellers are professionals... and considering that they have the staff and mechanisms already in place to provide good customer service... then perhaps it's time for eBay to REEVALUATE the standards that they hold small-sellers to.

Maybe eBay's FB/DSR standards are inherently unfair, too strict, and unattainable... even by the BEST of sellers. Maybe they're too costly and too unrealistic. Maybe the punishments that eBay doles out when a good seller fails to achieve those standards are too strict.

It's always been clear to me that eBay wants small-sellers to be able to perform at the same level of competence and efficiency that (we imagine) large retailers do.

So, if we now have evidence that even large retailers are unable to meet those standards, then it's obvious that the standards (and punishments) need to be reevaluated and adjusted to something that's more realistic.

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

Sat Mar 9 15:04:05 2013

Annie, you put forth a great argument.

I've always thought, however, that ebafias's principal goal with small sellers was to force certain behaviors then bait and switch for the purpose of eliminating seller discounts.

The Ho envisioned ebafia as some sort haute couture runway and electronics boutique where we small, trashy, noisy sellers simply no longer fit in with his high end 2008 vision.

Everything ebafia does is intended to either increase THEIR profits and/or raise the price of their stock. If ebafia does anything that increases our profitability, it's purely coincidental and probably accidental.

Sooner or later TRU will decide that selling on ebafia damages their brand and will leave the venue of high maintenance, criminal, whiny buyers.

Those of us wanting to return to pre 2008 policies and fees might want to think twice. Some of them were better, and many of them were not.

I, for one, much prefer a nickel BIN listing fee than $3-$8 listing fee.

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This user has validated their user name. by: iheartjacksparrow

Sat Mar 9 15:35:59 2013

@Annie - For the past 12 months, NM has 18,220 positives, 177 neutral, and 136 negative. Their DSRs are 5s in all categories. Since we know lots of people never bother to leave feedback, I don't think they'd be embarrassed by those numbers. The neutrals and negatives are mostly for items being sold out, the wrong size sent, and bad customer service, which could all be complaints seen on their dedicated web site.

For the last 12 months, Toys R Us has 113,241 positives, 1,312 neutral, and 1,651 negative, with DSRs of 5s in all categories (but less than 80,000 DSRs left).

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by: Bloggo This user has validated their user name.

Sat Mar 9 17:47:15 2013

Toys R Us has 113,241 positives, 1,312 neutral, and 1,651 negative.

DSRs of 5s in all categories. Given the number of Negatives and Neutrals, the DSR rating doesn't pass the Smell Test.

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This user has validated their user name. by: Philip Cohen
Web Site

Sat Mar 9 18:06:56 2013

@Annie,

“… then perhaps it's time for eBay to RE-EVALUATE the standards that they hold small sellers to.”

Can’t imagine where it came from but I somehow got the impression that the eBafia Don has made it clear that he is not interested in “small” sellers—period; only in national brand owners and/or their authorised distributors/franchisees … Scruffy “Op” shops and “mom and pop” stores are no longer welcome and need not apply for floor space in the Don’s new online “mall” …

eBay / PayPal / Donahoe: Dead Men Walking ... http://bit.ly/11F2eas

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