The Big Sucking Sound – Amazon Siphoning eBay’s Good Sellers

Posted on November 24, 2008. Filed under: Amazon, eBay, eBayInkBlog | Tags: , , , |

Today, on eBayInkBlog, Richard posted an article titled “Q&A with Dinesh Lathi, eBay VP of Seller Experience” – click Here for the complete Q&A information. 

Reading the Q&A, I was again struck by how one-way the conversations are between eBay and its sellers.  Again, eBay talks “at” us and not “to” us, trying all the while to convince us of what they want us to believe. 

 

QUOTE from VP, Seller Experience: “What’s been said outside of eBay is that lower prices and free shipping are “what eBay wants”. The reality is that it doesn’t matter what eBay wants eBay.com is a marketplace and that means neither eBay nor our sellers get to set the price of goods sold on the site, buyers do. This is as true in auctions as it is in fixed price. Lower prices and free shipping are what buyers want.”

MY RESPONSE: If eBay does not want (expect) sellers to offer lower prices and free shipping then why are low prices and free shipping two very important factors in Best Match?  I would suppose eBay incorporates those two factors into Best Match and weighs them heavily because eBay believes that buyers want things “cheap”, as eBay has stated so many times before in so many ways.  Therein lies one of the major problems with eBay.  For so long, buyers were focused on getting things on eBay “cheap” and they were willing to buy from sellers who had horrible feedback in order to get a “cheap deal”.  When the cheap deal did not turn out well (ie item never arrived, item arrived SNAD), they wanted to blame someone for their poor decision-making.  While there may be a segment of the buying community who want things “cheap”, I think most buyers instead want value.  They want to pay a reasonable price for a good product with good service given by the company who provides the good(s) them.  They want their items to arrive in a reasonable time and they do not want them to be counterfeit or not as described.  And most people are willing to pay the appropriate amount because they know “you get what you pay for.” 

On eBay, I sell under 3 different eBay IDs and I sell in a variety of categories.  On Amazon, I am a new seller who has only one product line listed on Amazon right now.  However, this month, my sales on Amazon are significantly greater than all my eBay sales combined and if I compared the one Toys & Games category on eBay to the one Toys & Games category on Amazon, my sales on Amazon this month are more than 10 times that on eBay.  My prices on Amazon are higher than on eBay and my feedback numbers on Amazon are very small especially compared to the tens of thousands of feedback on my eBay IDs, yet buyers choose to purchase the product from me on Amazon rather than on eBay.  Buyers are paying significantly more to buy the product from me on Amazon so not all buyers want the lowest price and free shipping.  In fact, 10 times more of my buyers are choosing value over price.  If all buyers wanted only the lowest price, we would have nothing but Wal-mart stores in every town and every other retailer would be out of business. 

I think the statement made above was partially correct, but incomplete.  I think the statement should be “Lower prices and free shipping are what buyers want….. on eBay.”  The reason buyers on eBay want / expect lower prices is because they perceive the eBay marketplace is of lower quality than other more respected sites and given a choice they would prefer to shop at Amazon versus eBay, if the price were the same.  Therefore, the only want to induce sales on eBay is to offer such a significantly lower price that it makes it worthwhile for a buyer to purchase an item on eBay.

The eBay marketplace is still a good venue for multi-channel sellers because it does offer an opportunity for sellers to “force” sales, needed for cash flow, by lowering the price to a point where it will virtually guarantee a sale.  But sales does not equate to profitability.   And businesses must remain profitable or they will be able to offer nothing to potential buyers in the future, even on eBay. 

 

QUOTE from VP, Seller Experience:  “To help sellers stay competitive, we are offering more useful advice, such as last week’s webinar.”

MY RESPONSE: The eBay webinar last week focused on price again and again and again.  We saw how eBay is using Best Match to redistribute sales from higher-priced sellers to lower-priced sellers.  If buyers were purchasing from the “higher-priced” sellers before then why does eBay feel that it is an “inefficient” marketplace that needs to be tweaked?  Amazon certainly does not feel that offering an item at a higher price is necessarily “bad” for the marketplace as I own the Buy Box on several items that I do not offer the Lowest Price.

And I find it interesting that eBay is offering sellers “advice” on how to conduct their business and that advice consists mostly of “lower your price” and “offer free shipping.” 

In contrast, Amazon held a webinar for sellers last week and they had useful suggestions to sellers.  Instead of focusing greatly on price, they reminded sellers that they will see an increase in demand (and if this past week’s sales are an indicator of the increased demand to come, I couldn’t be happier) and that because many buyers are making their purchase this time of year on Amazon as a gift that they are more likely to be in contact than they would otherwise so expect an increase in customer service demands as well as product demand.  I have already noticed a significant increase in the number of Gift Messages on my orders and it is not even Thanksgiving yet.  But after the Amazon webinar, we changed a few things about how we process our Amazon orders which should give us an advantage in making sure we take care of gift givers even better now.  My point being is that Amazon is providing us with information and tools to take care of the customer, to offer them more value for their dollar rather than giving them less service for less money.

And during the Amazon webinar, the sellers were asked questions via polls.  And at the end of the Webinar, we were told that Amazon values us and looks forward to a great holiday season with us.  It was a very motivating webinar.  And not only was the webinar motivating, I enjoy reading the new Amazon Seller Blog which is also motivating as well as informative.  Compare the Amazon seller blog to eBay’s workshops and there can be no real comparison.

FINAL COMMENT: While I appreciate eBay opening up the Webinar at the last minute (Thanks to Scot Wingo) to non-Titanium Powersellers and I certainly appreciate Richard’s efforts to bring us some news, all of the bluster about how great a venue eBay is and how new and existing sellers alike can find a great partner in eBay does not change reality. 

The reality is … for years, Amazon has been siphoning off eBay’s good buyers.  And, now, Amazon is taking very active steps to siphon off eBay’s good sellers of all sizes.  As a multichannel seller, I will say this about Amazon…. You had me at Hello.

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4 Responses to “The Big Sucking Sound – Amazon Siphoning eBay’s Good Sellers”

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Give me a nudge when Amazon becomes a viable for selling collectibles. I want their buyers money, but I haven’t found success with my main line of inventory. Media flies off the shelf though, yes.

Thanks,Cliff

I second Cliff’s request. Antiques and collectibles online seem a little lost now. The other sites, which include the other online auctions/shops and the specialist antique sites, may be growing but are still small fry compared to eBay and Amazon. I would love to open on Amazon but my stuff has no UPC codes.

Ah, Brews, you’ve done it again. Superb post. I just wish selling on Amazon was available in Australia for Australian sellers. It might come here soon, eBay is making such a mess of things, the market is definitely ready for Az in Oz.

Richard Brewer Hay (a blogger paid by ebay) interviews another ebay employee, Dinesh Lathi.

Lo and behold..that Q&A interview was nothing more than another ebay commercial with (again) nothing more than “ebay spin”.

If you want REAL information, read what ebayers have written here:

http://www.petitiononline.com/mod_perl/signed.cgi?jdonohoe


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