Saturday, May 3rd, 2008
eBay partners with Buy.com
I was having lunch with members of the PR team on Thursday and the subject of a new partnership with Buy.com came up. I was told I’d have information by the weekend so I could draft a post for Ink. Two hours after lunch, Randy Smythe of My Blog Utopia contacted me asking if there was any reason for the apparently sudden surge of Buy.com postings to the site. As you can see from his post, he has certainly done his homework and, for the most part, he sums it up very well.
In a nutshell, yes, eBay has entered into a partnership with Buy.com that will see them move all of Buy.com’s new and in-season inventory onto their eBay store in the coming weeks. Terms of the deal are not being disclosed publicly but the messages I’m hearing echo recent themes coming out of eBay presentations focusing on a better buyer experience and moving toward a more retail-like experience. eBay spokesperson, Usher Lieberman, provided Randy and I with the following:
“eBay is aggressively using price as a lever to improve the value and selection on eBay.com. Consistent with our goals, we have entered into a partnership with Buy.com to bring their new-in-season merchandise onto eBay.com. We expect to learn a great deal from this partnership and we will build upon the results.”
In order to protect sellers from being crowded out of search results, Buy.com merchandise will be limited to a single-listing per SKU and, even though Buy.com will be competing for eye balls in the same way as all of eBay’s sellers (through DSRs), I must point out the fact that this deal is “economically feasible” for both parties.
That said, I do want to address previous comments on Ink — and Randy’s assessment of it in his post (copied below) — regarding Pierre Omidyar’s recent indication of what he meant by a “level playing field.”
From Randy’s post:
I’m all for allowing sellers to negotiate volume deals with eBay, I had asked to negotiate my fees every year I sold on eBay and was always told “that is not going to happen,” but in light of eBay founder, Pierre Omidyar’s recent quote about “the level playing field” you can see that this announcement will not sit well with eBay sellers.Pierre said, in a recent quote from a video clip “What I meant by level playing field is that everyone should be given an equal opportunity….. I didn’t want to have sort of artificial barriers placed on newcomers and to have people by virtue of their stature outside of the eBay community somehow be treated better—special deals behind the scenes because they’re a big retailer and we want to get them to come on eBay, that kind of stuff. That would have been—is—a disaster. That is what I meant by level playing field.”
It’s my assertion that Pierre was talking about the conditions and approach to the Marketplace at the company’s founding. It has obviously evolved since then and it’s pretty clear that eBay has been, and continues to, expand and experiment with new pricing and business models on the site. Again, all geared at providing the best possible buyer experience. (I know, I know, there is PR-hack / kool-aid speak in that sentence… I just can’t help it sometimes).
I’ve been informed that we are not, at this time, extending the “deal” to top sellers and that any partnerships will be assessed on a one-off basis with hand picked partners. Personally, I think that top sellers that have put the sweat equity into helping make eBay what it is today - that have consistently provided excellent service for their customers - should be included for consideration when the time comes.
Cheers,
RBH
Tagged: buy, buy.com, buyers, dsr, ebay, ecommerce, Marketplace, online+shopping, online+trade, partnership, sellers
Scott @ TradingAssistantJournalOn 05.03.2008 at 1:53 pm Said:
Richard,
I appreciate your views on this subject and the transparency brought on by Randy Smythe’s - My Blog Utopia post…
Unfortunately I think this “Partnership” with Buy.com may re-kindle the firestorm of a few short weeks ago.
Sellers on eBay will not be assuaged by the limitation of only one listing per SKU. When Buy.com can flood the market place with 150,000 SKU’s and turn those items over 8 times per month at what must be a reduced cost, we are no longer dealing with a level playing field.
If eBay plans on offering reduced pricing for bulk sellers, and that seems to be the case, then you better advise Usher and the Execs to get ahead of this story. Look for a way to offer the long standing volume “customers” of eBay a way to partake in the same offer.
Otherwise, it seems eBay is simply telling all of the sellers who are smaller than Buy.com to go elsewhere, which may be the plan, but if it is… better to tell them sooner than later.
I am not normally this direct with my posts, here or on my own publication… And I apologize for my directness. But this deal does not sit well when only one company essentially is granted a license to steal by gaining reduced price access to core search in exchange for a “undisclosed” terms.
Peddle fast Usher, I think this story will be a job to shape in your favor without more information.
Dave_WhiteOn 05.03.2008 at 3:05 pm Said:
Richard,
I appreciate your comments. What it will mean for your future remains to be seen.
Recent remarks by Lorrie Norrington regarding the “buyer experience” and “a retail marketplace” have become amazingly obvious very very quickly.
No more will eBay sellers see the “equal opportunity” that Pierre talked about in his video interview. The partnership with Buy.com (which by the way just entered into a strategic agreement with ChannelAdvisor) rings the final bell for small to medium businesses and individual sellers on eBay.
From a business standpoint this is a very smart move for both eBay and Buy.com. eBay has decided that hundreds of large corporate accounts are much easier to deal with than millions of individual sellers.
Top sellers on eBay will no longer be small to medium sized businesses. Plain and simple. Sellers on the site will be those large businesses with tens of thousands of items.
This business model works in today’s corporate environment for eBay. It does not work for individual or small to medium busiesses, and so those sellers very simply will need to find other marketplaces as it is very clear they will not be selling on eBay if not today, by this time next year, at least as we know the site today.
MistyOn 05.03.2008 at 6:38 pm Said:
Richard I personally have no problem with retail competition they don’t sell what I sell, I am happy with the knowledge that we will not be crowded out.
What concerns me is their fee structure to incorporate this change to retail, I feel this is unreasonable to those of us who do not sell retail items and ask that a separate tier and fee structure be created for those of us who are not retail.
Formerly Known As MarikaBooksOn 05.03.2008 at 7:31 pm Said:
Of course you will be crowded out, Misty. That’s the New Ebay way. Shove the little guy aside and to the bottom of the heap in favor of the Buy types.
And there is already a different fee structure for those who are “not retail.” YOU will pay more to subsidize the special deal that Ebay cut with Buy.
Buy is only the beginning. Which big retailer will be next to shove aside the little guys who helped to make Ebay management rich? Coming soon to a category near you.
MistyOn 05.03.2008 at 8:49 pm Said:
@Formerly Known As MarikaBooks
I know and understand exactly what you are saying and I do not disagree with you at all. I do think it is silly on their part to give a low priced retail high volume item a better deal over a high priced quality low volume item when the end result is practically the same. So this was basically the point I was trying to make.
Concerned ebayerOn 05.03.2008 at 9:24 pm Said:
Make them run .99 cent no reserve auctions and file UPI’s for NPB’s.
See how long they last!
SandiOn 05.03.2008 at 9:43 pm Said:
I guess ebay simply does not really get it. Why would I come to ebay.com to buy something from buy.com?
ebay is slow, the search is useless and right or wrong, I would have the perception it would cost less buying direct. Afterall, ebay charges “the regular seller” 12.75% in FVF for store items. Even if buy.com was getting a break, I would still know there was an ebay markup in there somewhere.
I would be curious if the deal with buy.com excludes them from some of the apsects the “regular sellers” must endure, such as ads on their listings, DSRs, etc - because if ebay claims all that is for a “better buying experience” wouldn’t that apply to ALL sellers?
With DSRs, you do have to wonder about the industry standards of customer satisfaction - and you have to look at the retail industry high of 80% - ebay going to ding buy.com if their DSRs hover around the 3-4 rating? Their customers will be different, they know they are purchasing from a big company, one that will not instill loyalty like a small seller does. Come on, I have a couple of my sellers on my Christmas card lists, and I am on theirs - never would occur to me to send buy.com a Christmas card.
Additionally, I would want the option of paying direct via my credit card and not have to use paypal.
It will be interesting to watch from the sideline. ebay may have boxed themselves in in ways they have not thought through. One of the themes I have noticed in the various election year poohla is a theme of the America people, at least, are looking for trust, intregity, moral character - ethical behavior.
When all this falls apart in ways ebay had not calculated, how can they publically state their normal pr & try to alter what was good for the “buying experience” is now “this” because the buy nows of the world refuse to allow some of this crapola to inpend their business.
eBay got alot of bad publicity in the past months and threw sellers under the truck, the press love to kick the “big corporate bad guy” when the door is flung open for them.
I have found through the years of owning a business, people stay true to form, the way Donahue thinks about the current sellers will ultimately be no different than he thinks of his “retail” merchants. I also know from experience, the mindset at the top trickles down to the employee who cleans the bathroom. ebay’s infection will ultimately cause it’s death.
But for now, I will simply write buy.com a letter with copies of my pruchases from them and explain I will no longer buy from them as long as they are attached in any form to ebay. I understand I can’t effect change, but I can make sure I do not support it when I disagree with the ethical nature of the practices occurring.
Richard, loving the job still?
SandiOn 05.03.2008 at 9:47 pm Said:
P.S. Curious too, exactly how much “PASSION” is buy.com going to have about ebay?
Never mind, I almost spewed my hot cocoa thinking about that one.
I suspect Donahue would prefer less passion.
Patricia1On 05.03.2008 at 10:17 pm Said:
I’m guessing they don’t even have DSR’s or have to abide by anything else us lowly sellers have to put up with. I’m guessing they will be treated the same as walmart is treated.
Well, I doubt they’ll replace art but it doesn’t matter because during the years from 2004 to now, they have effectively destroyed it. With the coming of best match that kind of finished it for small art sellers. I imagine best match will be aimed at sellers like buy.com and the rest will trail behind. This is probably the beginning of turning ebay into retail - more and more retail and less and less small sellers till we’re all gone. I’m glad they can’t see me thumbing my nose right now. Guess they’ll have to try this out - they’re bound and determined to do it…I’m only hoping we get a viable substitute in the meantime so that when ebay figures out one more huge retail company isn’t as lucrative as they think - then I’m hoping they won’t be able to lure small sellers back again! I can dream, can’t I?
HenriettaOn 05.03.2008 at 11:15 pm Said:
Richard your personal thoughts in the last paragraph undoubtedly are shared by any decent person, unfortunately it has been proven over and over again the last few years that once you get into the 1M plus per year bracket any decency has long since flown out the window.
Patricia & Sandi
Buy.com currently has DSRs of 4.8 across the board. I seriously doubt that the status of their DSRs will affect the special deal they got because they do not have to abide by the multiple choices rule either.
Only thing I am curious about is the response of the Pesa/ECMTA group who had such a lovely get-togher in New Orleans last week.
We live in interesting times. The numbers will tell in the end.
Patricia1On 05.03.2008 at 11:28 pm Said:
Henrietta - do you think whatever DSR’s they have and whatever they’re rated that it would effect their standing as sellers or their placement in best match. I seriously doubt it.
SharronOn 05.04.2008 at 12:14 am Said:
Since the DSRs are annonymous, how do we really know that buy.com’s DSRs are being accurately reflected in their feedback?
MechelleOn 05.04.2008 at 12:24 am Said:
You know what I don’t understand is how eBay gets away market manipulation. Why hasn’t anyone called them on their manipulating our auctions in the name of a “better buyer experience” with the true intent of increasing conversion rates so they can collect fees be damn with the rest of their customers- rig the auction to eBay’s benefit or your not getting what you paid for- that is their scam.
I was scrolling last night and I noticed some ads for shopping.com at the bottom and they were the exact brand of makeup I was searching at the time- so the shopping.com ad was advertising Sephora- nice! the real kicker was that I noticed as I would hit the bar going down that as it neared the next page bar - the page would drop - passing the last 3 auctions and force the exposure of the shopping.com ad. Also, the shopping.com sephora ad was on every single page of search results- some have 50+ pages and that ad was exposed on that many occasions forcibly even.
Every search I did for all the different brands I sell had a shopping.com with a competitor peddling the same brand as all the sellers who paid for their auctions to be shown- paying for the eBay.com site and supporting the build of eBay’s other shopping site.
My question
WHAT IS THE PROBLEM eBay YOU CAN BRING ALL THE BUYERS TO US, BUT YOU CAN’T BRING BUYERS TO YOUR SHOPPING.COM SITE? Maybe that’s because you don’t bring anything to us you little fools- again your existence is relative to our letting you be. If this site goes down- eBay Inc. will crash hard - nothing else eBay holds is independent. They are 100% nothing without all of us- nothing nothing nothing
Funny, I know I am nothing without my customers,and I thank them for choosing to buy from me. It really does work better - I have happy customers who send me personal emails expressing their pleasure with our transaction. From the way I feel and what I see your communications regarding your services are nothing to brag about- hell I would be crying if my customer’s felt and said the things your customer’s do and say about you. It’s a good thing I have self-respect, pride, and integrity so I will never have to experience the hatred and disgust from my customer’s that yours feel about you.
[Sentence edited: see comment policy]
SandiOn 05.04.2008 at 12:33 am Said:
but back to what I said about price, I just picked the first item that came up, a book called Shotgun Bride. I can buy it on ebay from them for 7.20 and some change, 4.85 shipping (12.05 total), or go straight to buy.com and buy the same thing for Price: $4.73, Shipping: $2.85 (7.58 total).
Or The Truth About Money, ebay I have to pay 12.06+6.15, but direct I only pay 11.35+4.55.
ebay offers me NO VALUE as a buyer to want to pay more. What ebay is more trustworthy, safer than buying direct from buy.com? Of course not. To simply use ebay’s search, ebay should be PAYING me for the extra time it takes to find what you are looking to buy for goodness sakes.
I don’t need ebay to buy new things for more money.
What I did need ebay for was finding those one of a kind gems someone found at an estate sale, or the one of a kind sculpture that fits perfect in my living room, or that one of a kind eames era paper weight. For that I was willing to spend hours searching.
I was willing to pay more for used from a small seller because I could not buy it RETAIL. That’s what made ebay special.
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