Thursday, February 21, 2008

The Ebay Miscalculation or the "Donahue effect"

The Ebay Miscalculation…. or the “Donahue effect”

Before going live with these changes, they should have lined up more big box accounts. C learly the new EBAY business model is:

We are Ebay. We are e-commerce, you don’t need to have your own website. We can be your e-commerce platform. In senior managements mind they want to be. for lack of better words. "The E-Commerce lifestyle mall" of the Internet.

They should have waited to roll out their changes until they were better organized but because Amazon beat them out in last qtr 07 they felt they had to do something. Their stock was dropping and they needed “something” to reverse the lack of confidence in the market.

They never imagined, based on the last boycott, that these changes would be a big thing. They calculated the loss of small accounts vs the staff they could cut to service them and said we can do this.

They forgot that sellers feel that Ebay belongs to them, if not financially at least emotionally. Many have built their livelihood on Ebay, Eay is part of our family and we care about it. They also forgot that many of us come from marketing, business, and “corporate backgrounds” and we can "spin" just as well as they can.

This is now ‘EBAY’ or “Greedbay” the big bad corporate gorilla vs. small mom and pops, single mother's and retirees. Despite their spin that this is 'noise", this boycott has achieved a huge amount of publicity and it is negative for Ebay. It is no longer that fun place, it’s a cold, uncaring corporation that has lost touch with how it became so successful.

They did not expect some of the power sellers to go, many more are doing their own store rollouts or moving en-mass to other sites.

They did not count the competitors (they weren’t really there at the last boycott). It looks "bad" in the public and stockholders minds, when there is statistical evidence that you are losing people (even if you wanted them gone anyway)

You have to wonder if GM and its dealers will ultimately want top hitch their success for EBAY whose "brand' if you will is severely tarnished, or will the other large e-retailers that Ebay wants to attract.

Their biggest mistake was in not spinning off the collectables side of the business into a new venue and selling it off. They would not have had any problem finding a buyer, but Ebay hates competition of any kind.

Oh and as the class action lawsuit becomes more public (it has been known about in financial circles since last year when it was filed). The public will further have a diminished view of the Ebay "Brand".

Ebay has spent millions of dollars on prime time advertising, including American Idol and these numbers still decline. Maybe their approach isn’t working, maybe they need a new voice, maybe they should hire “sock puppet” to be their new spokesman, we all remember what happened to Petco, they went under!

1 comment:

ZiggyZool said...

Thank you for a well thought out article on the exodus from eBay.

Although my husband and I were successful Trading Assistant's at the Silver Power Seller level at eBay, the many changes that have occurred there over the last several years had us searching for a fresh way to market our goods and buy the items we were searching for, we have tried many marketplaces as we searched for one that had the good-hearted feeling and functionality of 'old eBay.'

Now, we have finally found the grassroots marketplace we had been looking for: it's called Bonanzle. It's top goal is to make it easier to buy and sell stuff online than eBay or Craigslist. If you're looking to buy stuff, Bonanzle is like a street fair where you can talk to (or bargain with) the sellers in real time.

It's also totally free, unless your item sells which is nice, but even nicer is the fact that the final value fees are extremely reasonable. Sellers are given the freedom to decide on the manner in which they prefer to accept payment. Bonanzle is already integrated with Google Checkout as well as Paypal. Paper payments are not banned, and feedback is a two way street.

Bonanzle is growing by leaps and bounds since its' premier out of beta on September 1, 2008. We are so thrilled with the personalized support from founder Bill Harding, and his right-hand man Mark Dorsey, the friends we've made (both sellers and buyers)within it's community and, most importantly the actual sales we've made that we are now calling Bonanzle our permanent home and recommending everyone we encounter in online sales do the same. Bonanzle has a great mix of seasoned e-commerce sellers, new sellers, self represented artists, eBay refugees (buyers & sellers alike) that I feel comfortable in saying with wholehearted enthusiasm.. There IS something there for everyone... I urge anyone reading this post to check it out for yourself at you'll notice the difference the minute the homepage comes up.