|Sun Oct 19 2014 11:22:35|
Can Consumer Sellers Help eBay Revive Auctions?
By: Ina Steiner
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?