posted on June 9, 2000 04:29:21 PM new
"The reality is that ebay OWES US NOTHING and as soon as we realize that the better off we will be."
Amy,
Am I to refrain from writing eBay when they institute policies that make my profits smaller? Should I silently accept any tactics eBay employs that hurts me as a seller? Since they are the all powerful online auction I don't feel I have a realistic alternative of going to another service.
posted on June 9, 2000 04:51:31 PM new
toyranch mentioned:
"As the USA Today reporter told me on the phone: "This is very strange indeed. It's like Macy's putting advertising for Bloomingdale's in their stores."
~ ~ ~
PAGING MEG WHITMAN!!!!!
`````````````````````````
Dear Ms. Whitman,
It has recently come to my attention, that although eBay, Inc. is a publically traded corporation, and you, yourself, as its CEO have received accolades of pride & congrats from the Business~Illuminati for your steerage of the one online e-Biz that is never predicted to be bankrupt within one year, I want to bring to your direct attention the above quote by a newswoman from USA Today, and I insist that you reply to me by return email ASAP, why you only listened to your marketing experts and other strategic staff, drawn from the upper one-percent of the creme-de-la-creme of the entire business world, who have beaten down the doors of eBay, San Jose Corporate Headquarters, in the hope of having their resume at least touched by YOU, although of course not read.
Why did you, of all people, (slated to be written about in all future economic history textbooks), not ask this reporter to advise you. Huh?
Maybe, Meg, you realize ny now, as it is reported that you are pretty gosh darn perceptive most of the time, that this isn't really a "real" email, but my pathetic attempt to write you a Troll Email.
Hope you enjoyed my attempt and that you appreciate my lousy sense of humour.
Have a nice weekend, and I need not advise **you** to not accept any wooden nickels, huh!
posted on June 9, 2000 05:19:30 PM new
amy happened to mention the obvious:
"When ebay gives in to OAUA's demands and stops the banner ads and turns to increased fees to cover the loss revenue those ads generate, will OAUA be charitable and help the poor sellers who are driven out of business by the added costs of selling on ebay?"
~ ~ ~
Good question, Amy!
Does the OAUA harbor an agenda to encourage eBay to raise listing fees? If so, why?
How high would listing fees have to be quadrupled-to-what-power in order to offset these advertising revenues?
And if the OAUA claims that this is really a serious issue, detrimental to all sellers and all buyers, why were they totally unconcerned with this issue years ago, which to me, looked like a certain inevitability ever since I saw the question very first posed in an eBay survey years ago?
posted on June 9, 2000 05:26:48 PM new
kerryann asked about actual REVENUES on the eBay earnings statement:
"The USA Today article states that the seller revenue is the bulk of eBay's revenue."
~ ~ ~
Please notify the journalist that the eBay earnings statement, just like all earnings statements is available online, and that perhaps if she finds someone who reads english, she will learn that ALL ANALYSTS, globally have said again and again and again, that although eBay would show LOSSES these past several quarters were it not for the INTEREST they earned on their hard cold CA$H, that nonetheless, they believe that eBay has a positive chance of succeeding, unlike 70-95 percent of other online e-bizzes.
This information has also been on teevee, again and again and again, ad infinitum.
posted on June 9, 2000 05:52:46 PM newUARU, I agree with your assessment. I am unhappy that eBay has taken to spreading misinformation about their actions. This is another step in the wrong direction.
Toyranch, you are correct. Banner ads in general may not work, but in this case we have a potential customer, with cash in hand, who is intercepted on the way to my auction by advertisements for similar items on another site.
Amy, you make some very good points, but you overlook some as well. You are willing to acknowledge eBay's right to operate their business as they see fit, but you would deny a coalition of sellers their right to exert pressure on their own. I enjoy reading your posts and agree with most of what you say, but on this issue you seem to be 100% on eBay's side and against ANY sort of dissent. I don't understand this.
In order for there to be a contract between two parties, both must understand and receive what they bargained for. eBay is changing its face and its mission. Customers (sellers) like me who joined back-when took eBay at its word that they were committed to builing an online community based on person-to-person trading. Now, apparently, decisions made in smoke-filled back rooms by corporate execs have caused eBay to abandon its mission. The answer "Buck up, that's what capitalism is all about" doesn't suffice.
Whether or not eBay can get away with this legally, I find it morally and ethically reprehensible. As far as I am concerned, eBay has violated their end of the agreement by deliberately advertising competition from big businesses, especially when using the results of bidder searches to determine banners.
posted on June 9, 2000 06:20:20 PM new
I went to the URL posted to read the article in USA today--but as soon as I got there I saw a banner that said there is $5 off at Tower Records--and I clicked through.
cybercat
--
What if the Hokey Pokey really is what it's all about?
posted on June 9, 2000 06:29:34 PM newcybercat -- thanks for the grin!
radh -- the OAUA BOD, as has been mentioned here several times, tries quite hard to work on those issues which are of importance to most OAUA members. This banner ad issue is one such issue. Why weren't we (the OAUA BOD) up in arms about this years ago? I'd suggest that it might possibly be because we didn't exist years ago -- indeed our first anniversary as an association will occur on 1 Sept.
Does the OAUA have a secret agenda to raise eBay fees? Heavens, no! Indeed, I suspect that were eBay to announce a quadroupling of eBay fees (I know I say someone use that as an example somewhere), our members would again email us in droves with their displeasure.
(I'm off for the evening; though I rather doubt y'all have any direct questions for me, I did want to explain that any lack of response is more indicative of the fact that I'm ill and headed to bed than of the fact that I'm ignoring anyone!)
--xifene--
http://www.auctionusers.org
posted on June 9, 2000 06:44:10 PM new
>>>The reality is that ebay OWES US NOTHING and as soon as we realize that the better off we will be.
_____
You are entitled to your opinion. My personal opinion is that this is a shortsighted, possibly Lochnerian view. eBay and other large Internet businesses will influence the whole structure of the Internet and how it is run. If users don't challenge things now, they won't be able to challenge later.
I would draw a parallel with the growth of the railroads in the U.S. Sure, the RRs were a private business and didn't owe anybody anything either, but their actions influenced many other activities.
________
I never had one, and I didn't want one, and I don't, so now I do...
posted on June 9, 2000 06:52:53 PM new
At such time in the foreseeable future that eBay is adjudged to be a public UTILITY in the sense of the railroads or electric companies, due to its venue providing at least a portion of the livlihoods of millions of people, then we will have to contend with governmental regulations.....and can then chat about the good ol' days when we argued about banner ads.
XIFENE: I hope you feel better soon. I suspect that these banner ads are eBay's valiant attempt to keep from substantially increasing listing fees at this time.
posted on June 9, 2000 07:13:12 PM new
Whether regulation is or is not inevitable, if users don't express themselves they'll get regulation that eBay Management wants due to eBay Management's lobbying $$$. So now is the time to be heard, even if it's just a post to a board like this.
________
I never had one, and I didn't want one, and I don't, so now I do...
posted on June 9, 2000 07:32:44 PM new
Although that judge ruled in favor of eBay and told Bidder's Edge that its bots were tresspassing and to cease, well, fact is that the Department of Justice was reported in the news to have interviewed both Bidder's Edge and Auction Watch, as part of its investigation to determine if eBay is a monopoly.
How much money did Microsoft spend defending itself, already, and does anyone have any idea how much money eBay must have in its coffers in case they, too, are adjudged to be a monopoly engaging in unfair business practices?
Also, in that FBI Probe on shill bidding, is there any way that eBay can be held responsible or negligent if anything comes of that probe about the guy who bid on his own painting auction?
posted on June 9, 2000 07:45:11 PM new
It's been a long time since I took an economics course (and they were far from my favorite courses) soooo .. can someone please explain to me in understandable terms why ebay fees would go up as a result of a larger base of sellers/buyers. Per 'unit' expenses should be going down for them shouldn't they? Not every new seller/buyer increases costs .. seems (simplistically)that more people utilizing existing services/servers/etc would drive the per 'unit' cost down. What am I missing?
The Queen of Mixed Metaphors
posted on June 9, 2000 07:53:18 PM newradh You have been making some points about banner advertising not being successful, etc. and I replied to your post. You were posting about the same thing the other day and I spent some time considering your position. After my fairly detailed reply to your points, you came back to satirize my post of a quote from a reporter who covers technology businesses for a major newspaper, and my mention of it in a letter to Meg Whitman. Is the opinion of someone who does internet business analysis and reporting for a living without merit?
Note, she did not state that it was a bad strategy from ebaY's point of view. She just said it was strange.
Sorry if the opinion of someone else who covers internet businesses for a living offends you. Or if it was my mention of it, sorry about that too. I am not sorry I posted it though, just sorry you feel so strongly about the posting of it. I am wondering WHY..... That can be left as a rhetorical question if you desire, but if you want to talk about issues, and not the opinion of someone who is not here to explain their position (possibly that issue has been covered now?), let's move to the other points.
What about the success rate of TARGETED banner ads? And what about the way the advertisers offer perks that ebaY sellers cannot offer?
Every MBA student studies the A&P case, or the Kenmore case. A&P would go into a small venue and offer suppliers much higher prices for their product (better deals) in order to stock their shelves. The farmers (in this case) sold all their stuff to the big new store, thereby putting the Mom and Pop grocery store out of business, as they couldn't afford to pay inflated prices.
Then, after Mom & Pop went out of business, A&P renegotiated their deal with suppliers, greatly lowering the price they would pay for products. The small farmers, being unable to settle for pennies on the dollar also went out of business and were bought out instead by A&P for pennies on the dollar.
This is also how the independent company of Kenmore became part of Sears. When you think of this in terms small sellers on ebaY, it gets real personal!
Advertisers are offering price incentives in the form of discounts. They are offering free shipping. And if they are doing that ON SITE and they are doing so at a critical time. Right at the search.
When ebaY told us to take advertising banners for our websites, etc. off our item pages, they gave us this reason:
"An advertisement should not appear on the item page because it only serves to distract a potential bidder at a critical point where they may be deciding to bid on your item or link away from eBay. "
Is the search process less critical? Really? I submit there is really little difference as the 'critical' issue on the item page is whether or not buyers will link away to the seller's personal website to make a purchase, and the 'critical' point at the search page is whether the item will be purchased on ebaY, of off ebaY from an ebaY user, or a big business.
And if banners are so ineffective, then answer me this:
Why was it thought to be important to ebaY for sellers to remove banners from their item pages?
And if the marketing departments of these large companies are so much smarter than the rest of us, to the extent that our analysis of these issues is invalid in the face of theirs, then how can banners be ineffective, and still be worth $4 million to $5 million a year to the advertisers?
posted on June 9, 2000 07:54:56 PM new
Nobody stated that fes would increase due to the mammouth increase in users on eBay.
In one article, though, I did see it explained that it costs the same to host an auction which earns a FVF of $0.26, as one that earns $26.26.
In the last several earnings reports, the only reason that eBay did not show a loss of monies, is that it earned INTEREST off cash, and those interest monies offset what elsewise would have a negative earnings report.
posted on June 9, 2000 09:45:11 PM new
There are several business reasons why eBay's fees might increase as a function of new user base. First is capacity; it is likely that to serve many new users, eBay's capacity in many areas (from physical server space to customer service) must increase. Capacity is costly, and if you're going to add it you need to make sure your base is going to stay around or you will have spent money needlessly.
Second is increased demand for services by users, or a need to keep offering new services to keep users interested - sort of like fast food places have to come up with a new special every couple of weeks.
Third is the mere fact that, as one of my profs just told me a couple weeks ago, when it comes to internet businesses "amateur night is over" and it's time to actually produce something. For eBay this might mean showing they can turn a profit off actual users and not have to rely on investments. The low fees up to this point might be understood as a "first taste free" to get new users hooked, then jack up the price, work to cut out unprofitable users (like those 26 cent people) etc.
________
I never had one, and I didn't want one, and I don't, so now I do...
posted on June 9, 2000 10:02:41 PM newAMY: When I use to argue the need for a Professional Online Sellers Association, I had hoped it could be proactive, keep an eye on online auction developments, and hopefully assist sellers in meeting the demands of the ever-changing cybereconomy.
As people are up in arms over a *done deal*, something that eBay surveyed us about, many times, let me tell you what I believe to be the immediate danger for online sellers at eBay, although I *do* realize you didn't ask me.
LOL
Amazon is now going to auction of liquidated merchandise, and it is also planning to host live auctions of offline auctioneers.
These plans bother me, not because I believe that Amazon will be any more successful in this than they are in accruing an positive earnings statement; what boters me about these developments is that here you have a money-rich corporation which has decided to devote time and energy to what, in effect, is buying up the supply of merchandise that the liddle online auctioneers frequently depend upon to stock their inventory.
This, I believe, is a truly serious development, and if history repeats itself, although I do not expect Amazon to be financially successful, it is possible that for alot of folks who have supported themselves at online auctions will find that they cannot find any merchandise to list online.
Another recent development that I predict will irretrievable alter the entire landscape of online auctions will be the three new co-branded websites opening this fall, where Disney, ESPN and ABC will auction off authenticated memorabilia on eBay.
Here are some news articles I urge you to read:
~ ~ ~
This Bidding War Has No Losers
[b]~Web Sites Woo Old-Time
Auctioneers[/b]
By Michael Laris
Washington Post Staff Writer
Monday, May 29, 2000; Page B01
"In exchange for the NAA's [the National Auctioneers Association] endorsement of Amazon, the company would fund an effort to get NAA members to put their auctions on the Amazon site, Roebuck said. The idea would be to bring some of the excitement of live auctions, complete with the rolling tongues and charisma of traditional auctioneers, online."
"Here's a dirty little secret: there's a new strategy among retailers that's becoming increasingly popular -- dumping ... overstocked goods at online auction houses."
posted on June 9, 2000 11:05:20 PM new
I've been wondering all week about something which I haven't observed being discussed yet.
The information we have from the announcement board states that :
Last year, we recognized that we had to vastly increase investment in our technology and our customer support infrastructure to support the needs of our growing community.
The information that I received in an e-mail from eBay states:
The main reason for having this banner advertising is to generate additional revenue. This pays for site improvements, maintenance and growth of our infrastructure, and general site operations.
What I'm wondering is, from what eBay is saying above, the income they receive from our listing fees and final value fees isn't enough to allow them to keep up with site improvements, maintenance and growth.
In a nutshell they need more $$$.
This has been troubling me.
If I'm understanding correctly, some posters have stated that eBay's main income this last year has come from interest and not from actual receipts from sellers.
What I want to know is where all the money came from to purchase Kruse, to purchase Butterfields, to purchase Blackthorne Software, to purchase Billpoint, etc. etc. etc.
Did that money come from our listing and final value fees???
Where did the war chest come from that allowed eBay to acquire all these entities?
Was it more interest income?
Did money which we as sellers paid eBay in fees get funneled into other enterprises instead of being used for site operations? Are those enterprises self supporting? Are they making a profit for eBay? Are we as seller's indirectly subsidizing eBay's recent acquisitions?
I'm hoping maybe someone can tell me where those funds came from, so I'll quit wondering if my eBay fees were used for expansion into areas other than those which benefit me directly as a seller on eBay.
If the funds for the recent acquisitions eBay made came from our seller fees, (and as I can't for the life of me see how the acquisition of Butterfields is an integral cog in the maintenance and support of an auction site) ... somehow I feel it is disingenuous of eBay to imply that we as sellers aren't contributing enough to keep the site going, and that they need more $$$ to do so (which will be obtained at our expense).
posted on June 9, 2000 11:22:44 PM new
heartsong, I would suggest that for the answers to your questions you begin with the Annual Report on eBay's web site (under the About Ebay tab). It discusses things like how the acquisitions were funded (mostly stock exchanges and pooling of interests, which is the way companies like to handle things). Although you probably need some courses in acct and FSA to get all the fine points, you can usually get a rudimentary idea of what is going on from the annual report, and I would urge everyone to take a look.
________
I never had one, and I didn't want one, and I don't, so now I do...
posted on June 10, 2000 12:16:18 AM newand he notes
The brouhaha over banner ads is not a "tempest in a teakettle" as Carpy would say. It is a genuine dilemma with far reaching ramifications. Banner ads that tout stationery and auto parts are only the beginning.
Not all banner ads will cost millions of dollars. If eBay's marketing people have done their jobs, banner ads will be priced on the amount of repetition in any given time slot. i.e. a Staples ad would run during prime hours at a premium, but the slow hours would sell for much less.
Until the prime time ad slots fill, the "junk" time will go for a bargain. Banners for antique bazaars, toy train dealers and beanie babies will be economical for chain outlets It's only a matter of time until eBay becomes eBiz and "so long seller" (rhymes with a fish), we made our money". And perhaps complacent people such as Amy can find another hobby to pursue.
posted on June 10, 2000 05:17:36 AM new
Good article. Glad you guys surf the web & find all these nice articles for us. Also Amy has a good point. If they get rid of the ads & if the decide to up the fees to increase their income, who is going to pay for my increse in fees. I can afford 25 cents but I sure can't afford 50 cents for all my listings. Some of my auctions start at $5+.
posted on June 10, 2000 06:13:52 AM new
Re: Fee increase...
From ebaY's 10-K filing for the quarter ended 3/31/00
Page 23
"The existence of several larger and more established companies that are rapidly enabling online sales as well as new companies, many of whom do not charge for transactions on their sites and others who are facilitating trading through other pricing formats (fixed price, reverse auction, group buying, etc.) limits our ability to raise user fees in response to declines in profitability."
It appears that ebaY does not consider that a viable alternative. They understand that we would just leave.
I don't have a problem with ebaY making money and being profitable. On the contrary, that MUST happen to make this viable for all of us and for them. I WANT ebaY to be profitable, I just don't want them to sell us out to get there.
ebaY paid hundreds of millions of dollars for Butterfields, Kruse and Billpoint. All of them are losing money. ebaY signed 100million worth of advertising deals to bring new users from AOL and GO.com.
Maybe SOME of these deals were, in hindsight, not so good. Maybe they will develop later. But right now, they want to sell out the users base to add $$$$$$$$ to the bottom line right now.
I don't have a problem with ebaY advertising onsite. There are MANY businesses ebaY can create ad deals with that would benefit ebaY and users, as well as the advertisers. The only issue I have is with competitive advertising. Advertisers that compete directly with users. I feel that is in the best interest of ebaY, the community, and the future for all of us.
And if ebaY want to develop as a Business-to-Consumer trading platform, then they need to tell us. As a publicly traded company, they are required by SEC regulations to disclose that information publicly to stockholders and potential investors. This means making it available for everyone to see. Then I can make plans regarding my small online business, and how it's future is tied to ebaY.
posted on June 10, 2000 02:31:53 PM new
Another article I posted a link to elsewhere stated that the current click through rate for banner ads is at less than one-third of ONE percent...
Forbes.com: 2/18/00 -
News: Banner ads get sexy
By Marius Meland
"The online advertising industry claims low click-through rates don't really matter because banners aren't used only to sell products, but also to create brand awareness. However, many analysts remain unconvinced by the banner ad's potential as a branding vehicle."
I already discussed why this is different from OVERALL banner ad clickthrough rates. They are targeted ads. Most banner advertising is not targted to compete with the website hosting the ads. Quite the opposite in fact. The clickthrough rates will differ substantially. You seem unwilling to discuss the issues.
Here is another issue about banner ads. As long as we are comparing news stories.
posted on June 10, 2000 05:25:22 PM new
dottie: LOL! In fact, in the entire history of banner ads, only one showed any success whatsoever, and I don't remember the details, but it was something about naked people and it got a 26% click through, but it was years ago.
posted on June 10, 2000 06:19:25 PM new
If many of you plan ahead, start planning to list on other smaller sites!! ebay as we know it, is a dream of the past. I still think they are building it up up up so that it will be bought out!!!
