Amazon.com Perceived as Owning the Customer 3X More than eBay

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

November 14, 2009

Amazon.com Perceived as Owning the Customer 3X More than eBay

By: Ina Steiner

Sat Nov 14 2009 22:06:17

It was an innocuous four-question poll, which brought back a very interesting result.

Last week, we asked our readers, "When a customer transacts business with you on (eBay, Amazon, Etsy and Bonanzle), who do you feel the customer belongs to?" We gave respondents two choices to each question: theirs or the venue's. We were much less interested in the aggregate results than if the perception of customer ownership varied at all across venues.

Not surprisingly, the overwhelming majority felt the customer was the seller's - in fact, there was less than 5% difference in response across three of the venues, but on Amazon.com, a significant number of the very same respondents felt the customer still belonged to Amazon - nearly 3X that of eBay, and nearly 5X more than Etsy and Bonanzle.

We put our theories about the factors that contribute to this seller perception in Sunday's newsletter (link to article) - but let us know what YOU think!

Comments (24) | Permalink

Readers Comments

Amazon.com Perceived as Owning the Customer 3X More than eBay

by: Patricia

Sat Nov 14 22:38:41 2009

Yes, I believe that too. Perhaps its because Amazon also sells directly to customers and perhaps its the fact that if the transaction with an Amazon seller goes wrong - bottom line is Amazon will reimburse the buyer. I don't see Ebay this active - and they certainly do not make direct sales....neither does Etsy or Bonanzle. I believe this safety net is why Amazon far far surpasses its nearest competitor.

Amazon.com Perceived as Owning the Customer 3X More than eBay

by: KAL

Sat Nov 14 22:52:38 2009

Interesting. I do about 30% of my sales on Amazon, 50% on eBay and building traffic to my own site, which accounts for the rest. There are no illusions with Amazon - they make it very clear that you're their guest.

Don't get me wrong, I'm happy to be there - it's a profitable channel for me, but it's by no means a panacea.

Amazon.com Perceived as Owning the Customer 3X More than eBay

by: Loops

Sat Nov 14 23:43:50 2009

I personally have a huge problem with a venue having all no restricted access to my sales vendors, sales history who is also a retailer. This will allow them the critical data to determine if it's better to bring the product in house.

This is why I don't understand why there is not too much discussion about Amazon on Auctionbytes.

If there isn't some type of conflict of interest with this model, then somebody please explain it to me.

Amazon.com Perceived as Owning the Customer 3X More than eBay

by: Christopher

Sat Nov 14 23:48:51 2009

I did not even realize, until I took this survey, that I thought the customer was Amazon's. On the other venue's I believe that the customer belongs primarily to the seller.

On Amazon you don't have to create the listing, or even choose shipping. You choose the product and write 2 or three sentences about the item and your service and that's it. You don't pay to put the item out there, so you aren't renting space, like on eBay. They are paying for the space. You have very few questions to answer, and don't have to deal with unpaid items, collecting the money, or providing the guarantee to the customer. It takes very little time or money to sell there.

I rarely sell there though. The fees are more, for what I have sold there. The main items I sold were competing directly with Amazon. I usually lost money on the shipping, and had a very small profit margin on the items, to be competitive, and many times lost money on the whole transaction. I especially like eBay for being able to show more pictures of the item and give a detailed description. I control the look and detail of the listing. It is personalized. I also like having more ownership of the customer.

That's my experience anyway.

Amazon.com Perceived as Owning the Customer 3X More than eBay

by: RicRoe

Sat Nov 14 23:59:47 2009

IMO Amazon does own more customers than eBay does.

Amazon started as an inventory owning marketplace, so when you originally bought on Amazon, you bought from Amazon and goods were shipped by Amazon.

While they have begun to vastly expand the number of third party sellers, still today, many items sold on Amazon are shipped from Amazon warehouses.

eBay has always been a venue that exclusively relied on a strong community of third party sellers which own the inventory and ship to buyers.

eBay's biggest issues today are rooted in the fact that eBay has inserted itself deeper and deeper in transactions.

eBay continues to attempt to place more and more restrictions on sellers under the mistaken belief that these controls improve the buyers experience.

eBay executives need to examine the results of their controlling efforts.

Instead of producing better buyer experiences, eBay has managed to pit buyers and sellers against each other. Management's flawed vision has degraded the buyers experience as evidenced by the steady decline in sales across eBay.

As eBay revised the feedback policy and inserted a rating system, sellers greatly reduced International shipping to defend themselves against anonymous low DSR ratings. Result - lower sales volume through eBay.

When eBay arbitrarily declared that checks and money orders were suddenly unsafe payment methods and forced PayPal into most transactions, buyers and sellers reacted and moved their activity to smaller more payment friendly marketplaces. Result - another decline in sales.

When eBay decided they had to manipulate search in a failed attempt to steer buyers to favored sellers, buyers moved their browsing to sites that produced clear accurate and reliable results. Again, eBay's efforts fail to please buyers and sales decline some more.

When buyers and sellers turned to eBay's own discussion boards to voice their objections to changes, management choose to delete unfavorable posts. To prevent giving the 'noise' any credibility, eBay terminated the majority of 'pinks' in an effort to further muzzle the ''noise''.

The data is right in front of current management's eyes. Thus far, every effort to ''improve'' eBay has resulted in abject failure - generating nothing but steady loss of sales volume.

One of these days, when new management moves into the cubicles in San Jose, the new leadership will see the many changes forced on the marketplace by JD & Co, and begin to take steps to reverse course.

Has eBay waited too long to admit they have been self defeating for the past 2 or 3 years?

Is the viral infection spread by JD & Co fatal or can it be cured with a complete management change?

This question for the eBay board of directors... We have all seen the steady decline in sales as JD and his team have dragged eBay closer and closer to disaster.

Could a complete management change possible do a worse job than the mess created by Donahoe & Co's destructive innovations?

Let's see the board of directors innovate totally new management and let's all find out.

Amazon.com Perceived as Owning the Customer 3X More than eBay

by: fruity

Sun Nov 15 02:05:50 2009

That's because Amazon actually takes responsibility for the transactions on the site. As opposed to "don't sue us, the porns not ours" or "we didn't know they were counterfeits, here take the child" ebay.

I guess that's Meg Whitman dynasty. She'll throw your grandma under the bus if it gets her out of being regulated, sued or tossed in the big house. Anything to be responsible. They're YOUR customers when they need a scapegoat to absorb the liability but they're EBAYS customers when it comes to protecting them and making sure you use PAYPAL.

lol

Amazon.com Perceived as Owning the Customer 3X More than eBay

by: Jen

Sun Nov 15 02:24:15 2009

Although I occasionally buy something from ebay, I do most of my shopping on Amazon. I pay for Amazon prime every year, my item arrives within two days without fail and the prices are usually far less expensive than the same item on ebay.

I have rarely bought something that doesn't have free shipping and never have to even communicate with the seller - in fact, I consider Amazon the seller. I sold on ebay for 10 years (mainly collectibles), but the disastrous changes over the last year or two has put me off selling there completely.

Amazon will even call YOU immediately if you have a question, and I've never had less than great customer service. Good luck getting through to ebay. They could have had it all back in the day and totally blew it.

And as to Meg Whitman who made her billions on the backs of the sellers, then handed if off to Donahue, good luck to her - not. Now she wants to be gov of my state and didn't even vote until her late 40s? The state is in such bad shape as it is, I can't even imagine what would happen under her governance.

No wonder ebay is going downhill quickly, run by such clueless and uncaring people. etsy, bonanzle, ecrater, etc are ok, but rarely show up in a search.

Amazon all the way.

Amazon.com Perceived as Owning the Customer 3X More than eBay

by: avid AB reader

Sun Nov 15 06:21:27 2009

@ Jen

"etsy, bonanzle, ecrater, etc are ok, but rarely show up in a search"

I guess that depends on what one collects or searches for. Amazon does have a lot to offer when it comes to books, CD's and mass produced imported items.

Some of us aren't into "collecting" mass produced abundant items so for us Amazon is the one that "rarely" shows up in a search but the other sites do. ;-)

Amazon.com Perceived as Owning the Customer 3X More than eBay

by: Jo

Sun Nov 15 07:25:28 2009

I guess when we use another's venue we are subject to their policy and or terms that define who or what belongs to that venue. I for one have always felt the buyer was my customer, and I believe from continued business with the buyer with us they believe the same and see eBay as only a venue to find sellers.

RicRoe above mentioned the following about favored sellers....When eBay decided they had to manipulate search in a failed attempt to steer buyers to favored sellers.....I believe he was correct in this assumption. I know this does not pertain to the above topic but regarding the top rated sellers and DSR's that determine them. Can anyone explain why this seller is considered top rated by eBay especially when one looks at their DSR rating which I believe determines a top rated seller...... Cosplay007

Amazon.com Perceived as Owning the Customer 3X More than eBay

by: paulathomas

Sun Nov 15 08:39:22 2009

As a recent seller on ebay in Ireland, considering adding Amazon as a channel, this article and the comments are extremely useful. Any tips to increase consumer confidence is good for all eCommerce business, so lessons can be learnt from Amazon - no doubt about it!

Amazon.com Perceived as Owning the Customer 3X More than eBay

by: Fred

Sun Nov 15 09:21:49 2009

My experience with Amazon is that Amazon is great - 3rd party market, not so much.

In fact, I've had so many bad transaction with the ''marketplace vendors'' that I don't even consider items that are not sold by Amazon directly.

Vendors on Amazon really are using Amazon's reputations to generate sales - unlike any of the ''venue'' markets like Etsy, Ebay, or Bonanzle. Especially since you can purchase almost anything at a better price than on Amazon. They've gone from the best priced to the highest price in about 2 years.

Amazon.com Perceived as Owning the Customer 3X More than eBay

by: Peter Leeflang/CEO Leeflang Archives Corp

Sun Nov 15 11:44:41 2009

No istery why most Ebay/Etsy/Bonanzle sellers feel they are owners of their customer base. The reason is that they are the ones bringing traffic to these sites, while teh sites themselves contribute little buyer traffic on their own as they do not invest in advrrtising a lot.

The opposite of this is Amazon, which is the big contributor to traffic from buyers, so sellers have no or little investment to do there in advertising. On top of that Amazon offers their very positive branding as the main reason for buyers to purchase there, while teh other 3 sites really have no such branding (and Ebay even has a negative branding amongst buyers!).

Amazon.com Perceived as Owning the Customer 3X More than eBay

by: On Lies and Secrets

Sun Nov 15 13:12:22 2009

I don't think the differences in the perception of who ''owns'' the customer between Amazon and the other venues is surprising for most of the reasons already mentioned - chiefly that Amazon actually has inventory that they sell directly to buyers.

I have been a shopper on ebay and amazon for the same amount of time (ten years). As I recall, ten years ago, amazon only sold books and they owned and shipped their inventory. Later Amazon branched out to other product lines and then added third party sellers. Unlike ebay or the other sites, a buyer can still shop exclusively from amazon itself and not use any third party sellers at all. I didn't buy from third party sellers on amazon for a very long time. Now most of my purchases there are from third party sellers.

I think the move to supporting third party sales was a wise business strategy on the part of amazon. I think they received a lot of flack about this decision from analysts back then. I suspect that the folks at amazon realized that they were losing out any profits from secondary sales and their historical product line (books) had a long history of robust secondary selling activity.

I would imagine the perception that the customer belongs to amazon comes partly from historical reasons and partly because even now a buyer never has to buy from third party sellers for several categories of goods. Some buyers only buy directly from amazon, so reality supports this perception. Buying from third parties is optional on amazon, but it is mandatory on ebay or etsy.

Amazon.com Perceived as Owning the Customer 3X More than eBay

by: kw

Sun Nov 15 13:57:56 2009

Seems to me the survey results make sense. Amazon branding and the fact that they do have their own inventory makes them quite different from the other venues.

Bonanzle and Etsy have necessary rules and policies but don't pretend to 'own' the buyers. The sellers can freely interact with potential buyers, which for unique items is often a plus. It is understandable that sellers view the buyers as theirs since all inventory and most of the marketing is the seller's responsibility.

Ebay, on the other hand, has an identity crisis. Presumably the sellers 'own' the buyers but the changes over the past few years have tended towards treating sellers as employees and buyers as a commodity. What amazes me about the survey results is that so many ebay sellers still think the buyers are theirs. There are so many obstacles in the way of communicating with sellers, which for collectibles is a killer. Ebay wants to control every aspect of a transaction without the responsibilities normally assumed by sellers. So far that is a model that has produced only decline in the ebay marketplace.

Amazon.com Perceived as Owning the Customer 3X More than eBay

by: Patricia

Sun Nov 15 18:39:17 2009

As long as the seller still has to communicate with the buyer - if only to transfer his goods to him, then the buyer is NOT Ebays. I cannot tell you how many buyers I've directed to my website and some come back and buy there again and again. Ebay has no real control over buyers - they can say the buyers are theirs but they have nothing to offer a buyer. What they're doing is foolish...even their own diamond sellers direct Ebay buyers to their websites. Ebay is a joke in that respect....an utter joke! They need to come down off their lofty towers and get real! Start furnishing the things sellers need in order to SELL and stop the manipulation. That's part of their failure and they're too stupid and arrogant to see it.

Amazon.com Perceived as Owning the Customer 3X More than eBay

by: Et tu, Brute!

Sun Nov 15 20:10:32 2009

Amazon never let's you forget that they are the boss. Amazon says what it means, and means what it says.

I won't even address this in regards to the other venues. The issues ARE somewhat different.

eBay is what it is and we all know what THAT is. Etsy is growing in ENORMOUS leaps and bounds, but then, so are Bonanzle and the others. Bonanzle is literally gaining hundreds new i.d.s a day, and in a multiplying manner. Bonanzle, by the way, is HIGHLY accessible in Google Shopping. A real bonus this holiday season, and I am rethinking several positions for this reason.

These up and coming sites need us. We are being courted.

Not so with Amazon. Amazon is a long, long river and its already a behemoth entity. We Third Party Sellers, aka 3Ps, are a little bit of icing on the Amazon cake. It is tough but it is fair.

Yep, it's a whole DIFFERENT matter with Amazon.

Amazon.com Perceived as Owning the Customer 3X More than eBay

by: e

Sun Nov 15 20:16:52 2009

@ Jen

Sorry, you are quite mistaken. Etsy and Bonanzle show up consistently in Google searches, and more often above eBay AND Amazon!

Amazon.com Perceived as Owning the Customer 3X More than eBay

by: Ming the Merciless

Mon Nov 16 00:01:54 2009

Ebay shills Jennifer, Herb, and Pete have rejoined us in the few days to let us know just swell ebay really is.

Isn't it nice to have these beacons of rationality and logic back among us?

You know why I think people buy from me on ebay are my customers?

Because ebay's been telling me that since the very beginning including once in the last seven days.

Ebay is Just A Venue.

The only customers a "just a venue" can have are those who pay a fee to be in the venue.

My buyers pay for only the product I sell them -- they are not paying ebay to play in their just-a-venue.

As usual the consummate hypocrisy and greed of this reprobate corporation shines brightly through ebay's growing dung heap of verbiage.

Amazon.com Perceived as Owning the Customer 3X More than eBay

by: Philip Cohen

Mon Nov 16 02:16:24 2009

Why is “Noise” Donahoe destroying eBay?
http://www.auctionbytes.com/forum/phpBB/viewtopic.php?p=65028
77

Amazon.com Perceived as Owning the Customer 3X More than eBay

by: Marvin

Mon Nov 16 03:14:48 2009

Amazon and ebay cannot be compared, they are two completely different types of businesses.
According to SEC fillings;
ebay is classified as - SERVICES-BUSINESS SERVICES, NEC
Amazon is classified as - RETAIL-CATALOG & MAIL-ORDER HOUSES

ebay cannot properly identify its customer base or understand the type of business they are. Under donahoe ebay wants to be amazon. Donahoe sees how profitable amazon is and incorrectly uses them as a role model to run ebay. It just goes to show how poorly managed ebay has become.

Ebay is a service operating and developing policies as if they were a retailer. Thus all the mess.

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