Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Wed Apr 30 2014 20:56:07

Is eBay Killing Online Auctions?

By: Ina Steiner

Sponsored Link

eBay is changing its fee structure to force lower-volume sellers to list in the auction format in collectibles and other popular categories such as Clothing, Shoes & Accessories. The reason is clear if you were listening to eBay CEO John Donahoe and CFO Bob Swan's talk with Wall Street analysts on Tuesday: auctions were down 9% in the first quarter.

But will manipulating fees help fix a part of the business that eBay has left adrift while it pumped up listings from large brands and retail chains in fixed-price format, striving for a "retail-like" shopping experience?

You can read the details of the fee changes in Thursday's EcommerceBytes Newsflash. The bottom line - non-Store subscribers will no longer get 50 free fixed-price listings in Collectibles, Pottery & Glass, Sports Memorabilia, Clothing, Shoes & Accessories and 10 other popular categories. But they will be able to list up to 100 auction listings and pay no insertion fees. (There's more to it, be sure and read the details.)

At this point, it feels like it's too little, too late for the auction business. eBay auctions have been flat for a number of quarters - and, believe it or not, that's what Donahoe told analyst he would strive for - zero growth - during Tuesday's call.

But sellers take a big risk listing in the auction format. If eBay can't drive enough interest to those listings, sellers end up with an ending price far lower than the value of the item.

In the old days of eBay, many sellers found success listing collectibles for 99 cents to draw bidders in, but these days, many sellers are reluctant to list with a low starting bid. Upon reading eBay's announcement on Wednesday, some sellers have already said they would switch from fixed price to auction format to continue to get free listings in those categories, but set a high starting bid.

eBay isn't doing anything to change the inventory listed in auction format or to drive bidders to auctions - it's a superficial change.

Here's what Donahoe told analysts:

"We saw auctions come in less than we had hoped. Auctions were down 9% for the quarter. And there are little things that impacted that, we made some pricing changes to C2C (consumer to consumer) last year, we made a little bit of search changes, and so we're making adjustments to make sure that we allow consumers - buyers and sellers - to choose the format they want - 'cause we truly are indifferent because we monetize the same way. But also to ensure we're having the best balance in our marketplace.

"And so the U.S. team is on top of that, and again Top Rated Sellers are growing faster than ecommerce, fixed price is growing faster than ecommerce and we're putting a little more focus on the C2C and auctions business to make sure it's getting closer back to kind of, you know, zero growth rates."

Former eBay CEO Meg Whitman was fond of talking about "levers" she could use to adjust the Marketplaces business, and fee changes were a big part of that. This latest fee change feels clunky and awkward, and while it might increase the number of auction listings on the site, I don't expect it to revive auctions in a positive, meaningful way.




Comments (108) | Leave Comment | Permalink

Readers Comments

Perminate Link for Is eBay Killing Online Auctions?   Is eBay Killing Online Auctions?

This user has validated their user name. by: Basset

Wed Apr 30 21:22:26 2014

So... What I'm getting is:


''little bit of search changes''  = Cassini

''Top Rated Sellers are growing faster than ecommerce'' = BAD

''Fixed price is growing faster than ecommerce'' = Bad

''zero-growth'' = Good

???

Perminate Link for Is eBay Killing Online Auctions?   Is eBay Killing Online Auctions?

This user has validated their user name. by: iheartjacksparrow

Wed Apr 30 22:22:26 2014

"Lower-volume sellers" equals small sellers equals "noise." Aren't these the very people JD has been trying to eradicate from eBay since 2008?  

Perminate Link for Is eBay Killing Online Auctions?   Is eBay Killing Online Auctions?

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

Wed Apr 30 22:48:27 2014

If this doesn't show Wall Street that Curly, Larry, and Moe haven't a clue how to manage ebay, I don't know what will.

This is one The Ho's most pathetic statements and nearly incomprehensible at that.

Easter is over, Ho. There'll be no auction resurrections, and I suspect the same will be true of your career when Pierre tells you to go and spend more time with your family.

Bob Swan: review what happened to Mattel's Barbie mom, Ruth Handler, and pay heed.

You, sir, are legally responsible for signing off on the financial fiction The Ho releases.

Perminate Link for Is eBay Killing Online Auctions?   Is eBay Killing Online Auctions?

by: ConnecticutGal This user has validated their user name.

Wed Apr 30 22:53:11 2014

I don't believe it has anything to do with the decline in auction-type listings.  It's Ebay having a kneejerk reaction to the decline in income from the Ebay portion of their business.  Ebay management just doesn't understand: 1)their customer segmentation (customers = sellers), and, 2) that there is a difference between Corporate Strategy and Tactics.  Ebay clearly has been measuring something or other over the past year because one month, I'll get a free auction-type listing promo and the next month, a free fixed price promo. Someone must have concluded from a seat-of-the-pants analysis of these promos that if there are more auction listings, then there are more browsers/buyers. So, this month, they have thrown some tactics around to force auction-type listings. In 3 months, we all might be told there will be no auction-type listings allowed.   Who knows? To confound the "noise" in the announcement to which Ina refers, just last week, I received an offer of one free month if I were to open a store on Ebay by the beginning of May.  That would be good for Ebay in that it might help them boost their annual income stream for the next 6-12 months but it is certainly not a long term strategic move.  There was no compelling reason why I should open a store when there is no commitment nor guarantee from Ebay that the rules of the game won't be changed again in a month or two. Again, strongarm tactics with no clearly communicated strategy.  Memo to Ebay Management:  Corporate Planning 101 tells you to know your customer, and then, set a strategy, communicate it properly to stakeholders (not shareholders) and ride with it for 3 years.  

Perminate Link for Is eBay Killing Online Auctions?   Is eBay Killing Online Auctions?

by: NetWatch This user has validated their user name.
Web Site

Wed Apr 30 23:02:46 2014

Hypothetical Board Room Discussion by Ebay Top Brass
One exec sighed, "Wheeew! That was close with that Icahn guy! He almost had the goods on us and was about to spill the beans." Another top exec grinned. "Not to worry. JD has an export oversight position, his wife is an Ambassador to the U.N. for Human Rights, Pierre our Founder can buy and control the Press, and we just repatriated a cool $9 Billion back to the U.S, and are going to pay some $3 billion taxes on it. We're home Scot free."

Perminate Link for Is eBay Killing Online Auctions?   Is eBay Killing Online Auctions?

by: Patricia This user has validated their user name.

Wed Apr 30 23:02:49 2014

Well if JD is trying to kill auctions he's doing a banner job of it.  For the heck of it, i listed 23 small paintings on ebay.  After a week, i had no bids and a total of 26 views for all the listings!  One of those paintings sold on my dedicated art venue with over 130 views in the first 24 hours.  I suggest to JD if he is at all serious about reviving auctions that he get off his butt and invest some of ebay's moldy off shore money into a heavy advertising campaign!!  Put up or shut up JD...you've run off a lot of good sellers who used to be buyers.  Nothing more you can do for sellers can make up for the loss of decent traffic!

Perminate Link for Is eBay Killing Online Auctions?   Is eBay Killing Online Auctions?

by: trader_chris This user has validated their user name.

Wed Apr 30 23:05:44 2014

I've sold full time for three years now and most of the items I list are collectibles sold at auction. Buyers still respond well providing there's a good market for the item and they feel they can either get a deal (buying an item at a competitive price, or buying several items for their collection at once to save on shipping) or if they have an opportunity to get something rare or hard to find. eBay auctions aren't dead. Sellers just need to do a better job distinguishing ''To Auction or Not to Auction...'' (that is the question).

Perminate Link for Is eBay Killing Online Auctions?   Is eBay Killing Online Auctions?

by: alaska This user has validated their user name.

Wed Apr 30 23:05:53 2014

EBay is coming across as a very confused company. The reason auctions are down is eBay chased away most of the good buyers and sellers. Taking away the wild card search was a huge mistake. Allowing searching in multiple categories (show a list of the major categories and the buyer checks the boxes for the ones he/she wants to search in) is a natural refinement that eBay has never implemented. For most of my keyword searches I would search in art, antiques, and collectibles at the same time. Buyers are swamped with way too many hits in most searches that show items that are not even close to what I am looking for. I've spent thousands of hours tweaking bookmarked eBay searches. It's become extremely hard to find what I'm looking for on eBay. Then eBay insults my intelligence by changing my search to a similar word, or by showing me things that have absolutely nothing to do with the keyword I searched. EBay killed off all of the non-fiction book categories. They should have expanded them. I could go on and on. EBay is a colossal mess.

Perminate Link for Is eBay Killing Online Auctions?   Is eBay Killing Online Auctions?

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

Wed Apr 30 23:07:38 2014

Free auctions and listings is what is killing auctions AND sales overall. With nothing invested in a listing,  people list all kinds of crap.  More listings, less visibility.  Ebay wants more search results for the buyer. Other than free listings, this was accomplished by adding characters to the listing heading. This caused sales to drop.  They don't care if their revenue is disbursed over a bigger field of sellers, but it sucks for us. This is backfiring though as a lot of medium and larger sellers have already called it quits. They are beyond clueless.

Perminate Link for Is eBay Killing Online Auctions?   Is eBay Killing Online Auctions?

by: JohnGermaine This user has validated their user name.

Wed Apr 30 23:20:55 2014

And don't you forget it's all your fault that the buyers left and didn't come back. Thus the purge coming this August.

Perminate Link for Is eBay Killing Online Auctions?   Is eBay Killing Online Auctions?

by: Linda This user has validated their user name.

Wed Apr 30 23:33:24 2014

eBay themselves put the decline in auctions by consistantly offering up more free listings for fixed price vs auctions. There are a lot of people out there that love the thrill and challenge of WINNING. There are buyers who buy at BINS because they need just ''need it'' and I hear more & more people are going to Amazon if they just want to buy an ''off the shelf'' type item. IMHO I think this is eBay's reaction to trying to regain the buyers that left eBay for Amazon, which included the thousands of sellers that were forced off eBay by Guardrail who will never buy from an eBay site again. Take the 15K or so that were kicked off, multiply it by 2 since eBay lost not only 15K vendors, they lost 15K buyers. I think eBay is actually trying to bring back auctions because the BINS really are not doing that well. My items have consistantly sold better using auction format.

Perminate Link for Is eBay Killing Online Auctions?   Is eBay Killing Online Auctions?

by: LinneyPinney This user has validated their user name.

Thu May 1 00:02:32 2014

eBay will never be able to resurrect what once was. They are an archaic "has-been". I made a lot of money on that site, when it was good, since 1998. It's over. It's a bargain basement and a hostile place.  

Perminate Link for Is eBay Killing Online Auctions?   Is eBay Killing Online Auctions?

This user has validated their user name. by: elpereles
Web Site

Thu May 1 00:07:03 2014

Sorry. The free promos aren't killing the site or sales and not all people list crap. It is eBay stupid nonsense policy to do stupid things with focus only in get money for them.

The problem with the auctions vs. BIN is simple. Some sellers want to sell their stuff fast (fast payment) and have more exposition time. So lets go for the BIN. In the collectibles area you have a lot of people selling their personal collections to get some extra money and I'm sure not all of them live 24/7 in eBay. In an auction you need to be more interactive with the site. Also lets not forget that not everybody make the jackpot with a ''bidding war'' in all his/her items.  

Perminate Link for Is eBay Killing Online Auctions?   Is eBay Killing Online Auctions?

by: comet This user has validated their user name.

Thu May 1 00:28:12 2014

Hmmmmm---

eBay LOST 9% of their auction sales

eBay drove off 9% of the sellers MOST likely to USE the auction format

eBay drove off 9% of the BUYERS who were actively SEEKING the interesting unique and oddball.

Coincidence?

I think not.  

Perminate Link for Is eBay Killing Online Auctions?   Is eBay Killing Online Auctions?

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

Thu May 1 00:33:44 2014

elpereles.

no. not all people sell crap. but the more listings a buyer has to wade through to find yours means less visibility and page views.  this has been declining for several years now.  this is due largely in part to FREE LISTINGS.  it has affected both auctions and BIN.  i have seen best offers continue to go lower and lower.  there was once a time i would hardly EVER see an offer less than half of what my BIN price was.  now,  the majority are.  the site is over saturated. and yes, alot of it IS crap, or people just trying to get rid of their stuff no matter the price they get.  they're not on ebay trying to run a business and its tough to compete with that.  

Perminate Link for Is eBay Killing Online Auctions?   Is eBay Killing Online Auctions?

This user has validated their user name. by: bitbybit

Thu May 1 02:32:28 2014

Making best match the default is what started the decline in auctions. Remember back in 2007 JD failed with his Ebay Express. Not accepting failure, JD set out to kill the ''noise'', namely auctions. Stores to core was the next step taken to destroy auctions. Hiding bidders IDs also took the fun out of auctions. What created bidding wars and impulse bidding was having the auctions with ''time ending soonest''. When was the last time you saw a great ebay TV ad - not counting the insulting mom jeans or lame screaming gift commercials?

Perminate Link for Is eBay Killing Online Auctions?   Is eBay Killing Online Auctions?

This user has validated their user name. by: Ric

Thu May 1 02:44:51 2014

JD is going to learn that his past sins can not be absolved by simply pushing buyers to list in auction format by virtue of fee reductions.

7 Years ago, John Donahoe expressed his displeasure at the garage sale image of ebay, and he downplayed the auction format along with expressing his displeasure.

The damage is done, JD has succeeded in killing the format, all that's left to do now is bury the corpse.

Auctions will not thrive without buyers, and eBay has managed to alienate a significant number with all their changes.

As long as Best match is the default search, the auction format is all but dead.

If Jd and his team of MBA's did any real buying and selling on the site they rule over, they would know how oppressive their reign has been. Disruptive innovation turned to destructive innovation in year 2 of JD's reign.

His turn around plan for eBay has been a failure, and his attempt to revive the auction format he killed will fail as well. Face it John, you would not have to revive auctions if you had not killed them in the first place.

Ponder that on your next thinking day.

Perminate Link for Is eBay Killing Online Auctions?   Is eBay Killing Online Auctions?

by: KathleenJohnson This user has validated their user name.
Web Site

Thu May 1 03:36:53 2014

What at joke....

Same fixed"Pool" of buyers and sellers.

Fixed Fixed Sales up 17% (after push to move Sellers there  and where Sellers moved their product as they were tired of bottom feeders at Auctions feeding on lack of activity)....

Auctions down 9% (suffers loss with thrust to Fixed price).....


===> now panic to move em back to Auctions where Sellers risk loss due to lack of buyer activity and bottom feeders - without the 60 day notice (to which they say "oh oops" with some spin.

Nothing good can come from trying to micro manage something as diverse as cats.

You could not write a better soap opera.

Perminate Link for Is eBay Killing Online Auctions?   Is eBay Killing Online Auctions?

by: GypsyWitch This user has validated their user name.

Thu May 1 04:16:08 2014

Is EBAY killing online auctions???

No, DONAHOE IS KILLING EBAY and forcing people to leave FEEBAY!!!!

Donahoe said he's "striving for zero growth".......then why's he bitching about sales being down 9% in the first quarter??

Please, do yourselves a favor and get the HELL away from FEEBAY. It's the same as the country we live in - IT'S NOT GOING TO GET ANY BETTER!!!!

See me on Webstore @ dealsfromtheridge or on Bonanza @ a4dablefashuns.

DONE with FEEBAY!!!!! BOYCOTT FEEBAY!!!!! But not until you contact FTC and Pierre Omidyar, Feebay's founder!!

Perminate Link for Is eBay Killing Online Auctions?   Is eBay Killing Online Auctions?

by: ibs This user has validated their user name.

Thu May 1 05:25:36 2014

Primarily as a consignment auction seller in antiques and collectibles for 10 years, I witnessed the deflation of activity when default was changed to best match…duh.  It was literally overnight.  A low start price (never at .99 cents, though) was no longer a viable strategy.

For buyers, search is so labor intensive to start with; then, one has to AGAIN drill down to auctions, THEN to time ending soonest…all this work may be worth it for the hard core bargain buyer, not for the mainstream.

Ebay essentially decimated online auctions. The new free listing sale is not even too little too late, it does not even apply.  It only encourages BIN sellers to split their 100 free listings and start the auctions at the BIN price…and who can blame them for wanting to take advantage?

Imo, Ebay has played a large part in the trending mindset of buyers towards “want it now” rather than plotting and planning over a 7 day period. (I see this in the barrage of “do you have a BIN price” emails).  Although I do not believe Ebay is smart enough to employ this strategy to eliminate auctions….more likely, they are dumb enough to think this will be the revival.

Ebay auctions have become a wholesale marketplace, a great source, for dealers to shop antiques and collectibles....the equivalent of a yard sale.  Of course there are some exceptions- certain items come into demand and can do quite well. Some sellers that have an in demand niche and have developed a good following over the years do well, but I am sure they, too, see a decline in sales. Many have left.
 
-  It used to be number of watchers indicated good potential, now it’s more like a high number of watchers- may, perhaps- increase the chance it will get sold for the start price or maybe a little above. Now, bidding wars almost always are between only two bidders, rarely more.

-  Non payers have increased from a couple –maybe two or three a year to at least five a month- I auction 50 items a month.  Or, I hear from the winners that they forgot they bid and found something else, wanting to cancel the transaction.

-  I could go on….

The viability of online auctions is diminishing. This latest gimmick will contribute yet another blow.

I used to wish another auction site would come to life, but it is too late.  It is no longer an appealing business concept thanks to Ebay.

Click to view more comments
1 2 3 4 5 6  [Next Page]


Login is required to post comments.
To sign in to leave a comment using your AB Verify User Name, fill in the form below. If you have not yet signed up for AB Verify, or if you'd like more information, go to the Registration Page
.

Login for AB Verify
Be sure and use your email address and password to log in.

 
Email:
Password:
 
 Forgot Your Password?
 Even though you are signed in with the AuctionBytes Blog, you will have to sign in to the EcommerceBytes blog. But you can sign in with your existing AB Verify info.