Buy.com Gets $3-$4 MILLION Listing Subsidy From eBay Over The Past 90-Days

Posted on May 16, 2008. Filed under: eBay | Tags: , , , , , |

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This post was written by eBay’s Entrepreneur of the Year ( 2002 )
Posted here on TheBrewsNews with permission
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Buy.com “BUY” now has over 424,000 active listings on eBay right now. Over the past 90 days or so they have listed over 110 MILLION items in over 1 MILLION individual listings. Almost all of which were 1 or 3 day Fixed Price Multi-Item CORE listings. Listings that would have cost every other seller on the marketplace between $3,000,000.00 to $4,000,000.00 to run in CORE. An amount far less than even Buy.com’s total sales in this period were.

So unless Buy.com is in the business of spending more money on eBay listings than it generates in total sales, Buy.com is listing TENS OF MILLIONS of items in eBay CORE each month for basically FREE. A “Special Deal” no other seller gets and a distinct marketing advantage over ALL other sellers. The facts and figures DO NOT LIE, at most, Buy.com is paying a penny or two per item listed while the rest of us pay dollars per item to list in CORE.

787 of Buy.com’s active listings compete directly with me in one single category, External Hard Drives. My hundred or so active listings in this category that I spend thousands of dollars a month to list up against 787 FREE or nearly FREE active listings from an internet retailer handpicked by eBay to drive me out of business. Buy.com gets to save over $30,000.00 a month in listing fees to keep just these 787 items running in the category. Because of FREE listings in the CORE search from Buy.com my sales in the category have dropped and Buy.com’s have increased. How am I supposed to compete with a $30,000.00 monthly listing subsidy from eBay to Buy.com?

Let Buy.com compete with me fairly head to head and pay for their listings as I have to. Or eBay, let me list in core for a penny or two per item. Either way works for me, but in a category like this where margins are razor thin, don’t give my competitor a $30,000 a month subsidy so they can run nearly FREE listings at any outrageous volume they want to smother my listings. In fact in the subcategory Buy.com lists in there are only 2179 active listings so their 787 listing represent about 36% of the offerings. It looks a lot like an overwhelmingly disproportionate share of the market for a single seller to have. What about the “Finding Experience” when buyers only have one major seller taking up so much of the category?

EBay, I implore you, make the terms of your “Secret Back Room Deal” with Buy.com public. Rebalance the playing field so Buy.com does not keep sucking business away from 99.9% FB sellers like myself because of their unfair advantage. This is not the type of “Reward” a long time Top Seller like myself deserves.

Thanks,

Doctor-Deals
http://stores.ebay.com/Doctor-Deals-USB-Hard-Drives-Plus

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4 Responses to “Buy.com Gets $3-$4 MILLION Listing Subsidy From eBay Over The Past 90-Days”

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That is complete bull that eBay would do that to you, I really hope that eBay gets sued for doing this to a lot of people and they need to change there ways, considering I wanted to be on eBay when I got older, then hearing this happen from my mother sickens me (she ‘USED’ to sell on eBay), it really makes me wonder if there doing it for attention or whatever they “try” to accomplish, I am very sorry once again to hear that eBay has done that to you, they just need to learn from mistakes and try not to earn us back, if we want to return we will, but it’s as if they are forcing us to return, don’t give into there bull! Well Good Luck, Best wishes.

-Heather [17] from OR [Oregon]

I figured the new policies were the attempt by that elitist Donohoe to drive out the great unwashed. Well, now it looks like the guy is just a nut. I guess a Dartmouth education ain’t what it used to be! His name ought to appear next to the definition of “corporate pinhead” in any dictionary.

I am currently hosting my last auction on eBay. Very sad day for my husband and me. We started back in ’99 and had a lot fun. I did find a new place, eBid, and it looks like a good place. I’m testing it to see how it goes.

I’m one of the little guys, but I sure feel your pain.

[…] however, the buying public has come to expect too much.  Online giants like Buy.com have joined the ranks, and sooner or later, Ebay will become just another website that helps you […]

Here, try these numbers:
Seller: Buy
Listing Dates: March 2, 2008-May 31, 2008
Total Items Listed: 2,708,987
Total sales: $3,924,907
Successful listings: 64,638
Total Items Offered: 249,431,285
Sell through rate: 2.39%
Average Sale: $44.43
Minimum fee, including dutch auctions: $24,943,128.5 (Minimum fee is based on the lowest possible listing rate of ten cents per item; does not include any other listing fees, or, Final Value Fees).
Source: terapeak

As pointed out in the original article, and demonstrated here, these are way under-estimated fees. You can add an extra $185,500 for estimated average FVFs, pushing the way under estimated fees to well over $25 million fhey SHOULD have paid.
We want to know, ebay, Whats going on here?
We deserve to know, your investors deserve to know.
Tim
http://forums.delphiforums.com/boycottebay/start
http://myspace.com/boycottebay


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