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Thursday, August 17, 2006

Chapter One Hundred Thirty-Eight, in which Booksellers are squeezed

eBay was one of the pioneers in establishing the internet as a healthy marketplace for goods. They began with auctions of a fixed duration. When success brought clout, they expanded to include store listings of infinite duration. Now they have changed their fee policies, which might seem only to affect sellers. However, how can this not affect buyers?

If you haven't heard about this, it may be because eBay did not release this change as a press release. Instead, sellers received this notice directly. You can read the entire announcement here. We are also happy to bring you some highlights, as follows:

The announcement opens stating
in the interest of the eBay marketplace's long-term vitality - we've had to step in and implement new policies, introduce new formats, or make changes to our fee structure to create needed incentives for eBay members
As we read further, we begin to suspect certain key phrases were deleted from this opening: that the major concern is not the vitality of the marketplace, but the vitality of the company; and that the incentives are for eBay members to refrain from dilution of the company stock price.

What does an eBay shopper expect from the website? A vital marketplace, probably. We once went there to find auctions on things not available elsewhere; now we believe many people go there expecting to find everything and anything for sale. The announcement claims
we're improving the advantages of selling in core listing formats -- and taking action to manage the proportion of Store Inventory listings - to ensure that the buying experience on eBay stays true to shoppers' expectations.
The changes obviously encourage auction-style listings over store inventory listings. Unfortunately, auction-style listings, unless there is some prior advertisement, are generally not advantageous to the book seller. It is rare that those who are interested in a certain title, or any merchandise, will all visit eBay within the same seven-day period to bid. Does eBay have some sort of email alert system, so if we are looking for a DeVity painting, we will receive an email to tell us when one goes up for auction? We don't know, but that would certainly drive more people to bid. A permanent store listing reaches many more buyers. Is a preponderance of auction-style listings really true to shoppers' expectations these days? We thought eBay had grown itself to be more than that, beyond a mere auction site.
And for sellers, these changes will ensure that eBay remains a differentiated and distinct e-commerce channel with fast inventory turnover.
Sounding as if they intend to focus primarily on auctions, and giving up the complete marketplace concept to Amazon or other would-be players. Amazon is no longer just books. Amazon has stores with listings from individual sellers. If one wants to bid, go to eBay; but why go to eBay to shop when Amazon will have the most to offer? Also, as most booksellers know, books typically do not have a fast turnover. It is not uncommon for books to sit on shelves for years before being found by the right book-fancier.

What, then, is the cost to the book seller on eBay?
A typical eBay Stores seller who uses Store Inventory format - making no adjustments to his or her selling strategy following these changes - will experience an overall fee increase of less than six percent.
They must be using that new math we've heard so much about to calculate these figures. When we look at our inventory and sales, the overall fee increases come to about 215%. This typical seller will continue to use the same selling strategy following these changes, until it can be shown that selling there costs us more than we earn. eBay still remains another selling venue that some people prefer over the rest, and we sell books there that have not sold for years at other sites. However, from feedback we have heard, many sellers will be pulling some of their inventory away from eBay. For us, the decreased competition may be a good thing. For buyers, the decreased offerings will likely be a bad thing--and this may drive buyers away from eBay, ultimately making the decreased competition a bad thing for us.

Maybe we are misunderstanding the changes, simply fearful of something new or unhappy at the prospect of a diminished profit margin. We want to see this impartially, objectively. What do you, the shopper, expect from eBay? As they say in the opening of the announcement, the marketplace will decide the outcome.

1 comment:

  1. That really sucks...as an ebay buyer I much prefer the store options, especially where books are concerned. I never like to bid until the very end on an auction and quite frankly after 7 days I just forget. I much prefer to shop, find something, and buy it on the spot.