Online auction sellers around the world got a shock last week when eBay announced it would raise eBay Store fees next month, and made it clear it would continue to limit Store listing visibility on the core eBay platform. In fact, eBay will begin favoring core-platform listings over Store listings on its new eBay Express marketplace. (Read "eBay Raises Store Fees, Announces 20-Cent Listing Day Promo," (http://www.auctionbytes.com/cab/abn/y06/m07/i20/s01) and "International Fallout over eBay Fee Hike," (http://auctionbytes.com/cab/abn/y06/m07/i21/s01.)
In light of January's announcement that eBay would increase visibility of Store inventory and promote Store listings through eBay Express, it was like having the rug pulled out from under Store owners. I'm still perplexed at the abrupt turn-around in strategy, and admit that I had seen no signs of things to come while at eBay Live in June.
For eBay Store owners who are wondering what they should do in reaction to fee increases, I asked a few people who are in the business of writing and training eBay sellers on how to sell more efficiently. They had some interesting things to say, and you'll find their thoughts in the first article in today's issue.
eBay President and CEO Meg Whitman told analysts last week, "The marketplace has been overwhelmed with identical, often poorly-priced items that have diluted the magic of the eBay experience." After reading that and watching Meg on a CNBC video interview (http://digbig.com/4mbeq), I just wasn't sure whether eBay was committed to Stores and eBay Express.
On Friday afternoon I received a call from Bill Cobb, eBay's President of North America, who had read my blog post containing some initial thoughts about the fee hikes (http://digbig.com/4mbmj). He said eBay Stores remains an important format, as does eBay Express.
One of the things that confused me was eBay management's seemingly sudden epiphany about eBay Stores. The change in messaging from eBay from January/February to last week was striking.
Bill Cobb said eBay did indeed understand the role of auctions and Stores, but things reached a "tipping point" in mid-February where the amount of inventory began to overwhelm the site, the core inventory. He said while large sellers continue to get a large percentage of their of sales from auction format, some sellers were starting to use only the Store inventory format.
Something Bill Cobb mentioned was metrics of Stores versus auctions. It's worth quoting Meg Whitman in her call to analysts about this issue:
"With regard to the demand side, actually, I think that the demand is still there. But as we shifted the balance, what we did see, as I said in my opening remarks, fewer return visits, higher exit rates, fewer bids per listing. That's because on fixed price items in core eBay, you don't get the watching, you don't get the outbid notices, you don't get people coming back as much. As a result, I think that's why you saw a slower GMV rate, growth rate, than we might have otherwise anticipated. So I think the demand side is there. I think we just have to get the right inventory on the site in front of the right people. I have confidence that we are going to do that."
What jumped out at me was the mention of "outbid notices." With auctions, eBay has a way to continually market to buyers via email, without it being called Spam. eBay Stores has no such mechanism in place to remind people to revisit the site. Could this be one of the keys to getting eyeballs to eBay?
Todd Lutwak, eBay's Senior Director of Seller Development, was also on the call, and his advice for Store sellers is included in today's first article.
Also surprising sellers last week was the reality that they would have to share eBay real estate with Yahoo paid-search advertisements (http://auctionbytes.com/cab/abn/y06/m07/i19/s01). Combined with the Store fees increase, it was a very unsettling week for sellers.
I received a book earlier this year called, "How to Make Money Online with eBay, Yahoo! & Google" by Peter Kent and Jill K. Finlayson. The authors divide the book into three sections: Building an eBay Business, Building Your Yahoo Store, and Using Google Pay Per Click and More to Grow Traffic. That sounds like a great strategy for serious online sellers, so I was intrigued.
I decided, with permission from McGraw-Hill, to run Chapter 22 in AuctionBytes. It's called, "Google AdWords and Other Pay Per Click Programs" and is an introduction to paid search ad programs. I'm dividing it into 3 sections, and running Parts 1 and 2 in today's issue. I'll run Part 3 (with great advice about keywords) in the next issue.
If you've always wondered what the fuss was about paid search, or want to know how to run a more effective paid-search campaign, I think you'll find it quite timely and very useful.
As I mentioned in the last issue's editorial, Google Checkout has launched. Since then, I had a chance to speak to Benjamin Ling, the product lead for Google Checkout - see the interview online (http://www.auctionbytes.com/cab/abn/y06/m07/i18/s03). Part 2 of the interview will run in this week's Newsflash newsletter.
I am writing an article delving more into fraud-issues for online sellers who use Google Checkout, and I'm waiting to hear back from Google with answers to a few more questions. (Please remember, eBay does not permit sellers to use Google Checkout on eBay.)
I sympathize with eBay Store merchants who have to rethink their selling strategies yet again. I'd like to hear your thoughts on your strategies going forward and what you think the implications are of eBay's "rebalancing the marketplace" message:
http://www.auctionbytes.com/forum/phpBB/viewtopic.php?p=6482346
Thanks for reading.
About the author:
Ina Steiner is Editor of AuctionBytes.com and author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). She has a background in marketing and research in the high-tech and publishing fields. If you have story ideas, comments or questions, send them to ina@auctionbytes.com.
