eBay couldn’t force its Australian sellers to use its wholly-owned PayPal payment service, but that’s not stopping them from trying the same trick in the US.
I wrote about this previously, though I didn’t mention that eBay gave up in face of such clear opposition — the 700+ submitters and the ACCC, that is, not me! However Lauren Weinstein writes that in the US eBay has announced that PayPal (or credit cards) are to be the required mechanism for all transactions.
He says:
eBay is also making other changes to de-emphasize auctions entirely by making fixed-price sales more attractive — essentially undermining the basic auction model on which they built their business, and turning eBay even more into Just Another Online Store in many respects.
There are numerous alternatives to selling on eBay. I’ve wondered why so many eBay auction sellers have been willing to be fleeced for so long by eBay’s increasingly callous practices toward this bedrock group.
However as Scott Howard observes:
The difference is that in the US people probably won’t notice or care if this goes ahead.
Banking in the US is for the most part years behind where it is in Australia — and the concept of transferring money into someone else’s account is completely foreign to almost all Americans, and Cheques (err… checks!) still rule as the primary form of payment for anything other than small payments.
Even EFTPOS is only just starting to take off — and then only by banks marketing the cards as “check cards” (which are generally actually just Debit Visa or occasionally Mastercard cards).
The nett result of this is that the vast majority of sales on eBay in the US are already either PayPal, COD or occasionally (non-PayPal) credit card. Without the additional option of a fast/free/easy payment method like direct deposit, PayPal has already won here.
Hat-tip to Professor Roger Clarke.
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Tags: accc, ebay, lauren weinstein, paypal, roger clarke, scott howard
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Sellers DO care about this. Its the latest move by eBay to grab even more revenue. They have the audacity to tell sellers that they can take “some” paper payments but if they make a habit of it (veiled threat here) — like its up to sellers what type of payment they happen to get? eBay really showed the stuff they’re made of with this one. All this while they hid behind “enhancing the buyer’s experience” and making things easy and safe for buyers… ad nauseam, when in reality this move is clearly just to grab extra revenue. It will ban a lot of elderly who do not trust putting their credit info on the internet (no matter how safe eBay says it is) and also the low income people who save to make a purchase but have no real credit. eBay doesn’t care who they crush or who they trounce over — all they can see is their own immediate need for revenue and making the next quarter look good!
Small sellers left in bunches and will still leave because the hold eBay has on them and their business is forever tightening and making it impossible to conduct business on the site. They have been strapped by eBay’s last fee “decrease” and of course the price of their wares had to go up accordingly. That means less bargains for buyers and that means less buyers! eBay, in its infinite wisdom has yet to figure out that eBay is a circle of sellers — buyers — buyers — sellers. They broke that circle when they made it almost impossible for small sellers to peddle their wares. With this new wave of nonsense expect the site to be glutted with anything and everything… except new buyers. Now they’re going to tie standings in the listings to free shipping! They haven’t taken enough of a seller’s profit… now they expect more or they will bury him in the listings! It won’t be long before eBay realises trying to be a cheap cheesy imitation of Amazon by beating services out of sellers just won’t work!
One last thing… AUCTIONS ARE NOT DYING… EBAY IS KILLING THEM OFF!!!
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Cue Alex, stage right.
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@Patricia013: You’re right one respect: eBay, like any marketplace, is a community of buyers and sellers as well as a venue for them to operate in. But it’s not as if eBay is the only marketplace in the universe. If eBay is so terrible, and the sellers reckon they could do it better, why doesn’t the community of sellers set up their own marketplace instead of just whingeing?
This was discussed at length in the comments to a previous article:
A copycat will always have a simpler task than the originator, simply because the hard work of figuring out what to do is already done. After that it’s “just” coding. That said, for something on the global scale of eBay you need to program robustly and with the ability to scale massively. That’s a systems architecture issue as well — although these are known and solved engineering problems. You “just” hire appropriately skilled people and do it.
From there on it’s marketing and trust-building. On the basis of eBay’s recent efforts, just saying you’re cheaper, offering a choice of payment methods and publishing an open and transparent dispute resolution procedure would be a huge leg-up. After that, just throw money at it.
eBay currently has 13,200 employees globally, but I don’t know what proportion are technical or even programmers. That sounds big, and it is. But one needn’t compete with eBay as a global entity. Sellers will often want buyers only in the same country, or the same city even. Maybe a myriad of more local eBay competitors is a possibility. After all, we still have local shops as well as megastores.
I wonder if anyone will be nimble enough to capitalise on eBay’s perceived failings?
The answer is presumably the same as why people clamour to get into a Westfield shopping centre rather than forming a company, raising capital and getting planning permission to build their own shopping centre. They just want to sell their stuff. That’s fine, but if you don’t want to do all the other stuff yourself then you have to pay eBay or Westfield to do it for you — and, yes, allow them to make a profit along to way. Their shareholders expect nothing less: it’s eBay’s job to deliver profits to those shareholders, not to you.
As I say, if you reckon you can do it better or cheaper, what’s stopping you?
Or, if eBay really is the only game on the planet, what’s stopping you passing on any extra costs to the buyer?
There may well be very good answers to these questions, but they’re not answered by hyperbole about how terrible eBay is.
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Nobody will deny that eBay is big — its huge. Also, what everyone seems to be ignoring is the fact that plenty of small sellers left and are leaving eBay — squeezed out by high fees and stupid, restrictive policies that kills good sellers’ reputations and still lets the bad sellers run rampant!… and manipulating exposure to those sellers eBay wants you to see. eBay replaces these lost listings with the likes of buy.com with their miserly 2 percent sell thru rate. Why do you think eBay is coming out with such a drastic plan? They want to flood the site with anything and everything in an effort to look good for this quarter. Sooner or later tactics such as these are going to run out and eBay will have to finally look eye to eye with the sellers it has been beating on since January of this year.
Many of us no longer sell on eBay. I took my 10 year 100 percent perfect feedback and left! We are trying very hard to build up other sites and to get buyers to frequent those sites. The latter is the hardest thing to do but eventually I feel it will happen. We are NOT WHINING!!! We are letting everyone know just what we have dealt with on the new eBay and why many of us are watching it from afar now… still hopeful that management will come to their senses and the ship will turn around! If we hadn’t done this — would you be bothering to blog about eBay right now? Would the Wall Street Journal, NY Times and other formidable media be bothering with articles on eBay…. NO. We have kept them in the public eye and will continue to do so. This is the “noise” that Donahoe scoffed at!
As for size….
the old adage: “the bigger they are, the harder they fall” comes to mind. -
Stil… sellers really aren’t whining. Many are long-term sellers like myself who have been selling on that site for a long long time. 10 years for me and now they want to turn it upside down because they’re openly jealous of Amazon. They want to be like Amazon without the work… without selling a thing on their own… without adequate customer service and at the same time they don’t want to spend a dollar of revenue. Instead they beat it out of sellers. They won’t entice one single buyer away from Amazon. Many many sellers left eBay — many big powersellers also left eBay. We won’t leave the company we helped to build and we love without a fight! We believe it is woefully and foolishly being mismanaged and we’re hopeful it will somehow turn around.
So… quit calling us whiners or somebody might just call you an eBay cheerleader
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@Patricia013: Given my previous writings about eBay, I don’t think there’s any fear of me being mistaken for an eBay cheerleader!
But, if people are dissatisfied with eBay and leaving, well, isn’t that just the free market working? Sellers are choosing the best marketplace. -
We could go back and forth on this all night to no avail. I believe I’ve made my point and I’m certainly not alone in it. Go to the ebayinkblog.com — you’ll find the same resistance, the same “noise”. Sellers are reluctant to simply give up “classic eBay” without any fight at all. They refuse to simply walk away. In any other business it might be admirable for customers to be this fiercely loyal… in eBay, we are just yesterday’s news. Like everything else, we came to them to easily. Well, yesterday’s news isn’t going away so fast… not without telling everybody what is happening. Its kind of like participating in and building up a business for over 10 years… then being shown the door. You just don’t go meekly and that’s what eBay sellers are doing. Like it or not. This “noise” has been going on since January 2008 — I’m sure even Donahoe thought it would die down by now. He was wrong. I’m afraid this will continue until everybody who even thinks of buying on eBay will already know their past reputation and how they swept out the small sellers after they were done with them. You, of all people, should understand where I and others like me are coming from. I’m sure this is not your first article on eBay.
Hey, you might want to reciprocate and come and leave a comment on MY blog.
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@Patricia013: Ok, I now have commented back on your blog, on the piece A Letter From The Heart Of One Small Seller to Mighty Ebay, since it’s at the heart of what we discuss — literally.
The person you quote wrote the relationship-breakup letter, “But things have been happening lately — things have changed. You’ve changed. And after this last incident, I just can’t keep on going along as though everything is still fine”.
I’ve said:
This post intrigues me. It’s a well-written, emotional piece which clearly sums up how some eBay sellers are feeling. The “our relationship is over” metaphor isn’t new, of course, but this is a fine example.
Still…
What I simply don’t get is why eBay sellers are seeing this as such a personal, emotional engagement in the first place. And I’ve put a lot of thought into this, because I’ve written a lot about eBay’s plans to make the use of PayPal compulsory here in Australia.
This is a standard business transaction! eBay provides a venue and an auction or sales mechanism, plus a lot of global promotion to bring customers into the venue. In return, they want a percentage.
OK, the deal is changing. Unilaterally from their side, because they’re the bigger player — but that’s no different from your bank increasing the interest rates on your home loan, or the bus fare going up.
So, if you don’t like the deal, if you do really feel that it’s an abusive relationship, why not just leave? eBay isn’t the only way to sell online — far from it! To say that it’s killing you, but then stick around anyway, well… doesn’t that mean it really is a co-dependent relationship?
I don’t have answers for these questions, but I’m starting to suspect that for some (many?) smaller eBay sellers, this was their first foray into the business world. So for them there’s a lot personal emotional engagement. Or am I on the wrong path there?
I’ve recently sold some stuff on eBay and, yes, even accepted payment via PayPal. I think eBay is clunky, ugly and maybe not the best choice — but to sell a few things quickly it was a no-brainer. PayPal is more expensive, but it was the buyers’ choice — as I think it should be.
To be honest, I find the whole idea that people thought eBay “cared” about them a little creepy.
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eBay is also making other changes to de-emphasize auctions entirely by making fixed-price sales more attractive — essentially undermining the basic auction model on which they built their business, and turning eBay even more into Just Another Online Store in many respects.
What a shame. That’s the best thing about it. As a person with unconventional taste in, amongst other things, clothes, it’s a great place to pick up offbeat stuff at a reasonable price.
Anyone like to point an ignorant pleb in the direction of some of the more reputable eBay alternatives. If that’s where the small-time sellers are going, I’m following them.
As for traders’ emotional attachment to eBay, maybe it’s because, despite the commercial relationship between traders and eBay, the interactions between buyers and sellers, and the fact that sellers set up their own little personal ‘spaces’ on eBay, they have more emotional investment in it. Maybe it’s because eBay has become such an icon. Just look at how upset people got over the whole ‘New Coke’ thing.
[shrugs]
People bewilder me.
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Sweet Sister Morphine: Aye, there’s the rub! As I wrote back in May, eBay is by far the biggest marketplace. The alternatives simply don’t have the buyers. Yet.
With almost 6 million customers [in Australia] it dwarfs its nearest competitor Oztion with barely 250,000. New entrants BidSell and eSwap are even tinier.
When I asked on Twitter just now I got a few people suggesting Oztion was the go. Trading Post claims 1.8 million “potential buyers”, and is currently offering free “basic” auction listings — although as one guy said, “Trading Post’s website is horrendous though. I tried three times on three separate days and used two comps and site crashed every time. Not a viable alternative IMO.”
Someone else suggested invading trademe.co.nz.
I read all of that as saying the market is ready for some changes…
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You know, every time I write something on here, I seem to make some kind of monnumental editing stuff-up that renders my comment, to a greater or lesser extent, incomprehensible.
[headdesk]
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Also, cheers re the online marketplace suggestions.
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