eBay Auctions Doomed According to BusinessWeek

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AuctionBytes Blog
News and insight focusing on
ecommerce and the online auction industry
by Ina Steiner, Editor of AuctionBytes.com

June 03, 2008

eBay Auctions Doomed According to BusinessWeek

By: Ina Steiner

Tue June 3 2008 22:18:13

Oh, the horror! A BusinessWeek article published on Tuesday predicts a gloomy future for the online auction format, and the article received a lot of attention on Tuesday from around the Web. Author Catherine Holahan wrote, "As the business of buying and selling over the Internet has matured, the thrill and novelty of auctions have given way to the convenience of one-click purchases."

Holahan uses Bruce Hershenson of eMoviePoster.com as an example of the changing landscape on eBay. "For almost a decade, Hershenson's business epitomized the e-commerce that made eBay famous. He sold rare, collectible, sometimes kitschy memorabilia in online auctions that had a starting bid of 99¢." But Hershenson has now left eBay and sells on his own website. (In February, Bruce outlined his thoughts about eBay and why he was leaving.)

But which is the cause of auction's demise, a lack of demand from shoppers, or eBay policy and fee changes, both cited in the article?

Comments (34) | Permalink

Readers Comments

eBay Auctions Doomed According to BusinessWeek

by: tj

Tue Jun 3 22:41:47 2008

Business Week Only 3 years late with this story !!!

I have been reading about the dude selling posters leaving eBay for the past Year...Just do it instead of promoting your business..eBay don't care if you stay or Go//Just as I don't

eBay Auctions Doomed According to BusinessWeek

by: katherine

Tue Jun 3 22:45:28 2008

Business Week is right. People are no longer thrilled with auction format. That doesn't necessarily mean they're not still thrilled with used goods and bargains. They just don't care about the auction part. I always wish eBay would combine the interesting and unique products on its site with the ease of buying and selling on a site like Amazon. eBay could use "static" listings that sellers could update with their own merchandise, and buyers could pay with one-click. Why, why won't they change? I've switched over to etsy, myself.

eBay Auctions Doomed According to BusinessWeek

by: pjc0

Tue Jun 3 23:28:09 2008

EBay is floundering and Amazon has locked itself into a sub-mediocre user interface, search technology, and merchant model.
I'd love to see Google blow them both away.

eBay Auctions Doomed According to BusinessWeek

by: Synonymous

Tue Jun 3 23:37:44 2008

I've done only a handful of auctions over the past few years, compared to about $1000/month sales of Store and Fixed Price on average. The items go for less on auctions that they would have on fixed-price listings; as a buyer, it's a hassle having to set an appointment to close the deal on an item, and sniping is such an annoyance. No wonder buyers are willing to pay more for the convenience of an insta-deal.

eBay Auctions Doomed According to BusinessWeek

by: Ruth

Wed Jun 4 00:05:00 2008

Ebay killed auctions because they did nothing to stop rampant shill bidding. They actually encourage it by allowing private auctions and hiding the ID's of all bidders now. I also think all the last second sniping has killed the fun of auctions as well. No one bothers to bid on items until the last two minutes now because of sniping. Why bother bidding earlier, when some weasel will come along and bid with three seconds left in the auction with an automated sniping program? Sure kills the fun and excitement of auctions, IMO.

eBay Auctions Doomed According to BusinessWeek

by: Ruth

Wed Jun 4 00:18:10 2008

Let me also state that eBay is TRYING to kill the auction format. They want fixed price listings for faster turnover and immediate payment with their precious Paypal. They think they'll make more money that way, but they won't. Slapping 500,000 fixed price listings from Buy.com will just clog up eBay with even more junk. It won't make them any more money or draw in new buyers. EBay has forsaken quality for quantity on their site and that will be the death of eBay.

eBay Auctions Doomed According to BusinessWeek

by: Monster

Wed Jun 4 02:04:17 2008

One day, hopefully soon, eBay will be discovered to be one of the most evil, conniving, smarmy corporations that has ever existed… They have billions at their disposal, and it is being used to bamboozle, deceive and hoodwink small and mid-level Sellers until they are no longer needed… They want to end Auctions… But not just yet…

Getting rid of User IDs (SMI) when there are multiple Bids is eBay’s way of taking away a Users/Bidders ability to form a “Bidding” strategy… As well as the feeling that you were bidding against an actual “someone”… Now it is just random letters and asterisks… This was one of the key elements in auctions being successful…

You can’t see the current Auctions a User is Bidding on, so now you can’t “follow them” to find the best items to Bid on, which oftentimes also led to some of the Best Sellers… Let Users find ALL Auction Listing by themselves… Even if it means lower Final Bids…

They took away the ability to see a Seller’s Completed Auctions in a Text List that could be sorted… Perhaps this was done to slow down the ability to do Research on Ended Auctions for who knows what reason… Something to do with making things too easy for Users I would bet… If there is a Feature that makes using eBay easier, you can be sure they will get rid of it…

The changes above are just the tip of the iceberg compared to the changes that eBay makes “behind the scenes”… The changes above don’t get as much notice as the more obvious PayPal Hold/Best Match/Feedback Changes, but they are just a handful of the many, many damaging changes eBay has made in what appears to be their efforts to end Auctions altogether…

So now we have No Negative Feedback for Buyers which is setting Users up for eBay to get rid of the Positive/Neutral/Negative Feedback System in favor of the ANONYMOUS DSR Star Rating System… Then we can all just become Nameless Buyers buying Fixed Price Store Items…

They are doing everything they can to destroy the “community” in favor of a more sterile, Fixed Price/Buy It Now/Drop-Ship/Chinese/Wal-Mart/Amazon sort of vibe… They want New Items with a Fixed Price & Free Shipping… They are waiting for the next generation of Buyers to take up the slack left from all of the Buyers who have left because they can’t find the great, unique, special items there that once made people so happy… It was winning Auctions that made people happy…

Six years ago, I could easily make $1000 dollars a week on Auctions… Now, if I stay focused, I might eke out $1000 in 6 weeks… But in the last two years, I haven’t had more than 200 Auctions total anyways… I still prefer to sell items people “want”, instead of items they “need”… I was always about making Buyers happy…

Many good people in the mid-to-upper-levels of eBay management have left their positions, only to slink off without a word to anyone… Taking all of their “secrets” with them… Hoping they can find a position elsewhere without having to mention their last place of employment… Or why they left…

eBay Auctions Doomed According to BusinessWeek

by: Kevin_T

Wed Jun 4 02:19:42 2008

In spite of the claims that auctions are dead in articles and on message boards for about the last eight years, I still get consistantly good competitive bidding (including bidding wars) and clearance rates in about the 72% to 76% per month on Ebay. Auction is not retail, and it is not the way to sell new retail goods, but if you can read the market, understand how it works and how external pressures, such as recession, will affect it, it is still possible to get strong results using the auction system on Ebay.

If the same item is being offered by fifty sellers at any given time, auction will not give any advantage (and the ludicrous idea of starting items at 99 cents will only allow the market to trim it below the cheapest item currently available), but if it is not common, or is unique and then on Ebay it can be poor condition or poor quality, it stands the chance of attracting competition and acheiving high prices.

Always figure that on any given week an item may receive one bid - and on that basis never list an item below the price that you are "content" receiving.

Auctions are still healthy and lucrative on Ebay, but I do not yet know how the coming changes to the "multiple listing policy" and limits on search results are going to affect the collectibles market. THAT may have an adverse affect as different buyers who search in different ways, may see different stock - and while they may bid on what they see, they may no longer compete. Fragmenting the auction market WILL reduce competition and may have a serious impact on auction prices.

Kind Regards, Kevin

eBay Auctions Doomed According to BusinessWeek

by: Bill

Wed Jun 4 02:51:23 2008

Auctions for used items and collectables on eBay are the best way to go when you want to get rid of something.

I love it when sellers try to sell new items at auction. I have been filling my inventory in our store and on our web sites with those items for years. I always assume that these are close outs so keep them coming so we can make some more money.

Bill

eBay Auctions Doomed According to BusinessWeek

by: HealthyJerky4U

Wed Jun 4 03:45:02 2008

Have you seen eBay's NEW venture?

eBay to Open Fair-Trade Marketplace...

Retail Site Will Cater To Socially Conscious Consumers.

With consumers gravitating toward products that are eco-friendly and socially responsible, eBay is planning to open a marketplace focused on "fair-trade" merchandise.

The shopping site is being readied for launch later this year in partnership with wholesaler World of Good Inc., according to eBay spokeswoman Dariana Lau.

Today the companies jointly operate a community known as WorldofGood.com, which hosts articles, blogs, discussion forums and other information of interest to people looking to adopt a "green" lifestyle and find products that are produced using sustainable methods and fair labor practices.

The marketplace will be an add-on to the existing WorldofGood.com site, and will use a fixed-price format, rather than eBay's more famous auction-style listings. Items from the marketplace will also appear on eBay, although Lau says it is not yet clear whether they would be integrated with eBay's other listings or have a dedicated site within eBay.com.

World of Good separately operates OriginalGood.com, a site for sourcing ethically-produced merchandise from third-world artisans. It's likely that some of that site's products will also be found in the new marketplace but the venture will not be limited to those, Lau reports.

eBay is hoping to tap into the large and growing segment of socially conscious buyers, which are not typical eBay users.

Robert Chatwani, general manager of the fair-trade project at eBay, estimates that "social change consumers" spend as much as $45 billion a year on green products, but that only a small percentage of those buyers are on eBay, according to a CNET News report.

About the Author: Auctiva staff writers constantly monitor trends and best practices of those selling on eBay and elsewhere online. They attend relevant training seminars and trade shows and regularly discuss the market with power sellers and other market experts.

-------------------------------

I now know where all of those EXCESS FVF's have been going...

eBay Auctions Doomed According to BusinessWeek

by: Mary

Wed Jun 4 04:42:04 2008

I posted this on May 27, 2008 under another article here. One week before BusinessWeek article. How strange.

THIS THE FUTURE OF EBAY, BELIEVE IT OR NOT.

1) Ebay is restructuring is model. It is in a process of phasing out auctions. (I know you do not believe me.) It is has decided to be somewhat like Amazon, a superstore. It’s also streamlining its company.

2) Phase out auctions and make it BUY IT NOW: The auctions times which are now mostly 7 days, will eventually decrease to 5 then 3 then Fixed Price Only. (Just like Amazon). This will decrease the time from purchase to payment to receiving the item. As is, it takes 7 days for the auction to last, it can take any where from 1-7 days to receive payment from buyer, it takes about 2 days to prepare for shipment, and it takes about 3-7 days for the buyer to get the item. So it can take anywhere from 10-21 days for the transaction to be completely success from bid to having it delivered to the buyer. That is along time and lot problems can pop up. Ebay wants to cut that down to 2-10 days from purchase to delivery. (Why you ask?) $$$$$$$$$$$$$$

3) All items will be NEW only. That means Ebay will not allow the sales on used or pre-owned items. This will cut down customer dissatisfaction and make the Return Policy a mandatory aspect. If it new and unopened no reason to why you can’t take it back. They will push out sellers who sell used items to other sites like Ruby Lane. But, some new items cannot be returned, CONDOMS, ADULT SEX ITEMS, PERSONAL HYGIENE PRODUCTS, those things cannot be retuned. So it should be interesting to see how they will handle that. Maybe those things will be an exception to the rule or eliminated from their directory.

4) PayPal ONLY. Well that is being set up in some places already. It will set PayPal up as AMAZON PAYMENTS, meaning you can use your credit, debit or bank account to pay thru PayPal for the item that you purchase. You know that little box in your auctions listing that says: “If You BUY IT NOW you have to make immediate payment thru PayPal. If you do not make an immediate payment someone can still buy the item.” (Sounds familiar) Amazon has that. You put it in the cart on Amazon, and when you do checkout, if your credit Card is no good the transaction will not go thru and someone else who has the funds can buy it. By doing this Ebay eliminates the non-paying bidders.

5) PayPal ONLY continues with CHARGE BACKS. They found that a lot of charge backs happen because the buyer does not recognize the charge on his statement. They open inquires thinking it’s a fraudulent transaction. They buy something May 1, the statement arrives May 31, by then they already forgot what they got. Why you ask? Simple. They go on EBAY, Purchase from seller id DANDYCANDY, whose company name is FLOWERPOWER and the transaction on the statement says **PayPal FLWPWR Exotics***. Of course they get confused. I would too. Too many ids. Ebay wants to eliminate that, they want one thing EBAY & PAYPAL AND TRANSACTION NUMBER on your statement. You might not remember who you bough it from but your remember buying on EBAY and paying via paypal.

6) FEEDBACK that will eventually be dismantled completely. Many of you might remember when eBay came out with reviews. I bet everyone thought what is the point of a review, especially if eBay sells so many one of a kind item. But it was test and to let people get comfortable with reviewing. This way NEW only item (NO vintage, antique or used) can get reviews because there are more then 1 in the market. You won’t waste your time selling bad products and move on to good ones. At least that is eBay’s plan.

7) FEES, eBay will change its fees. No more per listing fee. You will pay a monthly fee and list as much or as little as you want. This also forces you to have an eBay store. That is why they lifted two seller restrictions - the Choice Policy and the Multiple Listings Limit Policy. So you will have monthly fee or yearly (if they are being charitable) and then a finale fee which will jump to 10%-15% per item depending on the price. They will rollout the scale of how they calculate your final fee.

8) CUSTOMER SERVICE: So with all these changes eBay will pull itself out of the middle and will not be involved so much with the customer service. They will focus primarily on seller services and let PayPal deal with Payment service. So if the buyer is not happy they can go through their credit card and PayPal. Or talk to the seller and resolve it. The way Amazon handles it now.

9) SHIPPING: EBay and USPS came out with FREE eBay co-branded shipping boxes. Do you know why? As part of their streamlining they will chose one carrier (USPS) as their mandatory shipping agent for eBay sellers. That means no more UPS or FEDEX or DHL or any other service. They will link it with PayPal where a tracking number is mandatory to fall under the seller protection policy at least in the USA. They will do that in all eBay operating countries eventually. Making the postal service in each country they are in, as the only eBay shipping service. This will get them in good standing with all the governments. Since all postal services are government based agencies with sub contracts to private carriers. EBay the largest auction in the world will drive revenue to the postal services. This will sit well with many if not all governments and it so much easier to close your ears and eyes to any misdeeds if the largest auction or SUPERSTORE to be is adding money into the treasury.
I shipped a package via DHL per customer request using the clients account number. When I went to put a tracking number it gave me 2 options USPS or UPS. Soon it will be just one. USPS!!!!!!!!!!
You will see that very soon.

So in conclusion with these changes and streamlining eBay is becoming proverbial MTV, it started as Music Television but it is now Teeny Bobber shows and reality crap. Video did not kill the radio star. The radio star joined the MP3 player and killed the video and the CD. Who saw that one coming? Not me. So Ebay will change from the auction site to superstore. But in its change it will leave a very bloody road. The ironic thing is the biggest change will be inside eBay. As all stream ling companies they will do the one thing no one in the company is expecting.
As TRUMP says: YOU ARE FIRED. They will let go up to 15-20% of their staff.

We are so busy protesting and arguing with ebay that we are not looking at the big picture. Look at GOOGLE, YAHOO, MICROSOFT, AOL and others. They know what is going on, they are waiting and planning to jump from behind the curtain and harpoon Ebay and stuff it and place it on their mantel.

Ebay has gotten so big it could cannot see around or behind itself. Keep your friends close and your enemies closer. Ebay is so into itself it does not see what others are doing and when it realizes it will be too late. That is why it went on a diet. But unfortunately there are so many other things in the works that eBay is a little too late.

I know most who read this will not believe me. But maybe a few will, and that is all that matters. Oh I am sure this post will end up on some idiot’s desk on eBay. Wondering how can I know? So ebay becareful, your friends can be your worse enemy.

eBay Auctions Doomed According to BusinessWeek

by: Roy

Wed Jun 4 06:47:07 2008

I do not believe online auction sites like ebay are dying. It is good to see smaller sites popping up though as alternatives for consumers to consider. Though ebay is more expensive as it has better security features for its users. Should be up to the sellers to decide how they want to allow their customers to pay... and customers can agree or disagree.

Other smaller sites, such Auction Zone which was launched last week is hoping to gain some more payment options for those who do not want to be forced to use paypal.

Roy
www.auctionzone.com.au

eBay Auctions Doomed According to BusinessWeek

by: Tired

Wed Jun 4 07:42:56 2008

Well it just keeps getting better. It's not the lack of demand of the shoppers, there are just LESS shoppers! Which is directly related to the policy changes being made at eBay. EBay would have a better chance letting dumb and dumber run the company. Now a few things don't fit in my head which are if they want to go to fixed price, new items why don't they promote seller stores with new stuff??? Why is it that a true fixed price item and an auction item (both the same price) running together same shipping fees etc etc the AUCTION item gets MORE HITS??? I have done this several times. I use an auction sniper to find bargains and that allows me to sleep when something is ending at 3 in the morning. All eBay has to do to increase the final price on an auction is to set a 3 minute rule (auction runs for a minimum 3 minutes after a bid) Not something I like personally but it would work. But what does it matter eBay is in the toilet and the handle has been engaged!

Oh and as far as all the other wonderful new sites HA I sent emails to all of the ones Ina has listed and a few others, I received 2 responses... Could not register with 1 and in a subsequent email was told they moved to new servers give it a few days (nice response) and the 2nd one is so slow it's pathetic.

eBay Auctions Doomed According to BusinessWeek

by: Lisa

Wed Jun 4 07:46:07 2008

I think true "Ebayers", both sellers and buyers, know the new Ebay is doomed to fail. JD and crew don't get the Ebay community because they have made this all about them. And I think we've lost the good fight. Their going to follow their innovative plans to the end because they're so darn smart.

So what shall we good Ebayers do? We create a new Ebay. There's plenty of new up and coming venues that are trying to implement the community feel Ebay once had. It'll take time, but people really want that. Hence, all the outpouring of passion and anger.

I don't even care what happens to Ebay now. "They've made their bed." Use them but definitely spread out.

eBay Auctions Doomed According to BusinessWeek

by: mike

Wed Jun 4 08:23:00 2008

I have been selling on eBay since 1999. When eBay first emerged I looked at buying it's stock and decided...NO WAY, there's nothing proprietary about what they do. Other businesses with be launched and compete with eBay. Well, I was wrong. Why, because eBay DREW the most BUYERS AND SELLERS and as a seller your item would always rise to what the market would bear. You could start an auction at $1 and know it would sell for what is was really worth. NOT ANY MORE. For me Sell through rates are WAY DOWN, hit counts are WAY DOWN. So as a seller you now have to list the items at a higher price too ensure you don't lose money. What does that mean to a seller? LOWER sell through, LOWER prices received for the item, HIGHER LISTING FEES, TOTAL DISGUST. I can only guess as to why this has happened.
NEW DSR ratings affect search results. I have been a power seller since inception and with the NEW DSR my SEARCH rating is LOWERED. All my categories are 4.7 or better EXCEPT Shipping which is 4.5. I don't think I over charge for shipping, I think buyers don't realize that Shipping cost's have risen SUBSTANTIALLY. UPS,DHL,Fed-Ex now charge by the dimensions of the BOX, not by the weight, Fuel Surcharges, Delivery Area Surcharges, Cost of supplies etc.
IMHO SOLUTION: Right now BUYERS leave DSR by STAR RATING. for S/H a 5* is Very Reasonable, 4* Reasonable 3* Neither unreasonable nor reasonable Yet a 4 STAR Rating or less is TOTALLY UNACCEPTABLE as a seller. To fix this eBay should eliminate STARS and have a drop down menu with a TRUE DSR rating that allows for a range of numbers from 5, 4.9,4.8 4.7, 4.6 etc. This would TRULY reflect how the BUYER feels

eBay Auctions Doomed According to BusinessWeek

by: Nan

Wed Jun 4 09:09:36 2008

I'm of the opinion that it is the Auction Format that brings the shoppers to the eBay site in the first place.

Once the curious arrive, they may go ahead and make their purchases using BIN or straight from a store, but it's the lure of the Auction that brought them there to begin with. The promise of a ''find''. Without the Auction, eBay would be as bland and unexciting as - well - eBay Express.

eBay - Don't Kill The Auction! Feature it, market it, dress it up like an old ho' and parade it out front. Then let your sellers do their jobs.

eBay Auctions Doomed According to BusinessWeek

by: drew11

Wed Jun 4 09:27:01 2008

There are many bargains to be had on ebay now because of many fewer bidders and the poorly designed best match. Now I win about 80% of auctions i bid on with pathetic low ball bids. I nearly missed 7 auctions yesterday because they were buried under best match dreck.

On the new ebay desktop program there is no easy way to tell the difference between a store and fp item. That is the (near) future on ebay.

eBay Auctions Doomed According to BusinessWeek

by: long time ebayer

Wed Jun 4 09:35:11 2008

i have been buying and selling on ebay since 1998. as a buyer, i don't need ebay to be like any other retail site. i can often find new items on amazon and other retail sites much cheaper than on ebay. i need ebay to be an AUCTION!!!! where i can find unique items that are NOT on other sites.

as a seller, i need buyers to find my items. there is nothing more fun than seeing a bidding was develop and watching your item go up in price. the buyers love that as well.

in the last few years, my sell through rates have dropped precipitously. often, if i list 10 items, i will be lucky to sell one... thus, my listings have dropped as well. if my sold item (minus fess, fees, fess and more fees) barely covers the item, it certainly won't cover lots of listings.

one of the beauties of ebay was that it used to be a level playing field. small sellers were treated just like large ones. now ebay is just interested in partnerships with large businesses. of course there is nothing wrong with that business model- but it exists all over the internet. ebay was UNIQUE!!! that's what made it grow from a tiny business selling pez dispensers to the behemoth it became. it has lost its business model and its way.

unfortunately there really are no other sites picking up the slack. if the other sites are to be successful, they need to draw buyers. the sellers will come naturally. to draw buyers, they need to advertise.

i will hope that someone comes along with a new site that works.

eBay Auctions Doomed According to BusinessWeek

by: Lynn D

Wed Jun 4 09:49:58 2008

Does anyone else out there find it ironic that ebay wants to start a Fair Trade market place?

Products made from sustainable methods and fair labor practices, Ethically produced merchandise.

Hmmm does ebay really understand what fair trade is? Ethically produced? I did not think Ebay even understood the definition of Ethical.

And I agree with HealthyJerky4U ebay is rubbing it's greedy little hands together to get their cut of the FVF's on the backs of the people in these poor countries. The whole point of the products is green and being able to help the people in their countries raise themselves up to a better standard of living.

Ebay has done everything they can to push out their small sellers that were making a better standard of living for themselves. Now they have fresh meat as it were.

Personally it makes me mad and sick!

eBay Auctions Doomed According to BusinessWeek

by: Randy Smythe

Wed Jun 4 10:27:27 2008

If Auctions are dying, then eBay management killed them.

Auctiions can't co-exist with Fixed Price listings and thrive. eBay could save auctions by spinning them off on their own -- eBay Classic then the New eBay would be 100% FP.

This is what they should do, but not what they will do.

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