Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Sun Oct 19 2014 11:22:35

Can Consumer Sellers Help eBay Revive Auctions?

By: Ina Steiner

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Auctions are down on eBay despite the company's best efforts to keep them at a zero growth rate. And eBay will likely find that the more auctions decline, the harder it will be to revive them.

Back in April, we reported the 9% auction decline experienced in the first quarter. At the time, eBay CEO John Donahoe said eBay was indifferent to auctions versus fixed-price "because we monetize the same way," but wanted auctions in order to "make sure that we allow consumers - buyers and sellers - to choose the format they want."

eBay is trying various approaches to revive auctions - but not to grow them. Donahoe told analysts he just wants zero-growth - and as he is discovering, it's very difficult to manipulate auction growth rates - they fell 7% in the second and third quarter of this year.

As usual, eBay first turned to fees in order to try to fix the decline in auctions, trying to force lower-volume sellers in certain popular categories such as collectibles and clothing to list in the auction format.

Some sellers say a better approach would be to change the requirement around BIN pricing and auctions. This reader explains the concept in a letter to EcommerceBytes. (For auction listings with BIN, "the Buy It Now price must be at least 30% higher than the starting price," according to the eBay policy.)

Similarly, eBay is trying to get people to list auctions at a low selling price through its marketing messaging and through messaging presented during the listing process. But unless you have a vibrant auction marketplace with lots of people bidding against each other, it's a dangerous game to list a valuable item for 99 cents, as a reader wrote to me this morning:

"Regarding eBay's desperado attempts to reignite the Auctions they've done their best to kill: I will never go back to auction listings until I can be sure that my items are seen 24/7 for the window I pay for. The days of being able to start high-dollar items at $0.99, knowing they'd end at a decent price, are gone and have been for some time. No, the clueless MBAs at eBay can run all the sales on Auction-style listings they want. I'm not biting."

Next - the company has been trying to attract "consumer sellers" to boost auctions back up to zero growth rates.

- The "flip it for a win" ad campaign encouraged people to sell their used cell phones on eBay, which seems like a really hard category to get people to try selling on the site for the first time - you really have to describe your phone and compatibility in your descriptions, and buyers make a lot of mistakes when purchasing.

- The Level Up campaign eBay has been running this month encourages users to keep logging in for a chance to win prizes. Apparently it encourages participants to "watch a video for 5 points." Said one eBay user on the boards, the video "was about how "easy" it is to sell on eBay!"

Does it make sense to try to "grow" auctions at zero-percent so they maintain the same percentage of GMV as fixed-price listings?

If eBay wants to revive auctions, what should it do?




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Perminate Link for Can Consumer Sellers Help eBay Revive Auctions?   Can Consumer Sellers Help eBay Revive Auctions?

by: NetWatch This user has validated their user name.
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Sun Oct 19 12:49:10 2014

The so-called "disruptive innovation" from a clueless CEO has basically destroyed the eBay platform for small sellers and tarnished the eBay brand permanently in the public mind.

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This user has validated their user name. by: LDS Brother

Sun Oct 19 12:51:28 2014

Unfortunately I am afraid NOTHING is going to ignite Auctions or the entire eBay site.

So many of the Sellers exterminated unfairly during Donahoe's reign of terror on the lying opinion of a buyer who got exactly what was as described, killed the marketplace !

Those Sellers, who got wrongfully terminated, stopped buying on eBay, they told their friends, family what happened to them unfairly, and not to support eBay for the evil they committed on an honest seller.

Donahoe could never see the end game of his destruction ! He only say for the quarter or near term.

You CANNOT treat Sellers like that, and expect the site to sustain itself, or grow !

Only a TRUE Horses Ass would believe you can !

Like I said, I could care less what Wenig does now, the site is history, and rightfully so !

To many people destroyed that were good honest sellers, to many bridges burned, there is NO REVERSING his devastation ! He won, Pierre won we ALL Lost !

Even if it closes, they still won, then don't need eBay anymore, nor do they care if we did or do !

I mean who would want to sell on this site ?

1. No Buyers for Good Sellers
2. Best Match Manipulated Search engine that steers the few buyers to the items eBay can HOG the biggest Final Value Fee ( Low Price Bargain is no Advantage any longer )
3. People can still ding, and defect you, then you have to wait 1 or 2 hours on the phone, to get a foreign CS agent with broken english, who can't do anything for you any how most times !

eBay is a damn joke at this point, and I truly hope Devin Wenigs first announcement is "Hi, we are closing down forever !"

I hate eBay with all my heart for the blood, sweat and tears and effort I put into this site and the way I was treated like sh*t ! And other sellers like myself !

Descoring, or auctions, anything they try is now to TO LITTLE TO LATE !

The Magic is gone, Donahoe could of tweaked a few things, when he took over and not made the mess he did, ruin the lives he did, make Amazon grow like leaps and bounds !

With the economy we had eBay should of been BOOMING the last 6 years, but NO Donahoe has to change everything, and PUNISH the whole group of small to medium sellers to crack down on the bad ones ! What an ass JD was/is !

Like I said on another post, right before Donahoe took over in 2008 I grew MY eBay business up to $35,000 to $40,000 yearly and STILL growing till he took over !

Had he of not meddled like he did, I may have been up to $75,000 a year by now ! But NOPE he exterminated sellers, who WERE buyers, he inflicted cruel and unusual standards on sellers, that were damn near impossible to survive with NO RECOURSE when screwed from a Buyer !

Yet he FREE S/H/I, his 1 day Handling, his kiss the Buyers ass he made us sellers do, did it grow eBay 6 years later ? Hell no ! It killed eBay, because many of sellers were buyers also, and WE built the site with word of mouth, and us sellers have now KILLED it with word of mouth, speaking to our friends, and family, and neighbors and aspiring wannabe eBay sellers, telling them of the HORRIFIC treatment, and unfair standards placed on us !

REJOICE MY FELLOW SELLERS ! We did it ! We KILLED eBay's growth and sales, and who cares if we ruined our own career ? I don't !

I thought I would make $10,000 this year, but after the last 2 weeks, only 10 weeks away from Christmas, I am now on course to make $8,000 Net Profit GROSS for the year !

I will NEVER support this company, ever, don't give a rat's ass what Wenig has up his sleeve good or bad they will NEVER get my support, or me telling others it is a great site to sell and buy !

Pull down the curtain on eBay.com the show is over folks, they need to just close it down and rightfully so ! eBay name/brand is SKULL & CROSSBONES TOXIC

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

Sun Oct 19 14:40:30 2014

Rest in Pieces, eBay Auctions.

If eBay auctions had been merely neglected... and if they tried to ''revive'' them 3 or 4 years ago, then perhaps they might have been successful.

But the fact remains that auctions weren't simply neglected, they were INTENTIONALLY DESTROYED.

All that damage done, and for what? JD's ego and arrogance and his smug elitism?

Even with JD no longer at the helm, who would trust eBay now?

I wouldn't.

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This user has validated their user name. by: Tula

Sun Oct 19 14:58:41 2014

It's really a shame what Ebay's misguided policies have done to this once-thriving marketplace. Donahoe took over and immediately began marginalizing the ''flea market'' sellers he didn't like, not realizing that they were the core of the successful auction marketplace. These same sellers were also heavy buyers. Ebay used to be *fun* - the anticipation and competition of bidding on auctions was exciting for a lot of people on both sides of the transaction. But Donahoe and company didn't see that. They felt those who participated in that kind of sale were beneath them and kept their eyes turned on Amazon, not realizing that the business model was too different to work on Ebay.

Amazon's success is due to the economy of scale and the fact that they are also retailers, like their 3rd-party sellers. They actually understand retailing. Ebay's core was a different thing altogether. It was designed for consumer-to-consumer selling, not business-to-consumer. Yes, lots of Ebay sellers are businesses, but that doesn't negate the model. It just means that policies geared to big business retail selling don't really work for the kind of sales that Ebay's auction users were doing. Unfortunately, Ebay management didn't (and still doesn't) understand this. Applying the same policies, like this Managed Returns debacle to collectible/used goods isn't going to work the way it would for brand new consumer goods.

No true seller wants to rip off buyers, but all sellers are in the game to make money. Keeping customers happy is one thing, but trying to apply cookie-cutter policies to vastly different business models just isn't going to work.

Look at how the major retailers operate. There are categories of goods that simply do not allow returns, like swimwear, lingerie, underwear (ewww!), etc...  Similarly, what's to stop unscrupulous buyers from ''renting'' items and then returning them? Buy a book, read it, then return it?

Ebay should look to how true auctions operate if they want to increase sales in that segment, along with adjusting how policies are applied to certain categories of goods. With such a varied marketplace, you just can't apply one-size-fits-all policies and expect them to work. Too bad they don't make the company management try to sell in various categories of goods on the site before they allow them to make policies.

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by: Russ This user has validated their user name.

Sun Oct 19 15:40:39 2014

HELP eBay?  Not a chance!  They helped too many long-time sellers right out the door.  Why would anyone so miserably abused want to aid/abet/help such an entity?

As mentioned above regarding ''flea market'' atmosphere and the elimination of same, it is interesting to see where folks are returning...the flea markets!  I am not a flea market seller but frequent them and observe a trading atmosphere of respect, fun and true human interaction...really refreshing.

I'm currently dealing with a former buyer off-eBay...yes, I said it...report me!  He's only a buyer and mentioned the hack which impacted his buying activity due to someone using his hacked account and never paying for the items.  He was suspended due to unpaid items.  So much for the ''buyer experience.''  He's buying from me and I'm lost...as I have no one to whom to pay fees...not even PayPal...yes, I'm waiting for a Money Order...old school but fun and, like the ''old days,'' I actually feel comfortable trusting again.

The buyer, unaware of the seller situation, is now a new reader and perhaps subscriber to eCommercebytes.  Information is sometimes slow but the jist of the matter will be repeated to others...so worth it!

eBay was once a great place but those days are history and shall never return.

John Donahoe is no Jeff Bezoz, good or bad as that may be but for God's sake JD creativty would have been a plus...eBay is just a something else wanna be.

Thanks...as usual, the rant felt great.

Good luck to all on these blogs...you will survive as most of you are good, decent people...so above the BS at eBay.

Side note:  I started listing on Craigslist, locally of course, and have had decent sales with all things, repeat customers...fun, again!  Baby steps...

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This user has validated their user name. by: Rexford

Sun Oct 19 15:47:25 2014

I think that we can all see what JD did to auctions (and what he did to eBay), so anytime I hear a sentence that starts with "John Donahoe said" I know that complete idiocy will follow.

Who in their right mind would place an expensive item up for auction with eBay's CASSINI invisibility cloak in action, not to mention the every other day site outages and glitches.

If auctions are to ever make a comeback they will have to do something about the broken search and sellers will have to be confident that their auction listings are actually being seen.

Those of us who have sold on eBay for a long time remember having 15+ watchers on and item (it was common) so we can detect visibility.

So Mr. Wenig will have to do something besides selling a million $$$ worth of stock shares as eBay stock drops like a rock to inspire some confidence.  He's not getting off to a good start with the stock shares sale, that's for sure.

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by: GuitarSeller This user has validated their user name.

Sun Oct 19 16:16:22 2014

Considering every time I list something (BIN or auction) eBay ''suggests'' I sell my item for .99,  why in the world would I trust them to bring any views to my listings let alone bids?  We never start at .99 although in the heady days of old we sure did. We run occasional auctions on a few items here and there but only on clearance items that have been on the shelf too long.  

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This user has validated their user name. by: Basset

Sun Oct 19 16:16:25 2014

The facts Tula and Rexford lay out make sense.

The only thing I might add is that if sellers were SELLING on eBay, auction or otherwise, they just might also be BUYING on eBay. Simple logic.


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by: nsc This user has validated their user name.

Sun Oct 19 16:46:01 2014

Yes, what Rexford and Tula said.

I would also add that the success of any auction, whether digital or live, depends on being able to reliably gather a good audience.

Before Donahoe, eBay reliably provided a good audience for good items. But between "managed search," "tap on/tap off visibility," and eBay's attitude of "the buyers are OUR customers, we owe nothing to the sellers," eBay has destroyed the predictability of the marketplace.

Today true auctions work on eBay only for the hottest of markets, for example, good Chinese porcelain. For anything else, that $0.99 starting price may well sell at $0.99.

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This user has validated their user name. by: Mercy the Mingless

Sun Oct 19 18:21:51 2014

In May 2008, Scot Wingo interviewed eBay CEO John Donahoe for Wingo's blog ''Ebay Strategies''

Wingo - Q: ''What are you doing to accelerate eBay?''

Donahoe - A: ''We are driving more changes than ever. There are no silver bullets, we're testing in different geos, when we find things that work, we'll do more of them and less of the ones that don't.''

Donahoe is delusional.  There is no other explanation.  

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by: JQ This user has validated their user name.

Sun Oct 19 18:41:07 2014

The primary reason auctions are dying at Ebay is due to the rolling black-outs of independent seller's inventories. E-bay's in-house Cassini search engine blacks out independent seller's inventory in all regions other than their home region (i.e. Denver region) at least 50% of the time. What this has resulted in is a sharp decline in the exposure of seller's inventory. Today most sellers receive roughly half as many views per item as they did last year. Obviously auction bidding is directly tied to exposure. The consequences of the rolling black-out policy is that today auctions end at much lower prices than they did as recently as last year. As an Ebay seller I almost entirely abandoned auction listings several months ago as I felt the financial consequences of Ebay's new policies. Outside of a relatively small number of items, listing auction style on Ebay today makes no financial sense. Listing all my inventory in fixed price causes it to sell more slowly, but at least when items do sell I am assured of receiving a reasonable price.

If Ebay would like to revive auctions the solution is simple. They would need to eliminate their rolling black-out policy on them. This is something they are reluctant to do as these black-outs are the primary method they are using to direct more traffic to their preferred larger clients who appear to be exempt from them.  

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This user has validated their user name. by: iheartjacksparrow

Sun Oct 19 18:55:38 2014

I don't think eBay can revive auctions until they change the default search back to 'ending soonest.' And they need to insure that all auctions are given equal visibility. And they would need to make a concerted effort to eradicate all shill bidding.

I started selling on eBay by listing items around my house (toys, and movie and music memorabilia) that I didn't want anymore so I could get extra money to ... buy things I wanted on eBay! Now I only look on eBay as a last resort.

I feel very sorry for all the good and honest sellers who relied on money from eBay sales to live on, only to have their businesses destroyed by JD and the unconscionable polices he has implemented. I used to be one of the biggest cheerleaders for eBay, telling everyone I knew (and some people I didn't know!) how great it was to sell and buy there. Now, even thinking about eBay makes me grimace. Unfortunately, with all the hatred felt by so many, it's hard to imagine that eBay will ever be anything more than a shell of what it used to be.  

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by: Ron This user has validated their user name.

Sun Oct 19 20:13:23 2014

Ina,

As I wrote to you a number of years ago, Donahoe made a major strategic guff when he encouraged fixed price selling over auctions at the beginning of his reign of "disruptive innovation".  Stupid disruption is more like it.  Ebay was at the right place at the right time with the right formula when it was initially launched.  As you point out, you need a lot of buyers and a lot of sellers trading in the auction format in order to have a transactional equilibrium.  The buyers are willing to put a lot of stuff out there, because there are enough engaged sellers to ensure reasonable bids and final price results.  Because there was basically very little else on the internet at the time, eBay was able to build a huge user base.  The result was a strategic "moat" - difficult or impossible for any other sites to build an auction site due to the mass that eBay had established.  Anyone could build a presence as a fixed price business, but as an auction site, no.  This type of strategically unassailable business model is like gold, but instead of treasuring it, Donahoe et al basically demolished it through a series of policies formulated to favour fixed price transactions.  This put them in direct competition with what will eventually be many, many websites.  All that they had to do was establish a second fixed price site and leave the auction site alone - they certainly had the funds and clout to do so, without compromising the original eBay model.  In fact, they could have constructed a fixed price site that would have been much more functional than this strange hybrid that they have evolved.  Whenever a business tries to do two things at the same time, the solutions to problems are never properly targeted - the middle is always mediocre.
What bothers me the most about all this, is that eBay management has been stating for years, as justification, that people no longer wanted to bid on auctions.  This is simply not true.  If you ever attend a good live auction, bidding is generally robust, and a local auction doesn't have the huge audience that eBay once had.  People no longer want to bid on auctions on eBay for reasons other than they're impatient with the system - it has to do with various policies and structures that eBay has put in place.
Let's be honest about it - Donahoe was hired to boost the stock price.  Which he did do through a number of short term targeted tactics that were detrimental to long term strategic health.  He did exactly what Wall Street analysts wanted, even though those analysts didn't really understand the strategic implications involved in dismantling the original business model.  There was a wonderful interview on 60 minutes with Jack Ma of Alibaba, who stated "Number one - customers, number two - employees, number three - stock holders.  If you take care of number one and number two, then number three will be happy.  If they don't like the stock price, they should sell it.".  This almost sound anti-capitalist, but I find it refreshing.  It's about time that the business community start prioritizing what's really important.  

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This user has validated their user name. by: The End

Sun Oct 19 21:03:22 2014

The only way Ebay will ever make a comeback is when Donahoe exits and it all reverts back to the 2001 genre.

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

Sun Oct 19 21:37:21 2014

Hilw I personally believe nothing can be done to re vitalize the ebay marketplace, ebay management knows what it should do to tey.

But they refuse.

Instead we get surly customer service reps threatening still more seller abuse, the hard headed refusal to roll back the very anti seller policies that have created the monumental exodus, and a continuation of the arrogant Father Knows Best condescension that has been one of the hallmarks of John Donahoe and now apparently Devin Wenig.

Auctions? Fixed Price Listings?

Neither of the above. It's about keeping ebafia in business by giving criminal buyers free merchandise regardless of format and devising as many ways as possible of stealing more money form sellers.

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by: collectorjim This user has validated their user name.

Sun Oct 19 21:56:08 2014

Nothing can help eBay now. Way too much stupid and senseless bs all the time. It's exhausting and not worth the effort any longer.

Nothing anyone can do now, JD is sociopath so he will keep making things worse instead of better.

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This user has validated their user name. by: WOODJUNGLE! ON EBAY

Sun Oct 19 22:25:05 2014

The problem with auctions is that the traffic/listings ratio is so poor now.  Way too many listings added without the added traffic over the past several years.  The only way to revive auctions is to either boost traffic in a big way, or lose quite a bit of listings.  Both will be highly unlikely.  

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by: Grandma_Fish This user has validated their user name.

Sun Oct 19 22:55:57 2014

@Tula - Well-stated. eBay's policies have pretty much decimated the vintage and antique doll categories as well, IMO.

@Ron - Spot on! ShopGoodwill has absolutely no problems attracting bidders to their online auctions. (Lots of collectibles auctions on there, too!) Obviously, there are still plenty of buyers out there who enjoy bidding on auctions. They're just not coming to eBay anymore.

@iheartjacksparrow - I, too, feel badly for the small sellers who lost income they depended upon. When the economy tanked during 2007-08, eBay could have provided a niche venue where people who'd lost their ''real world'' jobs could have earned the income to keep their families fed and clothed. eBay could have benefited a lot of people. Sellers would have earned needed income (and felt good about it), buyers would have gotten the bargains they were looking for and eBay would likely have been able to give Wall Street the numbers it wanted. But, sadly, eBay missed the mark.

I still don't understand Donahoe's version of disruptive innovation. If you research that term according to business theory, it in no way defines the metamorphosis at eBay.

The definition according according to Wikipedia:

''A disruptive innovation is an innovation that helps create a new market and value network, and eventually disrupts an existing market and value network (over a few years or decades), displacing an earlier technology.''

Pinch me, but that doesn't sound anything like what's happened to eBay since 2008.

''And Time (and Amazon) moves on...''

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by: ConnecticutGal This user has validated their user name.

Sun Oct 19 23:16:07 2014

My guess is that the "plan" is to spin off any auction business in a combination with Sotheby's (so Sotheby's gets a tiered auction business of lower end, medium and high end stuff).  Then, what's left are fixed price listings and buyers will be able to sell only if they have a "store" like 11Main is attempting to do.  Last, the stragglers who don't open a store will be relegated to xyz (I don't know what -- maybe a new competitor to Etsy?).

This is what business consultants always advise.  They tell corporations that there are natural life cycles for each business and write white papers for $1 million that the Board has a hard time countering since the position paper was from a large consulting firm that the company paid.  That's why companies reorganize every seven years or so.  Keeps management looking like they are doing something productive and keeps consulting businesses in business.  I worked at a company for nearly 2 decades and during that time, we decentralized, placing execs in each country around the world, then some years later, recentralized requiring repatriation of all those execs.  Then, the logo was tweaked, which cost the company several million in new business cards and letterheads and packaging and collateral but at least they didn't relocate 1000 people.  The logo looked almost exactly like the old one. (And no, I didn't work for ebay.).

I will not list auction style for all of the reasons mentioned in the comments above.  The Buy It Now, at 30% above the starting auction price is just ridiculous.  

Last, there is a new thing for Fixed Price listings.  A potential buyer can ask a question through Ebay messaging and you can send a binding offer in response if you choose.  So, what's the point of "Best Offer?"  

I was trying to explain how ebay works to my 85 year old mother, who happens to be quite "with it" and she finally told me she lost me about 5 minutes into the discussion.

It used to be so clearcut, made sense to buyer and seller, felt like you were actually building a small business.  Sigh.  Progress.

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by: Beejay This user has validated their user name.

Sun Oct 19 23:49:06 2014

EBAY died they just haven't officially had the funeral. CONGRADULATIONS DONAHOE!

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