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

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126 Responses on this post. Click to add yours.

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DaveyOn 05.11.2008 at 6:22 pm Said:

I’m a bit late on this thread, but I find it extremely interesting that BUY.COM is the partner chosen to represent a good buyer experience. This just happens to be the only online commerce company that I will NOT do business with anymore as they may have the only customer service organization that is worse than eBay’s, and the most pathetically slow shipping of all the major players (although budget shipping is free). Need help or have questions to ask about the merchandise? Forget it, unlike smaller sellers on eBay who take pride in their wares.

It will be interesting to find how the feedback and DSR numbers get massaged and if there is any side “deal” to adjust those numbers that we general users don’t know about. Of course, my guess is that their contract fees are quite a bit less than us unwashed masses.

I also wonder why anyone would come to get buy.com’s stuff at eBay rather than BUY.COM’s site itself?

Doctor-DealsOn 05.15.2008 at 4:26 pm Said:

Buy.com “BUY” now has over 424,000 active listings on eBay right now. Over the past 90 days or so they have listed over 110 MILLION items in over 1 MILLION individual listings. Almost all of which were 1 or 3 day Fixed Price Multi-Item CORE listings. Listings that would have cost every other seller on the marketplace between $3,000,000.00 to $4,000,000.00 to run in CORE. An amount far less than even Buy.com’s total sales in this period were.

So unless Buy.com is in the business of spending more money on eBay listings than it generates in total sales, Buy.com is listing TENS OF MILLIONS of items in eBay CORE each month for basically FREE. A “Special Deal” no other seller gets and a distinct marketing advantage over ALL other sellers. The facts and figures DO NOT LIE, at most, Buy.com is paying a penny or two per item listed while the rest of us pay dollars per item to list in CORE.

787 of Buy.com’s active listings compete directly with me in one single category, External Hard Drives. My hundred or so active listings in this category that I spend thousands of dollars a month to list up against 787 FREE or nearly FREE active listings from an internet retailer handpicked by eBay to drive me out of business. Buy.com gets to save over $30,000.00 a month in listing fees to keep just these 787 items running in the category. Because of FREE listings in the CORE search from Buy.com my sales in the category have dropped and Buy.com’s have increased. How am I supposed to compete with a $30,000.00 monthly listing subsidy from eBay to Buy.com?

Let Buy.com compete with me fairly head to head and pay for their listings as I have to. Or eBay, let me list in core for a penny or two per item. Either way works for me, but in a category like this where margins are razor thin, don’t give my competitor a $30,000 a month subsidy so they can run nearly FREE listings at any outrageous volume they want to smother my listings. In fact in the subcategory Buy.com lists in there are only 2179 active listings so their 787 listing represent about 36% of the offerings. It looks a lot like an overwhelmingly disproportionate share of the market for a single seller to have. What about the “Finding Experience” when buyers only have one major seller taking up so much of the category?

EBay, I implore you, make the terms of your “Secret Back Room Deal” with Buy.com public. Rebalance the playing field so Buy.com does not keep sucking business away from 99.9% FB sellers like myself because of their unfair advantage. This is not the type of “Reward” a long time Top Seller like myself deserves.

Thank you,

Doctor-Deals

MechelleOn 05.15.2008 at 6:10 pm Said:

I’m sorry eBay is treating you so terribly- what a slap in the face. Some people just lack basic ethics and any integrity. I am personally an atheist, but if I’m wrong I know where these people are headed, and I find pleasure in the thought.

How can some people be so terribly cruel- I cannot imagine what could be inside these people that makes them feel it is ok to treat people this way.

Of course, the hypocrisy in expectations of customer service is rich in their actions

eBay- you people are rotten to the core- you really should not be allowed to impose your poison on the rest of society. Really you all should be locked up with the other social deviants.

Richard I know your going to take this out, and that’s fine. However, I think you are a good person and it saddens me to know that you will wear eBay’s putrid reputation from here on out in your career. eBay Inc. is no longer a positive perception to the general public or the eBay marketplace.

You should seriously consider if you want to be a party to such inhumane actions toward other people who clearly deserve so much better. Only a cold B****** would read that and not see he is being treated so wrong.

I know some unethical- immoral- inhumane people couch everything in the “it’s a business yada yada crap”, but the truth is eBay is a business, but it’s management act like demons. There is a difference between being a business and being successful- eBay had the success before, but some how the culture of the company, the humanity- just got taken over or was replaced with the ugliest people I have ever seen, heard of, or imagined possible.

My point - consider who it is you associate with, because they shape your public appearance, and I don’t think you want to be viewed the same as eBay. For eBay management it really doesn’t matter as far as they are concerned, but your job is public and if eBay erodes your credibility where will you go when it’s over. No one is going to pay a blogger the big bucks if the public has a sever distaste of the individual.

Doctor-DealsOn 05.18.2008 at 10:39 am Said:

@Richard

A little bit of an update:

The latest data, Week of May 6th - May 12th, has Buy.com listing over 83 MILLION items in eBay CORE in just 7 days for FREE or nearly FREE.

And while their sell through rate on those items dropped to about 0.02%, that is still almost 16,000 transactions where the former active eBay buyer is now going to be incessantly bombarded to become a direct Buy.com customer.

If you have ever bought from Buy.com you know that they send constant, almost daily emails, as well as direct mail offerings once they have a buyer “hooked”.

EBay is basically selling hard earned eBay active buyers off to a competing web site, Buy.com, for a pittance, what eBay might be getting as a FVF on the sale.

I imagine it cost eBay 5-20 times as much to have gained those customers in the first place compared to what Buy.com has acquired them for poaching them on eBay.

I am quite confused why eBay would want to sell off 16,000 active eBay buyers a week, as many as 800,000 a year, to a competing online marketplace like Buy.com.

And at this pace it looks like eBay is giving Buy.com about a $170,000.000.00 listings subsidy annually to flood eBay with items that do not sell 99.98% of the time.

That looks exactly like the “Disaster” in the making that Pierre told John Donahoe would happen if eBay went down this path of “Secret Back Room Special Deals”.

http://ebayinkblog.com/2008/04/29/john-donahoe-interviews-pierre-omidyar/

“Level Play Field” - “Equal Access”….ONLY if you are a competing online marketplace with a few hundred million dollars in annual sales….NOT for long time trusted eBay sellers!!!

Richard, can you get any comments from Pierre, John Donahoe and Lorrie Norrington about the “Level Playing Field” - “Equal Access” & “Losing 16,000 Active eBay Buyers Per Week to a Competing Online Marketplace Like Buy.com” aspects of this “Special Deal”? I would like to know if they share any of the eBay seller’s concerns on this.

Thank you,

Doctor-Deals

PS: Oh, and if I could get that $170 MILLION a year eBay listings subsidy as well, that would be cool to!

BiggfreddOn 05.19.2008 at 12:01 am Said:

EbAy is trying to be like Amazon.

Amazon learned their lesson when they got into bed with Toys-R-Us.

Some people learn by watching others, some have to pee on the electric fence for themselves.

BiggfreddOn 05.19.2008 at 4:32 am Said:

“What Pierre is really referring to, in the above quote, are the special privileges, discounts, and search rankings awarded to Power Sellers over other everyday sellers. He believes that eBay allows everyone the opportunity to become a Power Seller”

The only way to become a parfulseller is to sell a bunch of stuff and keep customers happy.

If you’re not a parfulseller, there’s a man standing outside your store telling potential customers the store down the street has what they want, and that you might not be reputable. The store down the street also gets a better deal on the rent.

I don’t see anything level about that, nor do I see where it’s anything like Amazon, the company that many are saying ebaY is trying to imitate.

On Amazon, whoever has the best deal gets the best placement. I have even been given top placement over Amazon itself. Amazon posts FB, too, but instead of warning people that a 4 out of 5 indicates a bad seller, it lets people know that they can order in confidence, because the transaction is guaranteed BY AMAZON, regardless.

BiggfreddOn 05.19.2008 at 11:16 pm Said:

“[removed instructions on how I can report those 6200 other listings, and "It can take up to 72 hours for the Community Watch Team to investigate your report."]”

I don’t understand why ebaY has to rely on complaints from users. Don’t they have anyone there smart enough to type “like new” in the search box and find the offenders themselves?

DaveyOn 05.23.2008 at 7:43 am Said:

I find it interesting with all of eBay’s harping on cross-border selling (including the new fee for international exposure), that Buy doesn’t even ship to Alaska or Hawaii, let alone international, on all the items I checked. Great partner, eh?

Patricia1On 05.23.2008 at 9:37 am Said:

“On Amazon, whoever has the best deal gets the best placement. I have even been given top placement over Amazon itself. Amazon posts FB, too, but instead of warning people that a 4 out of 5 indicates a bad seller, it lets people know that they can order in confidence, because the transaction is guaranteed BY AMAZON, regardless.”

As a buyer on Amazon I can vouch for the fact that the best prices are given priority - the seller himself doesn’t count in that placement….also that they stand behind the transaction. The one problem I had with a transaction prompted a call FROM Amazon (withing 5 minutes of me leaving a complaint and my phone number) and the first words were “don’t worry, we back everything 100 percent and if you don’t get your item you’ll receive a refund within two weeks”. Thems powerful words to a buyer - words that you just do NOT hear from ebay in spite of all their fancy footwork and their fancy ratings system!

Alan WelchOn 05.27.2008 at 4:14 am Said:

Someone PLEASE…Give me the alternative to selling on eBay! We all want, need, desire the ability to make a “living” outside of the JOB we have, eBay was the vehicle to make the change and from what I gather it will no longer be that vehicle.
So… where is the bus to the new “eBay” that we want! I need a ride!
I sit here with shelves full of inventory (No, I am not a large eBay store with thousands of dollars invested)that I need to move to recoup my small (yet still important to me) investment!
Mr. Wizard!! I don’t want to be an eBay statistic anymore…..!

tomOn 05.27.2008 at 10:50 am Said:

The “level playing field” ended the day ebay took away a seller’s right to leave neutral or negative feedback to buyers. A buyer’s feedback now has no meaning, so I predict a sort of wild west atmosphere from now on where anything goes. I saw one buyer in the ebay Communities forum that left 12 negatives for sellers the day this policy started in response to the negatives he had received in the past. And regarding ebay’s decision to stop digital download sales (except for a $9.95 month “classified ad”), the Information Age we live in took a giant step backwards.

tomOn 05.27.2008 at 9:19 pm Said:

There are many alternatives to Ebay. You could try an auction site where many auction sites are networked or partnered together like Bidlynx.com. If a few thousand people would just post their used items lying around the house, it could get a site like this off the ground.

Patricia1On 05.27.2008 at 9:56 pm Said:

Tom - I don’t know what you sell but I believe your best bet is to spread your stock around. There are plenty of up and coming sites that don’t even charge a listing fee. I’m not allowed to list them here but ask around - others know them well. Remember the economy is taking a hit now…this was the absolute worse time ebay could have made these changes. Its made matters a lot worse. I’ve got 3 listings left on ebay and when they’re done…I’ll turn my attention to my own website. I never believed I’d see the day when my website got more hits then my ebay listings! So, look around - don’t stay and keep wasting fee money.

MechelleOn 05.27.2008 at 10:11 pm Said:

@Alan

go to the powersellers unite look at the different auction venues and pick the one with the most listings (not ioffer). You get traffic with keywords- that is why there is traffic on eBay- it is only because we list our stuff creating the keywords for search engines to find us. So if you add your stuff to the most populated of the alternatives you will benefit from all the listings (keywords) that the other sellers have provided, and they from yours.