AuctionBytes Blog
News and insight focusing on ecommerce and the online auction industry
by Ina Steiner, Editor of AuctionBytes.com
June 30, 2009
Zappos Abandons Test of eBay Retail Channel
By: Ina Steiner
Tue June 30 2009 20:46:15
Zappos said it is not actively selling on eBay and has no plans to, despite being showcased by an eBay executive at the recent conference as we reported on this blog on June 17th.
eBay Senior Vice President Stephanie Tilenius said during a presentation at the recent Internet Retailer Conference, "This is an example here of Zappos, their new liquidation brand called Great Price store, and they just launched on eBay last week using our Large merchant Services platform."
Internet Retailer magazine had also reported the news: "In the presentation by Tilenius on eBay's strategy of working with major retailers, she pointed to online retailer Zapppos.com (sic), No. 27 in the Internet Retailer Top 500 Guide, which last week launched an eBay store to liquidate overstock goods, and clothing manufacturer BCBG, which is now selling on eBay through an unnamed large eBay merchant."
I checked in with the online retailer, and Steve Hill, Vice President of Merchandising at Zappos, said, "We did a small test on eBay but are not currently planning on moving forward with it." In response to a follow-up request for Zappos' User ID, a spokesperson said, "This was a very small test. At this time, Zappos is not moving forward and the account is not active."
We asked eBay about the discrepancy and whether Tilenius had misspoken. eBay spokesperson John Pluhowski said, "We are always looking to partner with top quality merchants and frequently test various distribution arrangements through our site."
eBay began making it easier for buyers to see when their items were shipped, but there may be a lag in the time it takes eBay to update tracking information. The policy was created in part to help sellers achieve higher DSR feedback ratings from buyers who would be more informed about the status of their shipments. But any delays on eBay's part in updating tracking information could actually make sellers look bad in the eyes of their customers.
That's what happened according to a seller on the eBay Technical Issues discussion board. " I just got an angry message from a buyer stating: "HAS THIS COIN BEEN SHIPPED YET? TRACKING # IS NOT SAYING SO." Indeed, when I go to eBay's link it states I gave electronic notification I was thinking of sending a package but nothing else. Meanwhile USPS says its gone all the way from NJ to MO and will probably be delivered tomorrow."
Another person reported they were unable to add tracking information via eBay's Selling Manager Pro listing software.
Providing tracking information to buyers seems like a good idea, but if the information is not updated in a timely manner, it could spell disaster for buyer-seller relations.
The ecommerce conference season is just about over, and I thought it might be interesting to recap the conferences where people spent their time and money in lieu of attending the cancelled 2009 eBay Live. Observing where money is spent in a recession is always more revealing than in a thriving economy, since people tend to eliminate extraneous expenses and retain those that are most important.
There were a few conferences and gatherings of note, ChannelAdvisor Catalyst, PeSA/ECMTA, IMA, eBay DevCon, eBay Radio (fake eBay Live) and Internet Retailer (IRCE). One trend that can't be ignored is that eBay-centric conferences are struggling to draw a crowd. Reports we received from attendees at the first 5 events, was that the audience was very light, not more than 2-300 people at any of the events. Some conferences "capped" their attendance at a number that was half of previous years.
A large percentage of attendees were vendors, scoping out the conferences for potential clients. We asked some vendors who attended these events, and each responded that they were "disappointed" with attendance. One vendor rep, when asked if they would be at IRCE in Boston, responded "No, it will be a ghost-town." Guess what - 5,000 people showed up at the conference - attendees and vendors - just barely down from last year's attendance.
Here are a few revealing comments from some vendors and attendees to various conferences we spoke with:
People are not as interested in attending eBay-centric conferences, and seeing the same 200-300 faces every year.
Vendors are not as willing to spend shrinking advertising budgets on small conferences, just to see the usual suspects. While it's important to have face-time with customers, they're at these conferences primarily to sign up new clients.
Most importantly, online retailers are branching out, trying to find ways to make THEIR brands stronger, and explore suitable sales channels other than eBay.
Attendance at eBay Live conferences has declined since it peaked in 2006 when nearly 15,000 people congregated. By 2008, eBay Live drew barely one-third the audience of 2006, while a broader ecommerce conference such as IRCE has held steady or gained traction in the same time-frame.
We make choices every year about which events to attend. AuctionBytes likely would have been at eBay's developer conference as well as IRCE if the two had not been scheduled at the same time. Given the choice, we felt it was more important to be at a conference that offered a broader scope of the ecommerce landscape.
So which conference did you spend your money with this year - or did you? Which conference was the "Do Not Miss" event? And why, or why not, of course.
In March, Etsy officially launched the Etsy Developer Community and API. It's well known that third-party developers can help marketplace sellers be more efficient and market their wares, and they can also develop buyer tools to help shoppers find and purchase items. However, they need a revenue model to make it worth their time and effort.
I noticed some web developers discussing the business model for developing tools on the Etsy platform. One developer wrote that after the release of the API, "I was expecting an explosion of etsy related applications/widgets but given the rather quietness of the forums it seems that developers have a problem to find a real business model around services/apps that would bring real added value to etsy users." And, he suggested an affiliate program. (Spokesperson Adam Brown said this week that Etsy does not have plans to offer an affiliate program at the moment.)
Given that Etsy is a marketplace for unique items, sellers are unlikely to need the kind of bulk listing tools so popular with eBay sellers. Shopping tools would likely be more welcome by Etsy itself, since getting traffic and sales are usually bigger challenges for marketplaces than attracting sellers, and sure enough, the announcement about the launch of its API had referred to shopping-related activities:
"The Etsy API will allow developers access to the code for actions one can do on the Etsy website, such as searching product listings and viewing members' favorite ("hearted") items."
Third-party developers who have created eBay shopping tools (including GetItNext.com and WatchedItem.com) relied on eBay's affiliate program as their revenue model. (While sellers will pay for tools to help them be more efficient, buyers are unlikely to pay for shopping tools!)
Having an API and an affiliate program may be the missing ingredient to marketplaces competing with eBay. However, it does raise another "chicken-and-egg" dilemma for these sites. Unless they are well funded, they will have to pay affiliates with revenue from seller fees. And until marketplaces can prove the sales are there, sellers are unlikely to want to pay higher fees to the marketplace to fund affiliate programs.
Oh, and one more problem: this is a challenging time for companies running affiliate programs as states in the U.S. look to collect tax revenue from companies with affiliates in their states, a trend kicked off by the state of New York.
Manufacturers Pressure Retailers over Online Sales
By: Ina Steiner
Wed June 24 2009 024:43:56
eBay UK issued a report stating some manufacturers are deploying an array of aggressive tactics to prevent their products being sold online, and that many small sellers have no choice but to comply for fear their supplies would be cut off.
A survey of 458 online retailers participating in eBay UK's summer Online Business Index revealed that half of them have experienced pressure from suppliers trying to restrict the sale of their goods online. Retailers say they have experienced the following techniques used by suppliers to restrict online sales:
45% of respondents said they were prevented from discounting goods;
32% said they had experience display restrictions;
and 49% said they were outright banned from selling online.
The accompanying chart shows where online businesses get their supplies, according to eBay data published in its Summer Online Business Index.
The same issue came up at eBay's community conference 2 years ago when sellers said manufacturers were making policies that barred eBay as a sales channel for their distributors because it has a "damaged brand image." The problem cost one eBay PowerSeller $300,000/month in sales, he reported.
And there's the Leegin case in which the Supreme Court ruled that in some cases, manufacturers have the right to force retailers to minimum retail prices (price floors).
The UK report comes as Alice.com, a marketplace that cuts retailers out of the online selling equation, launches in the U.S., and as retailers increasingly face regulation and tax issues. Online retailers have never faced so many challenges as they do today.
The eBay Developer Program blogged extensively during last week's Developers Conference. You can read the highlights on AuctionBytes Newsflash, and read eBay's full coverage on its Developer Program blog.
There was some interesting news about forthcoming changes that affect sellers. One change that will likely be welcomed is the ability for sellers to exclude countries they don't ship to on a granular level and to block buyers whose primary shipping or registered location is excluded.
In the fall, eBay will have buyer-seller communications go through the email messaging system: "all pre-sale member messages intermediated through eBay for safety." Last year, eBay had announced it would impose "Safer member-to-member email via anonymous email forwarding," and then went back and forth about its No Links policy. It sounds like next month we'll hear more on this topic.
eBay also plans to give Diamond PowerSellers who use the Large Merchant Services API information about Best Match factors that sellers can control to improve search ranking of their listings. What isn't clear is whether LMS merchants are getting the same data currently available to all sellers, or greater information that would further boost their ability to show up higher in eBay search results above smaller sellers.
eBay will also be letting these large sellers list in the auction format - currently, LMS supports fixed price listings only. (See more on this here.)
eBay was promoting its Selling Manager Applications "open platform" concept to developers. I expect we'll see developers eager to try it, as eBay promises them exposure to sellers. (One of developers' challenges has always been how to cost-effectively reach eBay users.) I'd also expect to see more Product Pages on eBay, as it was promoting the concept of catalog.
Next month, eBay will officially announce the changes that will roll out in the September release as part of its promise to give sellers 60 days notice before making major changes.
Zappos launched an outlet store on eBay last week called Great Price Store. eBay's Stephane Tilenius, who was speaking at the Internet Retailer conference on Wednesday morning, told attendees that Zappos launched its liquidation brand using its new Large Merchant Services API.
I can't find the Zappos store on eBay, and a call to Zappos 800 number resulted in an emphatic denial that Zappos was on eBay, but the customer service representative pointed to their sister site, 6pm.com.
Tilenius also revealed that Mercent won an eBay Star Developer Award (the Developers conference is taking place this week in San Jose). Mercent launched SmartBargains.com and Altrec on eBay, and recently launched MyJewelryBox.com as well, using the LMS API.
Tilenius said eBay wants to partner with large retailers and launched into a pitch of how eBay is different today.
eBay is testing "flash sales," which appears to be similar to its Daily Deals feature but on a category basis. eBay is testing it in the Clothes, Shoes & Accessories (CSA) category in which it offers limited-time offers on certain products. eBay is experimenting in the CSA category and will then expand the program to other categories.
Tilenius showed a video of an advertisement geared to holiday shoppers, but did not say if the company would resume television advertising in the fall.
She talked about "trust" on eBay and said, "We're looking at rolling out a program this fall where we will enable the best sellers, so those with almost no low DSRs scores of one and two, to differentiate themselves even further." But she revealed no further details.
Edited 6/17/09 to clarify that I spoke to a Zappos customer-service rep, not a spokesperson.
Zappos said it is not actively selling on eBay and has no plans to, despite being showcased by an eBay executive at the recent conference as we 
eBay began making it easier for buyers to 
The ecommerce conference season is just about over, and I thought it might be interesting to recap the conferences where people spent their time and money in lieu of attending the cancelled 2009 eBay Live. Observing where money is spent in a recession is always more revealing than in a thriving economy, since people tend to eliminate extraneous expenses and retain those that are most important.
In March, Etsy officially launched the Etsy Developer Community and API. It's well known that third-party developers can help marketplace sellers be more efficient and market their wares, and they can also develop buyer tools to help shoppers find and purchase items. However, they need a revenue model to make it worth their time and effort. 
The eBay Developer Program blogged extensively during last week's Developers Conference. You can 
Zappos launched an outlet store on eBay last week called Great Price Store. eBay's Stephane Tilenius, who was speaking at the Internet Retailer conference on Wednesday morning, told attendees that Zappos launched its liquidation brand using its new Large Merchant Services API.
