A few things are rising to the top in all the discussion of eBay's plans for the future. I suspect many will be announced at eBay Live! next week. Stephanie Tilineus, eBay's GM of North America said at the ChannelAdvisor Catalyst conference earlier this year that the eBay of today will be "unrecognizable" with the eBay a year from now. What will it take to accomplish that?
#1 - NEW Fixed-price Only - No Auctions
Ms. Tilineus also said eBay want's to move to a more "retail-like experience". Auctions are a lot of work for eBay. There are a lot of people monitoring them, enforcing rules, and fixing VeRO problems. The auctions invite more layers for scammers to get involved.
eBay says fixed-price listings will surpass auction style listings this year for the first time. That's not surprising since eBay has slanted things toward the fixed-price format. So were auctions really dying on their own? Or did eBay kill them?
In any case, the "split-screen" fixed-price / auction format won't last - the auction is being pushed out.
The Sourcing Pavillion - New for 2008
For the first time, eBay Live! will have a "Sourcing Pavilion". The registration materials say, "Find the hottest products, secure the best pricing, and boost your sales! Visit the ASD/AMD Sourcing Pavilion and discover how leading sourcing companies can increase your profits."
There are currently 17 exhibitors signed up to appear in the pavilion.
If the emphasis is on selling new fixed-price items, what better way to get sellers on board than a bunch of people offering new merchandise for them to sell?
More Control by eBay
Rather than going back to the "old eBay" or "eBay Classic" as my friend Randy Smythe likes to call it, eBay will begin exercising more control over sellers.
#2 - Controlling how sellers get paid
- They'll do this by requiring PayPal. If they cannot legally do that, they will make it painful for sellers to use anything else.
- eBay will then shift the responsibility of handling disputes solely to PayPal
#3 - Controlling shipping
- Just like Amazon, eBay will step in and offer a shipping credit, or in some other way standardize and control the shipping amount sellers can charge.
#4 - Standardized Listing Formats
- I believe the days of creative descriptions and individualism on eBay are nearly over. With the prohibition of links -even in About Me pages - eBay is setting that up. They will move to a one-size-fits-all description format and away from the homey kitchen table feel.
#5 - eBay Fees
I think the other thing that will change in a major way, and will save eBay a lot in expenses and bad PR is a change in the way people pay to list. Right now there are dozens of fees for every little thing in a listing. eBay will simplify everything with an Amazon-like monthly fee, free listings, and a back-end commission when an item sells. Just watch.
eBay Live! still has the logo "The Power of all of us." displayed on the website. I used to think that included me and my fellow sellers and buyers - I'm thinking now though that "us" is a more exclusive group...within the walls of eBay HQ.
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Hmm, I was looking around for 2009 predictions and found this group from 6 months ago.
Well you were pretty right with number two…., and that is the one that, if increased worldwide, will give a boost to Ebay’s actual cash flow.
I hope, and actually expect, that you are wrong with number one. Auctions are just too much of an integral part of the image of Ebay for them to lose that facet – they may however just make auctions less and less viable either accidentally or intentionally (neither relies on competence or good management).
Number 3 is an unknown at this point. It will be interesting to see what the outcome of free shipping required for DVD’s in the UK is. The restrictive shipping caps are a killer for international sellers, but Ebay is actively trying to discourage sellers from listing away from their home country. They claim that if you list in a different currency you are not entitled to the discount, as it is too difficult to work out. I would have thought that if you are entitled to a 15% discount, they could just discount 15% from your monthly fee total, but apparently Ebay doesn’t have a computer with such capabilities. Restricting the postage charge for a rare and heavy antique leatherbound book to $4.00, also discourages foreigners from listing on the US site. Bad luck if the buyers of the book are more comfortable bidding in that currency. Now while this looks like I have gone off at a tangent (okay I have), to tie it back in, actually enforcing “free shipping” across the site (or more accurately “inclusive shipping” as there is no such thing as free shipping) would actually level the playing field somewhat and resolve an area that Ebay sees as a problem. I don’t know whether the DVD situation in the UK is a trial for this idea, or just Ebay seeing what they can get away with.
Prediction number 4, banning the homey descriptions of items in favour of absolutely standardised descriptions will not happen. Ebay can not afford to ban half of the variety items on the site, and all second hand items. Even Ebay realises that the variety on the site gives them a marketplace edge, they just don’t realise how much their policy changes and fawning to diamond sellers has pushed variety off the site.
Number 5, will Ebay standardise or simplify a fee structure? Removing up front listing fees and increasing commissions substantially, the direction that Ebay has indeed been inching towards this year, actually rewards sellers who are not competent at listing saleable goods or items priced reasonably, while effectively punishing those who get higher clearance rates on the items they list. Ultimately that could end up with a site that is choked with unsaleable stock, causing even the better sellers to have their sales fall away and wander off to greener pastures in search of decent sales. At the same time there is an aspect to the speech by Stephanie Tilenius at Channel Adviser earlier this year (as mentioned at the top of the above post). The Ebay Ink Blog reported that “She (Stephanie Tilenius) also made it clear that the concept of an annual price change no longer existed at eBay and that further pricing adjustments could come at any time.” These are not the words of a company looking to simplify their fee structure, these are the words of a company that doesn’t want to wait until next year to extract more cash from the customer if they see an opportunity. As I said elsewhere at the time, “How can any seller maintain any form of business plan with a constant threat of changes to how they are required to do business and price rises – while being expected to maintain “value” for the buyer? “, but by now anyone with a proper business plan has been pretty much chased off the site anyway.
Hmmm, fireworks are going off as I type. It is the New Year (2009) in Australia right now. Happy New year to anyone who happens to stumble across this post.
Kind Regards, Kevin
Hi Steve,
Fun post, I think I’m about halfway sold on these 5 points. I’ll start with where I disagree.
Just can’t see #1 happening, I think as much as they want to grow up and be a standard retail site, they realize they’ve got to stick to their roots here. Doing away with auctions completely would so shatter their identity that this would be the one time I’d actually believe another site could rise to become the next eBay. There’d be a big opening I think.
#3 I don’t think we’ll see either because I wouldn’t think they’d want to be bothered. Especially after all of the DSR hoopla, implementing #3 would take away one of the criteria sellers are now judged by. Of course if their own judgment is that sellers aren’t living up to this fulfillment you may be absolutely right, but I’d guess we’re a couple of years away from that actually being implemented. I think to do it right away would cause too much backtrack on recently implemented policy and look pretty weak.
#5 I see happening. It’s been reported (I believe by Randy, among others), that they’ve been testing this, and I don’t think they’re testing it for no reason. I actually think this will be a good thing, but that’s just my opinion.
#’s 2 and 4, you could be right about too, because I think for all intents and purposes both are pretty much already in force, or at the very least we’re being pointed in that direction. As I currently edit my listings to strip out links I have noticed that they look pretty much standard now. I wish they’d make a few more optional bells and whistles available to be plugged into listings, but that kind of thing may come in time. If they can get away with #2 legally, it will be.
Thanks again, Cliff
@Randy
I hope auctions don’t ever go away. But they don’t fit with all the restrictions eBay is piling on.
I totally agree the changes will roll out by category. Maybe the Collectibles category will be the “eBay Classic” you wish for.
@Debbie
I agree it would be a mistake. But all the talk is really downplaying auctions in favor of fixed price, as if they are second-class items. I hope I’m wrong. I fear I’m not (in the long-term).
Hey, Steve. Interesting stuff!
I still think that it would be a huge mistake for eBay to try to turn into one big Half.com or Amazon. eBay stated last year that their internal research showed that when a shopper feels a sense of fun, excitement, or personality in a listing, the shopper is nearly twice as likely to bid or buy.
I can’t imagine that eBay would get rid of themselves to be a copycat of another site, making themselves mostly useless. Why shop eBay if it becomes Amazon?
I think that eBay has to continue letting sellers put up their own info for two reasons. One, it can work. At least good listings can help! Two, there are too many types of items people want to sell on eBay for any kind of catalogue approach to cover it. All those used items in varying conditions, or collectibles in varying conditions… nobody would be able to explain any of that if eBay goes to the one size fits all description, as you said.
Steve, I think they will take this all a category or group of categories at a time. Media, CE and Computers would seem the most likely for this kind of treatment at first and then they will roll the changes out to other categories.
Look for a PayPal required option to be added to the US site, similar to what they have in the UK.
John Donahoe believes that Auctions and Fixed Price can co-exist, so I don’t see them getting rid of auctions.
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