Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Mon May 27 2013 13:44:17

What Really Happened to the eBay Auction Format?

By: Ina Steiner

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Today's story about the decline of online auctions on eBay is on fire ("eBay Auctions Declined Due to Inconvenience"), so I'm opening it up for discussion. The article reviews new research that looks at eBay data from 2003 to 2009 and finds the decline in auction format listings not to come from the seller side, nor due to actions eBay took, but rather, due to shoppers' desire for "convenience" shopping.

My own opinion is that the ratio of auctions to fixed-price listings would have naturally declined without eBay interference, but never to the extent it has done. eBay was all about "the perfect store," a model of supply and demand - I remember former CEO Meg Whitman acknowledging that eBay did better when management didn't try to control that dynamic.

In fact, as eBay auctions declined, penny auction websites took off in popularity, and they have nothing to do with convenience shopping. Researchers also wrote they assumed mobile devices were a contributing factor to the auction decline.

What do you think about the decline of auctions on eBay - what was the cause, and was it inevitable?




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by: elancep This user has validated their user name.
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Mon May 27 14:21:52 2013

I think that the opinion in the article is spot on. The novelty of the auction format began to wear off. The format really doesn't make sense for run of the mill items. No one wants to wait a week to see if they'll save $0.50 on a DVD. Another problem that arose was sellers who would end auctions early if they saw that they weren't going to get their desired price.  

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This user has validated their user name. by: elpereles

Mon May 27 14:47:45 2013

''Another problem that arose was sellers who would end auctions early if they saw that they weren't going to get their desired price.''

Agree. And lets not forget the ''shill'' bidding.  

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This user has validated their user name. by: bitbybit

Mon May 27 15:07:44 2013

Anyone notice the drop in auctions started at the exact same year 2008 as JD took over as CEO? Coincidence? Of course not. Donahoe has done everything to manipulate and destroy auctions. I do agree for everyday items auctions are not the right format. The economy was hit hard in 2008 and auctions should have and would have been booming if not for JD's obsession with getting rid of auctions and putting stores in core. Didn't Best Match become the default in 2008? I'm not saying auctions would not have gradually slowed down but it would have been a natural slow down and not a planned execution.

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This user has validated their user name. by: Ric

Mon May 27 15:20:22 2013

Another contributing factor to the demise of eBay auctions is the eBay fee structure. eBay wanted to drive down the popularity of auctions and set listing fees accordingly.

When sellers could get 30 day durations at a fixed price for a listing price which is lower than listing in a 7 day auction format, sellers chose the lower cost - longer duration option.

In another sign eBay wanted to downplay the auction format, they failed to implement an automatic payment system for auctions. What eBay should have done was require bidders to authorize payments be deducted from their PayPal accounts automatically at the time they place their bid. With this feature in place, buyers would be freed from having to return to eBay when the auction ended to complete payment.

Immediate payment for auctions would have improved both the buyer and seller experience on eBay by eliminating the contentious issue of non paying bidders.

Buyers would know that if theirs was the winning bid when the auction closed, payment would be completed immediately after the auction ended and their item would ship sooner.

That eBay continues to ignore the benefit of immediate auction payments is a sign they simply have no interest in resurrecting the auction format even though eBay would benefit from higher Final Value fee revenue for those items that attract high bid volume.



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This user has validated their user name. by: bitbybit

Mon May 27 15:28:56 2013

''Another problem that arose was sellers who would end auctions early if they saw that they weren't going to get their desired price.''

IMO the manipulation of auctions by ebay contributed to sellers ending their auctions early. I have proof that ebay is showing certain auction items as ''No longer available'' even though the auctions are still running! No wonder sellers are not getting a good price on their items. Very alarming if you ask me.

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by: Patricia This user has validated their user name.

Mon May 27 16:08:47 2013

Whether the excuse is auctions or fixed price....its evident, at least in the Arts category, that the buyers are not there!  Yet...I'm doing well on another site that also runs auctions and fixed price and is exclusively artwork.

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by: Patricia This user has validated their user name.

Mon May 27 16:10:44 2013

What I can't understand is WHY Ebay is fooling around with any of its sellers or formats.  It all works out for revenue for Ebay...why pamper one segment and kick another segment around.  Tell me they don't want small sellers and I'll believe it until I get email after email from ebay enticing me to list with them!  Then I go back to thinking none of this makes sense!!!

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

Mon May 27 16:40:56 2013

Before I'd accept these study conclusions as valid, I would want to verify that no individual or group that had/has any affiliation with or funding from ebafia, any ebafia subsidiary, or any company or individual providing any type of service to ebafia has no involvement whatsoever.

In other words, I'd like to know if the results of this study are 100% unbiased and that completely independent researchers conducted it.

The fact that Stanford is in ebafia's back yard is troubling since most of us have learned over the years that ebafia culture revolves around Lies and Secrets.

Perhaps The Ho got exactly the study results he bought and paid for. Or not. We'll probably never know for sure.

RIC is quite correct in stating that ebafia uses their fee structure to involuntarily coerce sellers into certain behaviors that are financially beneficial for ebafia and to hell with helping sellers.

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This user has validated their user name. by: iheartjacksparrow

Mon May 27 17:57:01 2013

bitbybit says: "Anyone notice the drop in auctions started at the exact same year 2008 as JD took over as CEO?"

And I personally believe that the auction format started to die off when JD began his campaign of removing all small sellers with unique items. People were willing to bid high for items they were seeking for their collections. Chinese sellers don't have stuff people want to bid on. Since JD began removing the "noise" from his site, there weren't many left with items people wanted to bid on.

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This user has validated their user name. by: Marie

Mon May 27 20:26:43 2013


@patricia

The last round of fee changes Ebay just did really should have calmed down the rumors about Ebay and them not wanting small sellers around.  Those fee changes benefit the smaller sellers if they choose the right store level for them.

The casual seller got hurt by the fee changes and it was the larger sellers that got hit the hardest.

I know it has been a saying around for a very long time and I too have said it more times than I can count.  But to me, that last round of fee changes / increases is very telling.  I think Ebay may be starting to realize it is the small sellers that built Ebay and it is the small sellers that continue to be Ebay's main revenue stream due to the sheer volume of us.

I have no problem accepting that the public at large is less interested in auctions as they once were, but that is not to say that there is no longer a place for them.  There is still a large number of buyers that LOVE to shop auctions.  While possibly not as many as we had in the early 2000's, there are still a whole lot of them out there.

I believe it is Ebay's constant manipulation of the searches that is what is hurts my listing / sales.  For me it is not just my auctions that have low sales, it is the BIN or GTC listings as well.  Lower than I've ever seen for this time of year.

So while I don't have a problem believing that auctions are not as popular as they once where, I still think that Ebay is hurting us in those areas as well.

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by: Susan Averello This user has validated their user name.
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Mon May 27 20:33:22 2013

I agree with an earlier post - I don't want to wait a week to see if I won an auction. Annoying I have bid on 2 similar items and won both. If only I could just buy what I wanted right away.

If I want something, I just want to pay - not see if I win. It may work for rare items or collectibles, but not for most stuff. These days unless it's buy it now, I don't buy at all.

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by: sickandtired This user has validated their user name.

Mon May 27 20:53:06 2013

The majority of my success overall on ebay for 15 years was with the auction format.  This has sadly declined over the last 4 to 5 years and I firmly believe it has mostly to do with ebay manipulation in order to move to a fixed price format and get rid of small sellers.

I do not sell new items...my stuff is china, crystal, pottery, antiques and vintage stuff.  I perfectly understand why buyers lost interest in waiting for new, commodity type items to run the course of an auction......that stuff should be fixed price.

By burying auctions in search, moving stores to core and butchering search in multiple ways, not the least was eliminating Boolean searches ebay ebay created a self-fulfilling prophecy. Auctions declined.

As auction items got less attention and lower ending prices with fewer and fewer bidding wars, sellers  reacted by either not listing the really prime stuff or by placing reserves or starting at high prices. Both of those things really turned off a lot of buyers.

Pick a category where there used to be a great selection of collectable or antique items and you will see that is is a poor shadow of what was available a few years ago.......a vicious circle.....sellers held back the good stuff and serious collectors couldn't find what they wanted so stayed away and sales spiraled downward.

Prices for antiques and collectables have decreased in the B & M world too because of changing tastes and the economy over the last years, but my experience and that of many of my dealer friends is that the percentage down is much higher on ebay than in the "real world".

JD's mission to get rid of the "noise" and the opening of the floodgates to the dollar store  junk and Chinese knockoffs and fakes has sealed our fate.

I have an ebay store and still do run a small number of auctions on a regular basis, but only because as bad as it has become here, it is still more than marginally better than any other site I have tried. Will be here till a real alternative pops up.  

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This user has validated their user name. by: Marie

Mon May 27 21:17:51 2013

@sickandtired

JD can't get rid of the "noise" without getting rid of Ebay.  He didn't refer to the "noise" as being small sellers.  He referred to ALL sellers as "noise".  So if there were no sellers at all on Ebay, there would not be any need for the site any longer.  While I do not agree with quite a few of the things that man does, he isn't trying to bankrupt the company.  That certainly would not serve him well personally or professionally with the kind of salary he pulls.

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This user has validated their user name. by: bitbybit

Mon May 27 21:22:54 2013

Other ways ebay is diminishing auctions:

Buy It Now has to be priced at least 30% more from auction start price making auctions even a bigger risk to the seller. Since the BIN is too high and auctions have a higher starting price for what the seller is willing to accept, auctions with BIN will have a poor sell thru.

Sellers are charged final value fees if sellers should end auctions early with a bid. Okay I know what some of you are thinking that this is a good thing and I would have agreed if ebay had not manipulated sellers' auctions in the first place with DSRs, search manipulation, rolling blackouts, best match, free shipping etc. Sellers honoring their auctions until the end and lose their shirts will start their auctions higher and/or go to the JD's desired fixed price. Since I seldom end auctions early unless there is an error, I have bit the bullet and sold items at a loss to the highest bidder, if there is even another bidder. Learned to start auctions at the price I will accept or go to fixed price but sell thru is beyond terrible.

First and foremost Ebay no longer advertises to bring buyers to the site and especially NO advertising for auctions.

You can no longer find anything and everything on ebay. Sad Weird Al's song is no longer relevant.  

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by: Bloggo This user has validated their user name.

Mon May 27 21:55:55 2013

"Heritage Auctions is the largest collectibles auctioneer and third largest auction house in the world."
Auctions are doing just fine. JD is too dim-witted to realize it.

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by: Patricia This user has validated their user name.

Mon May 27 22:56:40 2013

Maria - I do agree with most of what you said.  Gave up my store after JD took over and everything began to nose dive...I've been building a following on other venues and only occasionally putting an item or two on Ebay.  I made it my business not to depend on them anymore.  I agree with you on the search - they've literally screwed around with it until it just does not make sense for any seller...big or small!  As for auctions...make buy it now free and make the raise over the starting price reasonable!  People who really want the item immediately can buy it outright!  If they want to make things work they can...but I'm really beginning to think they don't know how!!!...they only "think" they do!  Its pretty obvious in all the changes they make they have NOT consulted any sellers!

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by: Patricia This user has validated their user name.

Mon May 27 22:59:50 2013

Bloggo - I agree.  The site I mainly sell on these days is dedicated to art and uses both an auction and a fixed format and has no trouble with sales.  In fact I've even experienced some of the bidding wars that were the usual fare in the old days on Ebay.  Its Ebay's constant fiddling and unreasonable changes that have chased off tons of sellers....MOST of whom were also buyers!

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This user has validated their user name. by: Marie

Tue May 28 02:43:12 2013

@Patricia

I don't know how much we can blame the amount over the list price you have to increase for the BIN price.  Up until April 30th it was 10%, and now the new rule is 30%.  So that big increase has only been around for 3 weeks.  My sales have been down a whole lot longer than that and I can bet a whole lot of other sellers are in the same boat as I am.

I'm not trying to pick on your posts.  It was just a comment as I just don't know how we can blame the problems with auctions that have gone on or a long time on a rule that is only 3 weeks old.

But that darn search, that is a whole other story.  I find it annoying and I'm confident others do too.

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by: PowerSeller2007 This user has validated their user name.

Tue May 28 05:51:14 2013

Greedy ebay gamed auction listing and trying to maximize ebay profit at the expense of sellers.  It infuriated sellers to offer bargain price auction listings.  The fun is no longer there.  The days when buyers getting bargain prices are gone.   I am glad there would be much less nuisance newbies influx.

Ebay brainless skull is gaming it wrong and won't know even what hit ebay on the head.  

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by: K&J This user has validated their user name.

Tue May 28 07:37:47 2013

Apples and oranges
Figures don't lie - liers figure
Go to Whatsellsbest.com and tell those sellers auctions are dead

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