|Tue Mar 12 2013 20:45:50|
Should eBay Share Data with Your Competitors?
By: Ina Steiner
eBay announced on Facebook it will begin sharing data with off-eBay merchants. "Magento is working with retailers in a pilot project that analyzes eBay and PayPal consumer transaction data to provide Magento merchants with recommendations on what new products or shopping features to offer, and more," according to the announcement on Facebook. eBay acquired Magento, which offers an ecommerce platform for online merchants, in 2011.
But how much and what kind of data would eBay provide Magento merchants, and would eBay also be sharing data from GSI Commerce transactions? What kinds of recommendations would the program be able to make and how would understanding historic data help shape such recommendations?
Mariel Firmacion, a spokesperson for X.commerce, said, "We look forward to leveraging data, and other eBay Inc. assets, with our merchants in the near-term future," but she did not provide further details saying the pilot program and capabilities were still under development.
Historically eBay has shared very little data with merchants. In 2004, it opened eBay Pulse, which allowed visitors to view popular searches and Stores on eBay, and periodically eBay releases Hot Categories reports. You can view "popular products" on this page. But these features offer data that is/was very broad and marginally useful.
In 2008, eBay launched eBay In Demand, a tool for top sellers that was supposed to provide information about specific inventory that was in high demand and low supply on the marketplace. However, eBay In Demand got poor reviews and faded away.
Opening up eBay and PayPal transaction data sounds potentially very useful (for those who are allowed access), but there are some caveats under even the best circumstances. Much of eBay's data remains unstructured. Limiting reports to structured data would give only a partial picture of supply and demand for products on eBay. But including unstructured data could provide misleading information - an average price for a product could be understated if it included selling prices of used items or those in poor condition.
If you're one of the Magento merchants privy to this data as part of the pilot program, make sure you understand exactly how the data was derived. Online merchants with cash-flow issues and slim margins don't want to make sourcing and pricing decisions based on data about which their assumptions are wrong.
eBay's announcement wasn't clear about whether PayPal data would include off-eBay transactions - from sellers' sales on other marketplaces (such as Etsy) and from merchants' own websites, for example. Trying to lump this data together to come up with recommendations for merchants on yet another platform could also prove perilous.
On a marketplace like eBay, if more than a very few merchants are getting the same product recommendations, demand could quickly outpace supply. Whether that is true for Magento merchants is hard to say and would depend on a number of factors.
Finally, one thing struck me about the announcement. Online merchants are quite vocal in their concern about Amazon using their transaction data to turn around and compete with them. eBay tells retailers that since it is not a retailer itself, they don't have to worry about that problem. Even if eBay's program doesn't provide granular information to Magento merchants, isn't providing them with "eBay and PayPal consumer transaction data" the very thing that sellers object to about selling on Amazon?
What kind of benefits and pitfalls do you envision with such a program? And what do you think of eBay sharing this data with Magento merchants? Is this data you'd like to access?