How small sellers can compete against eBay Diamond Powersellers Daily Deals and Fashion Deals

Posted on July 10, 2009. Filed under: eBay | Tags: , , , , , , , , , , , , |

This week there has been a great deal of discussion about the new Fashion Deals logo that is appearing on the eBay website just to the right of the Daily Deals button.

fashiondeals

It is reasonable to expect eBay’s non-diamond sellers to be very upset about eBay bringing very large sellers onboard and giving those large diamond sellers unique advantages such as prominent exposure and lower pricing.  After all, the small sellers made eBay what it is today and eBay’s actions of favoring these new Diamond sellers over smaller sellers who have been the backbone of eBay since inception is not something that small sellers embrace as being good for the eBay marketplace.  However, this blog article is not about debating eBay’s choice to actively seek out and court Diamond Powersellers to the detriment of eBay’s smaller sellers but rather the focus is how small sellers can survive in the “new eBay”. 

Anyone utilizing eBay to liquidate stale inventory is probably going to thrive.  Selling at a loss is easy.  But, of course, liquidating stale inventory on eBay has to be just one part of a successful business’ overall plan which means that companies who liquidate inventory on eBay must have other venues, like Amazon or their own website, where they are selling profitably. 

Non-diamond eBay sellers who do not have a large inventory and/or  sell on multiple venues need to have a different strategy.  Small sellers who utilize eBay as their main or only venue need to make a profit on eBay and, thus, it is the niche marketers who can and will survive in the new eBay.  According to Wikipedia, a niche market is defined as:

“the subset of the market on which a specific product is focusing on; Therefore the market niche defines the specific product features aimed at satisfying specific market needs, as well as the price range, production quality and the demographics that is intended to impact.”

You can see plenty of examples of niche marketing in the offline markets.  Take for example Dublin Dr Pepper.  Dublin is the oldest Dr. Pepper bottler in the world but, more importantly, it is has the distinction of bottling Dr Pepper with Imperial Pure Cane Sugar, the original Dr Pepper formula.  If you have never had a soda made with real sugar then you don’t know what you are missing!

I recently visited the Dublin Dr Pepper bottling plant and was completely amazed.  Below is a picture of a bottling employee manually checking the color of the Dr Pepper as it came off the assembly line.  He puts the bottles in a “light box” to perform his test.

DRpepper8 

While at Dublin bottling plant, I purchased 6-packs of bottles for $3 each.  However, just 90 miles away these same 6-packs of bottles are sold for $7 each versus the Coca-cola bottles of the same size, made with corn syrup though, which are sold for $4 a six pack right beside the Dublin Dr Pepper bottles.  Would I pay $7 for the Dublin Dr Pepper six pack?  You betcha!  And there are other soda niche marketers, such as Hanks Beverages company that produces root beer made with cane sugar,  that survive and compete quite nicely against the big boy cola manufacturers.

On the subject of niche marketing, I found a very interesting quote from a book I am currently reading (and that I highly recommend reading).  The book is titled “adventures in entrepreneurship BREWING UP A BUSINESS from the founder of dogfish head craft brewery”.  In his book, Sam Calagione, says the following about the small business advantage:

“As in martial arts, you can gain an advantage over a larger opponent by using his own strength against him.  The big companies are not nimble enough to maintain and create new niches.  From where they sit, way up high on the business ladder, they cannot see the low-hanging fruit.  And even if they could, it wouldn’t be worth their time to bend over to pick it off.  When you are small you can see the low-hanging fruit that big competitors don’t care about.  At least they don’t care until a smaller competitor proves there is a growing and viable market for it.  Once there is enough low-hanging fruit to make a small company grow bigger, the big companies become hungry for that fruit, too.”

And this is playing out in the soda pop market as well.  Just last month, Pepsi released a product for a limited time called Pepsi Throwback that was sweetened with natural sugar and put in retro-looking package.  Could we soon be seeing Pepsi and/or Coca-cola release soda made with real sugar?  If there is enough market demand for the product, you bet these soda manufacturers will produce and distribute sodas made with real sugar.

So, what are the takeaways for small eBay sellers who want to survive and thrive on eBay?  First, you’ll have to ignore the unfairness and unlevel playing field that is now part of the new eBay since it is a factor that you can’t influence or change.  Next, decide exactly where you can fit into the new eBay.  While there are certainly going to be exceptions to the rule, primarily you either need to use eBay to liquidate stale inventory, which means you have to have a profitable venue outside of eBay, or you have to find your niche on eBay if you want and need to be profitable selling on eBay.   And, lastly, always stay nimble because the niche you find or establish today could become part of the mainstream market tomorrow.

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4 Responses to “How small sellers can compete against eBay Diamond Powersellers Daily Deals and Fashion Deals”

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It is so nice to have you back.

This is fascinating not only for the glimpse into the world of gourmet soda pop but the spotlight on adapting that insight to your own business.

Not quite OT:

I grew up with Coke made with sugar, but it was not a daily thing, a treat once every month or so when we made the trip to ‘town’. That was pre- high fructose corn syrup.

In most of Europe HFCS is banned because of concerns about the human body’s ability to metabolize it, studies that show a possible link to morbid obesity in childhood & Fatty Liver Syndrome.

You are correct, the taste is unbelievably different and oh so good.

How did the big pop companies change something so thoroughly without our noticing?

The answer may be very quietly and little by little. Why would they do such a thing?

One word “Profit”.
How can you avoid High Fructose Corn Syrup? In the USA it is challenging, if you read labels you may be surprised at what products contain the stuff.

Henrietta, thanks for saying so! I have enjoyed the “time off” from blogging and now I am energized again and I’ll be pumping it out.

Yep, the big pop manufacturers changed to corn syrup at the same time they went from glass bottles to cans so that the public wouldn’t notice as much and would think the taste difference was due to the difference in “packaging”.

It is fascinating to read about the Cola wars. What interested me most was how the independent bottlers built the Coca-Cola company by the sweat of their brow only to ultimately end up being taken advantage of and losing out in the end (it mirrors the rise of eBay in oh so many ways).

The tour of the Dublin Dr Pepper bottling plant was fascinating. However, it was the most delicious-tasting Dr Pepper cheesecake at the small local restaurant, though, that was the ultimate highlight of the day for me.

Thanks, Henrietta, for stopping by my blog and for the great comment.

Kosher Coke still has sugar in it… the ‘corn’ in corn syrup being a no-no. You can spot it in the 2-liter bottles that have YELLOW caps.

It always pops up in the supermarkets toward Passover, albeit in limited quantities.

If you see it, hoard it! It’ll take you back to the days of birthday parties, sugar highs, and soda fits. Hide the breakables!

[…] For example, I wrote a recent blog post about my trip to the Dublin Dr Pepper bottling plant (click HERE to read that blog post) where I was able to purchase Dr Pepper made with real Imperial sugar […]


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