eBay’s Value and Selection makes it The Walmart of Online Auctions

Posted on May 9, 2008. Filed under: eBay, eBayInkBlog | Tags: , , , , , , |

Quote from Usher Lieberman as posted on eBayInkBlog.com:
“eBay is aggressively using price as a lever to improve the value and selection on eBay.com. Consistent with our goals, we have entered into a partnership with Buy.com to bring their new-in-season merchandise onto eBay.com. We expect to learn a great deal from this partnership and we will build upon the results.”
Interesting.  eBay is aggressively using price as a lever?  Okay, let’s put that to the test.  I went to the Buy eBay store and looked around.  I decided to do a price comparison on some items.  In looking at Buy’s feedback, I noticed that there were several items that Buy was selling but then had to refund because they didn’t actually have the item in stock.  So I decided to choose 3 items from the first feedback page where positive feedback was left for Buy.  That way, I could safely assume that Buy was able to deliver these items and thus I could compare three items from Buy’s inventory to other competitors who state that the item is currently in stock.  Okay, enough of how I chose the items to compare.  Let’s see how great of a deal Buy eBay customers received:
First item:
eBay auction number 170214529031
Description: Sharp EL219RII Calculator w/ Tax Keys
Buy’s price on eBay – $47.99 + $0 shipping = $47.99
(Competitor) Keenzo.com – $37.97 + $8.95 shipping = $46.92
Second item:
eBay auction number 170215967523
Description: Navigon GPS Protective Hard Shell Case
Buy’s price on eBay – $19.24 + $4.49 shipping = $23.73
(Competitor) Amazon’s price – $19.99 + $0 shipping = $19.99
Third item:
eBay auction number 150242840961
Buy’s price on eBay – $21.99 + $4.40 shipping = $26.39
(Competitor) TigerDirect.com price $22.99 + $3.99 shipping = $26.98
I find the information rather interesting.  Now, I am sure that I could have found these items significantly cheaper from other competitors but I wanted to stick with well-known internet mail-order companies who have a good reputation.      
Value and Selection.  Interesting choice of words by Lieberman.  When I typed those words into my search engine, do you know what came up?  What came up first for me was an article about Walmart dated April 2008 titled “Two Neighborhood Markets Bring Value and Selection to the Valley”.  I guess Meg Whitman was correct when she said that the customers found in the aisles of Walmart are the typical eBay buyer;  eBay stockholders and eBay management are not likely to be purchasing on eBay according to Meg.  I have to wonder if she was right.  But, unfortunately, I can’t validate her supposition because I really don’t know much about the Walmart customer; it has been more than 8 years since I have been through the front doors of a Walmart.

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2 Responses to “eBay’s Value and Selection makes it The Walmart of Online Auctions”

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submitted these thoughts to Ink but looks like they won’t go up either- so here it is

I just finished watching the Key Notes from Live and I am concerned about Lori’s discussion of eBay being determined to offer the best deals – best prices to be the most competitive once holiday’s hit. What concerns me is she wasn’t referring to eBay pricing – the fees they charge us- she was referring to our pricing.

It appears to me that eBay plans to be the most competitive among who they view as their competition, and they intend to do this off our backs. I feel as though they are pushing into a direction of forcing us to drive our prices through the floor so that they can claim to have the lowest prices on the net- but again by using our products and our money (or loss of) to do it.

Really we are expected to offer free shipping and now were are expected to bring our prices down all the while they stay (hopefully not raise) with the same fee schedule.

This is the problem they do not recognize their role in the dynamic of eBay relationships. eBay’s marketplace is a market within a larger market. Those of us who sell on eBay compete with fellow ebayers and with the outside eBay market. The market sets the price- if it is over priced it won’t sell that is how it works in a true competitive market.

Every one of us who do business on eBay understand that we need to be competitive or we will no longer be. The eBay market and increasingly the outside eBay market sets our prices. There is a wide range of pricing between sellers for the same item- I will guarantee you that in my category lowest price doesn’t win. The lowest price doesn’t give you the most competitive advantage.

The point is eBay needs to recognize that they are competing for our business- they are competing with other selling venues, which with these changes they have foolishly managed to strengthen these other selling venues and personal webstores. So to keep our business they need to make it beneficial to us. They fail to recognize this at all – they believe or act as though we are their pawns for their competition with other places like Amazon …. we are their products- the problem, clearly, is they have neither paid for us or produced us or our merchandise.

They recognize that eBay has to appeal to the public – be attractive so people will want to shop from us, however rather than doing what they are paid for (providing us with the best tools and services so we can be the best) they have distorted their role and now truly believe that we are their product that they are trying to clean up so more potential buyers will come to eBay and those that are already here will continue to come they have chosen the method of making things more difficult for us. They have enlisted a punitive structure in an attempt to whip us into line with their goal of competing with other venues. We are their products.

Cable, phone, cell phones, satellite… when these companies start to lose ground in their market they raise the benefit. More free channels,unlimited long distance, 5 dollars unlimited in texting. Price reduction along with additional service. This is a winning strategy and it is also how we continue to improve our available options- innovation. These companies don’t call me -their customer- and tell me to shape up or they are going to limit the amount of phone connections, take away network channels, or add fees. This just isn’t how it works in the real world- in a competition based free market.

I have heard that they are wanting to retain the current customer base (apparently that is us and our customers) yet I don’t see how these actions are going to achieve this goal. Do we all want more traffic on eBay sure, but before more buyers can come – apparently looking for things that currently are not available, they need to bring in sellers who have those things- you know offer a product at a good price that will benefit their potential customer. When that seller comes on because of the attractive offer they will get more traffic. Clearly, this was the intent with the Buy.com crap.

The other trick for them is to make sure they retain who they already have- you can’t do this by alienating your current customers. They have created a serious issue with their powerseller rewards, special pricing for buy and the eBaymotors crap. Why does any paying customer get a lesser service and/or lower pricing. Even worse the reality that they are providing a lesser service and charging higher rates to small sellers (no option for earning credits and no additional services) of course the buy issue – this is flat out rude, inconsiderate, and hurts them much more than it helps. Not only are they giving them decreased listing fees (possible FVFs) they are allowing them to flood several categories with identical merchandise already offered by sellers- real eBay sellers. And they are allowing Buy numerous policy violations most obvious and unacceptable is the insane number of sold items they didn’t have- this isn’t allowed on eBay. Sure we all have the occasional error, but 99% of us scramble to find that product to fulfill our end of the contract. Refunding their money weeks later and informing them the item isn’t available is not going to increase the perception of quality on eBay. Flooding the market causing more and more of our customers/potential with the bad experiences that occur at alarming frequency with buy- rather than let them purchase the same damn items already available from good sellers on eBay who will actually have it to sell- makes no sense.

I don’t treat my customers differently- someone can win an auction for a 1.99 and they get the same service and perks as a customer who just spent 200. The logical – smart- reasoning is I want them to come back- it may be 1.99 today but it might be 200 from them next time. If I don’t communicate, don’t ship as quickly, if charge added shipping, and decide to shove their item in a box with a piece of newspaper the likelihood of their returning is substantially decreased. That is stupid- I would be an idiot to run my business this way.

Okay – I need to sleep- good night

Forget about Ebay, I bought my Navigon 7200T from Amazon.

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