Electronics & Computers Deals here!
July 14, 2008 8:39 AM PDT
Buy.com deal with eBay angers sellers
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Consumers appear to be tiring of online auctions, and rivals such as Amazon.com are attracting more shoppers with fixed-price listings, while eBay has been struggling for growth. To shift toward that model, eBay has struck a deal with the Web retailer Buy.com that enables the company to sell millions of books, DVDs, electronics, and other items on eBay without paying the full complement of eBay fees.
The recent change is one of several under eBay's new chief, John Donahoe, that is stirring rancor among the faithful who depend on the site for their livelihood. The deal with Buy.com has added more than 5 million fixed-price listings to eBay.com since the beginning of the year--for items from Xbox 360 video game consoles to Weber grills.
Since eBay's search listings favor larger sellers who can add perks like free shipping, which improve their feedback ratings, Buy.com's presence has hurt many smaller sellers that compete in those product categories.
eBay is signaling that its future lies with big, reliable sellers, not the mom-and-pop shops that are objecting so vociferously to the Buy.com deal, said Tim Boyd, an Internet analyst with American Technology Research. "It's a tragic ending to what was once a warm and fuzzy Silicon Valley story," he said.
eBay says the Buy.com deal will fill gaps in its product offerings while making shopping more predictable. Wall Street will be paying close attention to whether people are indeed buying at eBay.com in greater numbers when eBay reports its second-quarter earnings on Wednesday. This task is made more difficult because while there are more listings, it is not clear that more people are buying.
"Frankly, we are challenging some of the core assumptions that we have made about our business," said Stephanie Tilenius, general manager of eBay North America. "Instead of focusing on being an auction business, we are looking at what it takes to create the best marketplace out there."
Buy.com, based in Aliso Viejo, Calif., was founded in 1997. Within two years, it made an initial public offering, only to nearly implode during the dot-com bust. In 2001, Scot Blum, its founder, took the company private. Buy.com carries no inventory, brokering sales through the same distributors that sell products to physical retail stores.
Unlike many small sellers who have made eBay a home over the last decade, Buy.com is large enough that it can offer free shipping, readily accept returns, and provide a toll-free phone number--just the kind of customer service that eBay executives have hoped to bring to the sometimes-unruly Internet bazaar.
To accommodate Buy.com and other large sellers in the future, eBay last month announced a new "Diamond" level for its power sellers. Unlike its other classes of sellers, which pay eBay fees to list each item and share a percentage of each sale, Diamond sellers can negotiate their own fee arrangements with eBay.
Details of eBay's deal with Buy.com are being kept private, though it appears from the sheer number of Buy.com listings flooding the site that Buy.com is not paying listing fees.
That has enraged many sellers, who have uncorked a wave of vitriol on eBay's community forums about this and other changes. Many believe that eBay has violated the sacred tenet of the "level playing field," which its founder, Pierre Omidyar, established as one of the company's basic principles.
The way that eBay's relationship with Buy.com emerged into public view did not help matters.
Tony Libby, a seller of technology items from Maine, first noticed Buy.com's products on eBay in a quiet experiment the two companies conducted last December. When eBay began promoting Buy.com's listings in its search results this spring, Libby, who says he used to sell more than $250,000 in computer hardware each month, watched his sales drop 50 percent to 75 percent.
Libby tipped off My Blog Utopia, an eBay-watching site that published an item in April about the relationship with Buy.com before eBay had a chance to announce it itself.
"As an independent seller, I felt betrayed," Libby said. "I've paid eBay many hundreds of thousands in fees over the past several years and believed them when they talked about a level playing field. And they just plain and simple are going back on their word?There is fair, and there is outright stabbing you in the back," he said.
Kevin Harmon of Charlotte, N.C., who sold books, CDs, and DVDs on eBay, said he stopped selling books altogether when the Buy.com effort began. "The way our fees are structured, we can't compete with a company with free three-day fixed-price listings," he said. "You can imagine why most sellers are pretty upset about that deal."
Unlike many other sellers, Harmon takes a measured attitude to the changes at eBay. "We have to fit our business model to theirs. Most sellers think it should be the other way around. They are doing what they think is the best for them, and we just have to try to hang onto their tail," he said.
Tilenius at eBay said the changes were fair because anyone can achieve Diamond power seller status and have access to the same fee discounts as Buy.com--with a certain volume of monthly sales and high feedback from buyers.
"This is open to everyone. It's a strong incentive for sellers to strive for greatness and grow their eBay business," she said.
eBay resisted this type of arrangement for years, arguing that bringing other large sellers to the site would dilute eBay's brand and reputation as a dynamic flea market.
But buyers' expectations for online commerce have changed over the years, while eBay's stock price--it closed Friday at $28.01--is where it was two years ago, largely because of investors' worries about the lack of growth in the auction business, analysts said.
"People now expect that something you buy online should be nicely wrapped in a box and sitting on your doorstep 48 hours later. The best companies, like Amazon, do that," said Mark Mahaney, the director for Internet research at Citigroup. "eBay has to make it clear that it can participate in the fastest part of e-commerce growth."
Entire contents, Copyright © 2008 The New York Times. All rights reserved.
Auctions and fixed-price sites are two totally separate business models. They may both loosely be defined as "e-commerce", but that's like saying wine and milk may both be loosely defined as drinks. The market is not the same. What Ebay is doing is tantamount to a wine maker saying "all we need to do is get ourselves in the dairy aisle and we'll be set. All the big drinks are in the dairy aisle, that's where we need to be."
Morons.
I welcome any competition to online auctions and payment. Die eBay. Just die.
I buy Coins - Postcards - antiques and assorted other items.
I will buy only auctins items - no buy it now or any fixed price items
What Ebay does not seem to understand, all the items I have listed above are offered on other auctions sites and usually at a lower price. If Ebay does not keep up it's standards there will be other sites that will be more than happy to take their auction business away.
one misleading item listing and and fake emails. I closed my account today.
There are many ways to reduce your listing fees and increase sales that are free and very useful if your savy enough to do some research into it.
But the whole idea of buy.com (parasitic middle men) not having to pay fess to ebay and paypal (parasitic middle men) is an abuse of power.
I was offered the power seller status and refused, i feel sorry for all those that accepted as their hard work which made they site is now being abused and replaced by big business's that are not adverse to or suited to this niche. Buy.com has its own webspace/search engine ect.... Why would Ebay shun its core users. If I wanted to use buy.com I'd got to buy.com. Next Play.com and Amazon.com will start listing in fixed price auctions, again abusing their power a destroying their own second hand sales markets respectively.
Many people only buy on Ebay, with no fees, try selling, its getting harder and harder with fees from Ebay and Paypal always taking way more than you expect.
And yes scams are increasing dramatically all the time, there are even sites now where you can buy feedback, and even if you get kick off ebay there are other sites that specialize in getting you back on via IP address forwarding ect.
Heres a scam that's rife at the moment and should be on watchdog soon =
There a Ebay shop with power status called lightsandfittings, no problem there, they are a power seller? Wrong, I brought a microwave listed as new from them, turned up, wasn't new or even working. Could get my money back through paypal or my credit card, but dug into it and PLEASE READ - THE SELLER (POWER SELLER) IS ACTUALLY IN HMS FORD PRISON FOR FRAUD AND USES THE LIBRARY COMPUTERS TO LIST ALL THE OTHER CONVICTS STOLEN GOODS. You cant speak to them or see them without there written permission, HMS Prisons policies.
What do you do, nothing you have to write the money off, Paypal and Ebay actually allow prisons to list goods, this has been going on for at least two years in my knowledge. (Phone Ebay - they will confirm that anybody including those in prison can trade on ebay, even if they are there for fraud)
And using a site to annonomise you and re map your ip address, you can pretend your anywhere in the world, so just to let you know all these warnings of Nigerian scammers, quite a few of them arent from Nigeria they are in prison here in the UK.
Check the torrent sites for pdfs. on how to do this and scam away the last few good people on ebay, until ebay just becomes a portal for buy.com and who ever else has millions to waste.
The e commerce bubble is bursting rapidly, ebay and other sites with their spyware/adware/redirection ect has show that how deeply flawed the infrastructure is.
I have know sellers sell 100 of items and actually make a loss - no profit - actually dept.
Oh and if you want to rip someone off, buy anything with second class delivery - your new ps3 for instance. And just say to paypal it never arrived you'll get your money back and have a new ps3 - mind though only do it the once or twice.
Ebay just die, just die
There are many ways to reduce your listing fees and increase sales that are free and very useful if your savy enough to do some research into it.
But the whole idea of buy.com (parasitic middle men) not having to pay fess to ebay and paypal (parasitic middle men) is an abuse of power.
I was offered the power seller status and refused, i feel sorry for all those that accepted as their hard work which made they site is now being abused and replaced by big business's that are not adverse to or suited to this niche. Buy.com has its own webspace/search engine ect.... Why would Ebay shun its core users. If I wanted to use buy.com I'd got to buy.com. Next Play.com and Amazon.com will start listing in fixed price auctions, again abusing their power a destroying their own second hand sales markets respectively.
Many people only buy on Ebay, with no fees, try selling, its getting harder and harder with fees from Ebay and Paypal always taking way more than you expect.
And yes scams are increasing dramatically all the time, there are even sites now where you can buy feedback, and even if you get kick off ebay there are other sites that specialize in getting you back on via IP address forwarding ect.
Heres a scam that's rife at the moment and should be on watchdog soon =
There a Ebay shop with power status called lightsandfittings, no problem there, they are a power seller? Wrong, I brought a microwave listed as new from them, turned up, wasn't new or even working. Could get my money back through paypal or my credit card, but dug into it and PLEASE READ - THE SELLER (POWER SELLER) IS ACTUALLY IN HMS FORD PRISON FOR FRAUD AND USES THE LIBRARY COMPUTERS TO LIST ALL THE OTHER CONVICTS STOLEN GOODS. You cant speak to them or see them without there written permission, HMS Prisons policies.
What do you do, nothing you have to write the money off, Paypal and Ebay actually allow prisons to list goods, this has been going on for at least two years in my knowledge. (Phone Ebay - they will confirm that anybody including those in prison can trade on ebay, even if they are there for fraud)
And using a site to annonomise you and re map your ip address, you can pretend your anywhere in the world, so just to let you know all these warnings of Nigerian scammers, quite a few of them arent from Nigeria they are in prison here in the UK.
Check the torrent sites for pdfs. on how to do this and scam away the last few good people on ebay, until ebay just becomes a portal for buy.com and who ever else has millions to waste.
The e commerce bubble is bursting rapidly, ebay and other sites with their spyware/adware/redirection ect has show that how deeply flawed the infrastructure is.
I have know sellers sell 100 of items and actually make a loss - no profit - actually dept.
Oh and if you want to rip someone off, buy anything with second class delivery - your new ps3 for instance. And just say to paypal it never arrived you'll get your money back and have a new ps3 - mind though only do it the once or twice.
Ebay just die, just die
In that way, they could have worked to help the community accept the inevitable, and help find homes for the displaced sellers who would be causing all the grief they have now. And it is very obvious by the responses to the interviews with financial analysts, that the Marketplaces sector (60% including all auctions and stores) is behind 3 points, and that without Paypal, Eba would be in very SERIOUS trouble.
Had they been more honest with their customers, the auction and store owners, then everyone could have worked together to maintain a semblance of dignity. Now there is none. And what makes it even worse, is that they blame the 3 point loss on the discount they give to the powersellers, as well as the coupons they gave to the buyers. Freebees given to buyers are not what makes a business work. As it is, the sellers are now giving their own customers free goods thanks to the lack of customer support and safety for sellers.
The many people who used to sell in auctions on ebay were frightened away with the blatant and obtrusive changes that have been made so quickly, and without any regret, or apology by the business, Ebay, which already adds insult to injury.
A better idea might have been to keep the auction business "as is" and limit the retailers to another half of ebay. Maybe call it ebay "new" and ebay "used". Those, like BUY, could list as well as all the wholesalers who sell purses and perfumes, and the asian importers. The buyers and bidders would find it easier to get what they actually want, rather than confuse them, or set one faction against another in order to fight for the first page of listings. It's really not rocket science. Fast changes to the original site are going to push the whole marketplace sector down to it's lowest resting place.
The board of directors and the stockholders need to rethink the plans made by ex retail CEO's.So far, the results of Q2 were the first warning signs...