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
CrunchyPostingGoodnessOn 05.05.2008 at 10:34 pm Said:
Amber,
“No, BUT a certain level of professionalism should be expected and is relatively easy to achieve.”
I completely agree, a certain level of professionalism should be expected. I think the part that I disagree with is that all sellers should have to reach the highest level of professionalism, which is what eBay seems to be expecting from sellers.
I think hobby sellers should have one level, small sellers should have a slightly higher one, and professional sellers should have to reach the highest level. I also think that certain privileges should be allowed for each level, above the other ones below, in recognition of the greater effort necessary to achieve that status.
As to shipping w/ carrier pick-up, I’ve read posts from several sellers through the forums over time who live in rural areas and do not have postal pickup available. Also, I would never leave packages outside of my house from pick-up, as I would be afraid that they may get damaged by weather or stolen. So I’m not sure that shipping solution is the right way for everyone, and therefor shipping on-time is not always that simple.
Not to mention personal illness or family emergencies. I can rely on my business partner to get out any orders on time, should any of those situations arise for me, but I’m not sure that a hobby seller, or small seller could always promise the same. I have never heard of a large retailer telling people that they couldn’t send out their orders due to a family emergency or illness. Severe weather, perhaps, but never for personal reasons.
As to the feedback, if receiving good feedback is simply a matter of knowing the product and valuing customers, then the recent changes to feedback should be of no real concern. However, on ebay at least, I think there is a bit more to ensuring good feedback, but only eBay has control over that.
LurchOn 05.05.2008 at 11:13 pm Said:
Crunchy and Mechelle - thanks for adding all of the words I wasn’t feeling well enough to type today 
There’s also other issues there, too, including the restocking fee (as far as I know PP doesn’t usually allow for that? I think?)
CrunchyPostingGoodnessOn 05.06.2008 at 8:09 am Said:
Lurch,
The eBay help pages say that a merchant can charge a re-stocking fee, but I’m not sure if PayPal will honor that. The two divisions seem to have different and conflicting policies. The decision also depends on which PayPal employee you deal with at a given time.
Furthermore, eBay is all about the “buyer’s experience” right now. For most buyers I would imagine a restocking fee would qualify as a “bad buying experience”. Buy is a large corporation so it can probably get away with this, because eBay wants to keep them. Smaller sized sellers - not so much.
MechelleOn 05.06.2008 at 9:10 am Said:
No PayPal does not honor restock fees, but I’m sure there are different rules for Buy on this circumstance as well. I think it is safe to say that eBay’s new policies and clearly fees are solely meant for us and not any of the retail and/or large webstores.
What do you make of the announcement of there not being an eBay live next year?
LurchOn 05.06.2008 at 1:11 pm Said:
Crunchy - yep, that was my point - most of what they have in there does not lend itself to “enhancing the buyer experience” or creating “a better buyer experience.” And yeah - I was pretty certain PP would not normally honor a restock fee, nor do I think they’ll honor the defective product exchange clause in a dispute should buy stick to that, rather than the clause which reads “or at the sole discretion of Buy, the purchase price will be credited to the credit card used for the original purchase (or, if possible, through the original payment method such as PayPal).” I’m wondering if their deal with eBay gives special allowance for a lot of their TOS, return policies, etc.
They also have sections on digital downloads in both their returns and TOS, which are not allowed on eBay anymore (outside of classifieds - maybe they are also listing classifieds?).
I don’t think *this* will enhance the buyer experience, either: “9. No Responsibility To Sell Mispriced Products Or Services. Buy shall have the right to refuse or cancel any orders placed for products and/or services listed at an incorrect price, rebate or refund, or containing any other incorrect information or typographical errors. Buy shall have the right to refuse or cancel any such orders whether or not the order has been confirmed and your credit card charged.” Their stating right up front that they reserve the right to be a Non-Performing Seller. eBay is actually cool with this?
There’s also an awful lot of references to “our site” throughout their documents. Guess they’re viewing eBay as their site now.
And there’s also allowances for their third party sellers in their return policy (so it is possible all items listed will NOT just be buy’s inventory?): “For all purchases made from Marketplace Sellers, you will need to contact the Marketplace Seller directly to determine their applicable returns policy and to schedule any allowed returns. All credits, costs and expenses regarding such returns shall be borne by either you or the Marketplace Seller.”
And there’s a lot more in there that’s odd. So yeah, it really does bring into question this whole “enhance the buyer experience” bit. Anyone from eBay care to comment on some of these items? You did refer to this as a “partnership.”
LurchOn 05.06.2008 at 1:40 pm Said:
The more I read, the better it gets. According to their TOS, they seem to lay claim to copyright of “the Site” (which would be stores.ebay.com). They further state “You also agree that Buy may, in its sole discretion and without prior notice to you, terminate your access to the Site.” - So as part of this partnership, buy can suspend a user from eBay?? And the link to their privacy policy is broken in their TOS.
CarolOn 05.06.2008 at 1:49 pm Said:
eBay’s new business plan can be described in one word: BORING. Certainly there is NOTHING exciting or anywhere near innovative about eBay’s wannbe mall craving. I almost feel sorry for their lack of imagination and desperation to impress Wall Street.
DagnyOn 05.06.2008 at 2:34 pm Said:
Lurch I think perhaps Buy did not edit those TOS from their site before posting on eBay.
If not, then eBay has truly thrown its Community Values out the window.
So, eBay are you going to police your new partner?
AmberOn 05.06.2008 at 2:38 pm Said:
“I think perhaps Buy did not edit those TOS from their site before posting on eBay.”
Makes you feel real comfortable with the accuracy of their descriptions, doesn’t it 
DawnOn 05.06.2008 at 2:53 pm Said:
“So, eBay are you going to police your new partner?”
I noticed several listing violations in the handful of things I looked at in Buy’s store - prohibited links, miscategorized items, and a few listings that appear to be for ebooks, though the description was so vague, I couldn’t be sure. Of course, eBay never has policed those kinds of things; that’s our job.
AmberOn 05.06.2008 at 2:57 pm Said:
“if receiving good feedback is simply a matter of knowing the product and valuing customers, then the recent changes to feedback should be of no real concern.”
Nope, it simply means that those who truly know their niche have a greater probability of better feedback and fewer neg-happy buyers. There’s always going to be a few people who don’t understand the feedback process at all or simply can’t be pleased. And the larger volume sellers tend to have the volume to insulate them a bit.
And yes, ebay is responsibile in a great number of ways for the many jump-the-gun buyers out there. They’ve watched the trust erode on the site for years and done nothing. They encourage buyers to file disputes if they fail to leave feedback timely, then reward them with coupons for doing so. They use vague language and misuse the DSRs. Ebay is a large part of the problem–no doubt about that.
As for carrier pickup, I realize it’s not for everyone. But there are solutions for most sellers. I live in a rural area myself. Those without street delivery have to go to the post office anyway to collect their mail. If they can’t get there during the open hours, most people can use online postage and have someone else drop packages off for them.
I have to take 2 young children to the PO to mail my international packages–often during snowy conditions in winter. But I make arrangements to have my mom meet me there. I know of several disabled people who sell on ebay–they have others deliver their packages to the Post Office since they are not allowed/able to drive.
There are solutions to nearly every problem if you think creatively.
I just don’t buy most of the excuses some people come up with for late shipping.
Doctor-DealsOn 05.06.2008 at 3:59 pm Said:
The part of all of this besides the “Special Deal” for a big off eBay retailer that directly contradicts Pierre’s “Equal Opportunity” statements that bothers me the most is having Buy.com steal customers away from the eBay marketplace with their first purchase.
Buyers that would have returned to eBay for their next purchase will go to Buy.com instead because I am quite confident that Buy.com will include promotional marketing information both in the package as well as with follow up emails after the purchase under the guise of keeping the buyer up to date on the status of their order.
I have purchased directly from Buy.com in the past and the packaged contained returning buyer special offerings and the emails have never stopped since.
I see this as eBay whoring out its 200,000,000 user customer base to a rival marketplace. Many may not know, but Buy.com allows third parties to sell directly on their site, for a cut of course. Buy.com is a direct competitor with the eBay.com marketplace as well as the tens of thousands of eBay sellers that market the same products here on eBay.
EBay has invited the fox into the hen house to poach future customers away from all of us. All of that for a small cut of $750k in GMV a month??? How few buyers does Buy.com have to steal away from eBay to make this a loosing deal for everyone, eBay included? It costs eBay a ton of money to get and keep buyers, that is how they rationalized DSR’s right, and now eBay is selling them to a rival site, Buy.com, for a pittance???
Makes no sense at all to me….
DD
JewelrySellerOn 05.06.2008 at 8:41 pm Said:
Buy.com makes perfect sense if you look at it from the perspective of a key executive in a public stock company (like eBay).
As an exec, you are personally compensated more in stock and stock options than in cash. You are ‘incented’ to achieve certain ‘milestones’ such as raising the share price, increasing return on shareholder equity, etc.
As an exec, these incentives encourage short term thinking of 2-5 years - about how long the typical exec lasts at the top of a major corporation.
So, the Board of Directors incents the senior execs to make decisions which have short term goals - not to build or grow a successful business, if doing so requires risk or investment.
Execs, given these marching orders, make decisions that often are not in the best medium or long term interests of the company, its stockholders or customers.
They acquire businesses that are not a good match. They sell off assets that could be made to perform, but the risk is too high compared to the ease of divestiture. They make ‘deals’ that appear ’sensible’ in the short term (buy.com).
And, in 2-5 years, the execs are gone. They took with them ‘golden’ or ‘platinum’ parachutes of millions to billions of dollars in shareholder value. And the company they were running is usually worse off, not better than it was before their brief tenure.
CrunchyPostingGoodnessOn 05.06.2008 at 10:30 pm Said:
Amber, “I just don’t buy most of the excuses some people come up with for late shipping.”
Fair enough.
I suppose I just think differently on the matter. I do not think that selling on eBay should be demanding or difficult for those who choose to not operate as a business.
You and I make the sacrifices and arrangements we do because we are running businesses. I just do not feel that a hobby seller (using my definition) should be required to make the same sacrifices and arrangements just to sell some old household items or collectibles on eBay. eBay used to feel the same way about that too.
Either way, I think this is may just be one of those things that we will just need to agree to disagree on.
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