Has eBay lost the plot?

I’m sure you remember eBay as the go to ‘online marketplace’ to sell all the things you no longer had a use for and at the time it was a pretty revolutionary business model, but if we were to ask you today, ‘what do you think of eBay?’, we’re pretty sure you wouldn’t have the same kind words to share – especially as a private seller.

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The last few years has seen eBay’s business model drastically change, targeting more businesses and high end branded goods and slowly pushing out the individual sellers. In the process of doing this, they have penalised personal sellers with unfair policies and hidden the fact that their perks and benefits have ultimately been squeezed out – but is this actually working for eBay and is it us individual sellers that have the wrong end of the stick?

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Ebay’s business model and online platform is now built and designed to attract the high end businesses with the branded goods attached. This means there are higher profit margins to work with as they begin competing with the high street and online retailers. The small private sellers are no longer a priority for Ebay with their lack of profitability; Ebay’s sights are set firmly on the guys with the cash.

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This model only works if customers actually perceive Ebay as the ‘go to’ place for Nike Trainers and Timberland Boots etc. It’s a huge task at hand to alter the entire perception of the company away from an auction site to a direct competitor with other online retailers but with all these small and regular changes within their company, they have ultimately begun leading us down that garden path.

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However, this strategy only works if you are able to dominate online search, but 20th May saw Google roll out Panda 4.0 and it was eBay who were left picking up the pieces after losing out on many of its number one spots for pages with thin or little content. Subsequently, Ebay has lost a whole chunk of Google real estate after being hit by Panda 4.0. Online speculation hints at a manual penalty although this can’t be confirmed. However they’ve been punished, it has certainly come at a bad time for Ebay with them suffering a sustained decline in their share price which has by no means helped the situation.

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Things just aren’t looking promising for eBay and if you’re wondering if it was the overall market that was down during this period, think again. The DOW Jones was on a steady climb.eBay2

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So how are they fighting back? Well it’s not a surprise that when creating listings we are being heavily advised to add keywords and tags so that ‘customers can find their listings easier’. In reality it’s most likely to begin the scramble back to the top of Google.

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One of the things that sparked this piece was when I stumbled across what was dressed up to be a great offer from eBay, “20 Free Listings Every Month”. It seems like a good deal to those who aren’t regular ‘eBayers’. This advert is a great lesson on ‘How to take away 80% of your product offering and sell it as a benefit to your customers’. In 2013, sellers were able to list up to 100 listings with no insertion fee.

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This is just one way to try and pull the wool over your customer’s eyes. Frankly, we aren’t that easy to fool. Have eBay really lost the plot?

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You only have to look at one of eBay’s slogans to see the change in strategy. “Buy it new. Buy it now.” They may as well be shouting us out the door, and it hasn’t gone unheard. A blatant change of focus towards new items and fixed price purchases only adds fuel to the fire. All we have to do is visit the eBay homepage to find, or not find, any mention of the word ‘auction’ or ‘bid’ as well as no focus or links to auctions. Instead it’s new products at fixed prices.

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The days for private sellers with auction listings seem to be numbered, leaving us with no other choice but to take our business elsewhere – Gumtree maybe? Lo and behold an eBay company that’s gaining real traction, coincidently as the private sellers are being pushed away from eBay. Maybe there’s method in the madness, but Gumtree is certainly going to need a facelift and extra functionality to keep us there.

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All we can say is “remember us?!… The people that made eBay the giant that it is today?!”
So for us sellers it’s not a great place to be right now, especially when we aren’t necessarily looked after.

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Let’s think about it, without the sellers, there aren’t any buyers so logically the sellers should be well looked after and have a good level of support. However, there is such little seller protection on eBay. The buyers on the other hand have the ‘Money Back Guarantee’ to continually fall back on and if used in the wrong way it could potentially ruin the seller’s reputation whilst leaving them out of pocket. Let me explain…

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Ebay promises to give you an automatic refund if you do not receive the item you have purchased. This process is very simple; they automatically take the money back from the seller and straight back into your PayPal account. No questions asked; it’s for the seller to dispute. This means you can make a purchase, receive the goods and simply claim that the item has not arrived, leaving the seller out of pocket for no wrong doing.

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Not only is this unfair, it can hurt private sellers immensely, especially those who operate close to the financial wire.

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So is this the end of Ebay? It’s certainly the end of the road for private sellers. Only time will tell whether this is going to work for Ebay but early signs don’t seem so positive. The last 12 months has seen Ebay’s share price flat line, showing little to no growth and whilst it’s at a 5 year high, there is a fundamental flaw to this business model. Whilst it’s all well and good competing with the high street, it only takes the manufacturers to become increasingly unhappy with the narrowing profit margins to restrict the online retailers to maintain high street presence and the supply of goods to retailers with a ‘clicks and mortar’ proposition.

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As Ebay continues to dress up low offerings as ‘fantastic deals’ it reminds us of the quote – “You can fool all of the people some of the time and some of the people all of the time, but you can’t fool all of the people all the time.”

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Ebay needs a wakeup call with a strategic marketing overhaul otherwise we forecast that this decline could well be the start of a slippery slope.