EBay’s Strategy for Taking On Amazon(nytimes.com)
nytimes.com
EBay’s Strategy for Taking On Amazon
http://www.nytimes.com/2013/12/22/magazine/ebays-strategy-for-taking-on-amazon.html
6 comments
I was a consultant at eBay for a few years, and one thing I learned was that it's big, hairy, complex problem to run a marketplace. Every policy change is fraught with vitriol because there are always two sides -- the buyers and the sellers. One group will always think you're screwing them over while the other side thinks you made their day. It's worse because the sellers are a small, extremely vocal group and the buyers are the quiet millions that simply react through purchasing decisions (or lack thereof). Buyers tend not to run anti-eBay blogs, forums, etc.
On top of that, there's fraud. Both eBay and PayPal have inserted themselves as an intermediary in the long history of humans trying to screw each other over, where one or both parties is going to walk away very unhappy, and the company gets the blame. It's a tiny fraction of the activity, but the outcome is that everyone pays the price through draconian policies, high fees, bad customer service, locked accounts, etc.
On top of that, there's fraud. Both eBay and PayPal have inserted themselves as an intermediary in the long history of humans trying to screw each other over, where one or both parties is going to walk away very unhappy, and the company gets the blame. It's a tiny fraction of the activity, but the outcome is that everyone pays the price through draconian policies, high fees, bad customer service, locked accounts, etc.
Honest question, why does EBay not offer a simple we open the package weigh it and take some pictures and then email them, to the buyer option? Even adding a week and charging 20$ + shipping would be worth it for a fair number of purchases and add quite a bit to there bottom line.
I have no idea. If I had to guess, I'd say the problems are that it's not cost effective and it could cause eBay to hold the bag in the case of fraud. I'm not sure that it would be as little as $20 to process shipments, and photographs aren't necessarily going to show problems such as defective products or counterfeit goods. It requires a more lengthy examination by an expert.
I think there's a small market opportunity here though. Gazelle and some other companies are doing this for some electronics. Instead of essentially acting as an escrow, they are buying a tested, QA'd product outright from the seller, and then selling it for a more hefty markup on eBay and other outlets. Small, high value goods with high margins such as electronics, luxury clothing, and jewelry may be a good business here if it marketing can be scaled cost effectively.
I think there's a small market opportunity here though. Gazelle and some other companies are doing this for some electronics. Instead of essentially acting as an escrow, they are buying a tested, QA'd product outright from the seller, and then selling it for a more hefty markup on eBay and other outlets. Small, high value goods with high margins such as electronics, luxury clothing, and jewelry may be a good business here if it marketing can be scaled cost effectively.
eBay avoids a lot of headaches by not touching the merchandise, for example sales tax (in the US). Unlike amazon, which is caving to sales tax demands in one state after another.
Ever since Amazon started charging sales tax in my state, people I know have been showrooming products on Amazon, then buying them on eBay, buydig, etc. As long as eBay isn't forced to deal with taxes, they have an inherent advantage.
The morality and legality of avoiding paying sales taxes is quite another discussion, and an interesting one.
Ever since Amazon started charging sales tax in my state, people I know have been showrooming products on Amazon, then buying them on eBay, buydig, etc. As long as eBay isn't forced to deal with taxes, they have an inherent advantage.
The morality and legality of avoiding paying sales taxes is quite another discussion, and an interesting one.
From what I experienced, European merchants do charge VAT as a part of the price: being from outside EU I can see prices listed on ebay.de and ebay.co.uk with and without VAT. Different EU nations have different provisions for taxation of privately sold / used items, so VAT may or may not apply in those cases.
Foreign merchants listed on European eBay sites do not charge VAT, nor they should: import duty is the job of customs office.
Foreign merchants listed on European eBay sites do not charge VAT, nor they should: import duty is the job of customs office.
Have you ever tried getting a VAT invoice (invoice with price and vat amount and rates and numbers written down on the invoice) from any eBay seller?
I doubt many of them are even VAT registered
Amazon on the other hand clearly state the Tax amounts and/or import duties on the invoices and receipts.
Anyways Ebay/Paypal are one scummy company who are being rightly out-competed by Amazon, they deserve it for their treatment of buyers and sellers and users of Paypal.
I doubt many of them are even VAT registered
Amazon on the other hand clearly state the Tax amounts and/or import duties on the invoices and receipts.
Anyways Ebay/Paypal are one scummy company who are being rightly out-competed by Amazon, they deserve it for their treatment of buyers and sellers and users of Paypal.
Yes, normally I get a full invoice from a seller, which lists VAT. Might be not something every mom&pop seller follows, but par the course with incorporated merchants on eBay.
In the UK a business does not have to register for VAT until sales reach £79,000 so many small traders can go VAT free quite legally.
I usually only ever shop on Amazon; recently I got a little into drones and aerial photography, and some addons can only be found on eBay.
Man, shopping on eBay is a friggin' nightmare.
1. For some reason, eBay logs you out completely every time you restart the browser (whether or not you check the "stay connected" checkbox). Curiously, the page says "hello {my name}" but I still need to reconnect to do anything, and when I do, I have to retype my email address!! If the system can remember my name why can't it remember my email address?? (This is the most annoying detail imaginable, probably because it seems so easy to fix).
2. Product descriptions are a mess; they usually contain many pictures but the text is more about what the buyer NEEDS TO DO AND VARIOUS OTHER WARNINGS IN ALL CAPS (and red font) than about the product itself. I feel like I'm being yelled at by an angry cop every time I read those.
3. Paying is a pain. Buying and paying are two very different events on eBay, whereas they're just one and the same on Amazon. You have to go to Paypal (completely different website -- eBay owns Paypal, can't they integrate it to the main eBay site??) and then you get a deluge of emails (around 4 I believe, sometimes more when the seller decides to write too).
4. Sellers are often unprofessional and obnoxious. They send you emails telling you to rate them 5 stars and that "FOUR STARS = FAILURE"; they add a paper saying the same thing in the package; they very rarely respond to emails; shipments are made via non-traceable systems.
5. Products are of uncertain quality; some are very good and some are cheap rip-offs (but it's hard/impossible to tell from the product description).
I would very happily pay 30% more (or even 100% more for some products that are very cheap anyway) to shop on Amazon vs. eBay; I can't understand how they're still in business (it can't just be me buying a couple of filter adapters for GoPro cameras, can it?)
Man, shopping on eBay is a friggin' nightmare.
1. For some reason, eBay logs you out completely every time you restart the browser (whether or not you check the "stay connected" checkbox). Curiously, the page says "hello {my name}" but I still need to reconnect to do anything, and when I do, I have to retype my email address!! If the system can remember my name why can't it remember my email address?? (This is the most annoying detail imaginable, probably because it seems so easy to fix).
2. Product descriptions are a mess; they usually contain many pictures but the text is more about what the buyer NEEDS TO DO AND VARIOUS OTHER WARNINGS IN ALL CAPS (and red font) than about the product itself. I feel like I'm being yelled at by an angry cop every time I read those.
3. Paying is a pain. Buying and paying are two very different events on eBay, whereas they're just one and the same on Amazon. You have to go to Paypal (completely different website -- eBay owns Paypal, can't they integrate it to the main eBay site??) and then you get a deluge of emails (around 4 I believe, sometimes more when the seller decides to write too).
4. Sellers are often unprofessional and obnoxious. They send you emails telling you to rate them 5 stars and that "FOUR STARS = FAILURE"; they add a paper saying the same thing in the package; they very rarely respond to emails; shipments are made via non-traceable systems.
5. Products are of uncertain quality; some are very good and some are cheap rip-offs (but it's hard/impossible to tell from the product description).
I would very happily pay 30% more (or even 100% more for some products that are very cheap anyway) to shop on Amazon vs. eBay; I can't understand how they're still in business (it can't just be me buying a couple of filter adapters for GoPro cameras, can it?)
Interesting; my experiences on eBay have been quite different. They do make me log in repeatedly, but my browser remembers the form data so it's just one click. By the way, Amazon also makes me log in repeatedly; I see no difference there.
I try to pick reputable sellers and I've learned to avoid the Hong Kong and China based sellers, some of whom really do sell junk and are hard to deal with. Recently I had a bad experience with one, and eBay quickly credited me the money even though it was long past the eight weeks which is the maximum.
As for shipping, almost everything I buy on eBay is trackable, except for stuff coming from Asia. It's a different shopping experience from Amazon and other online retailers, but sometimes I prefer it actually. I do prefer Amazon's review system which often provides invaluable advice about the product and feedback on the seller.
I try to pick reputable sellers and I've learned to avoid the Hong Kong and China based sellers, some of whom really do sell junk and are hard to deal with. Recently I had a bad experience with one, and eBay quickly credited me the money even though it was long past the eight weeks which is the maximum.
As for shipping, almost everything I buy on eBay is trackable, except for stuff coming from Asia. It's a different shopping experience from Amazon and other online retailers, but sometimes I prefer it actually. I do prefer Amazon's review system which often provides invaluable advice about the product and feedback on the seller.
> By the way, Amazon also makes me log in repeatedly; I see no difference there
Amazon doesn't make me log in repeatedly; they ask for your password again for some actions (looking at your order history for example) but for most actions (including buying) you usually don't need to retype your password... and you never have to retype your email address.
eBay makes you retype your email address while they display your name on the page, which is incredibly stupid.
Amazon looks like it's build and operated by real people who care about what they're doing; eBay looks like it's been put together by consultants who couldn't care less about the user experience.
Man I hate eBay.
Amazon doesn't make me log in repeatedly; they ask for your password again for some actions (looking at your order history for example) but for most actions (including buying) you usually don't need to retype your password... and you never have to retype your email address.
eBay makes you retype your email address while they display your name on the page, which is incredibly stupid.
Amazon looks like it's build and operated by real people who care about what they're doing; eBay looks like it's been put together by consultants who couldn't care less about the user experience.
Man I hate eBay.
Sounds like a browser setting. Chrome browser remembers my name and password on Ebay and I never have to retype my name or email. In fact it's a little too easy; I'm wondering if I should tell it not to do that; my 9-year-old can just wander in and order all kinds of stuff!
6) Don't forget the massive influx of boot leg celebrity memorabilia (mouse pads, pens, ipad covers with photographs of celebrities printed on them) that started about a month ago. They've clogged up the search results.
7) "Ebay Patents 10 Step Check Out" comes to mind. They're complicating a process that should really be a lot more simple.
8) Ebay has "dumb search results". If a seller has a "buy it now" listing for pens that have sold well at 100+ units, and another seller who has sold none, eBay is so stupid that it will put the best selling products in the middle or end of the search results. Where as Amazon puts the best sellers at the top.
7) "Ebay Patents 10 Step Check Out" comes to mind. They're complicating a process that should really be a lot more simple.
8) Ebay has "dumb search results". If a seller has a "buy it now" listing for pens that have sold well at 100+ units, and another seller who has sold none, eBay is so stupid that it will put the best selling products in the middle or end of the search results. Where as Amazon puts the best sellers at the top.
The best thing eBay could do is copy Amazon in how a third party listing works. On Amazon we can throw up a feed of our entire inventory. On eBay you need to create a separate listing for each product you want to list. In effect it means more complicated software and overhead to maintain the same level of listings.
Additionally it gives customers the impression that one unit of a product listed on eBay is one physical unit the merchant has and is specifically holding for an eBay listing, which are rarely the case.
Basically this is the result of eBay shoehorning fixed price multichannel merchants into the traditional auction listing model that they started with.
Additionally it gives customers the impression that one unit of a product listed on eBay is one physical unit the merchant has and is specifically holding for an eBay listing, which are rarely the case.
Basically this is the result of eBay shoehorning fixed price multichannel merchants into the traditional auction listing model that they started with.
Could you change the link to the single page view: http://www.nytimes.com/2013/12/22/magazine/ebays-strategy-fo...
Thanks, I only read the first page when I saw I should click through 5 more pages... will continue reading now. :)
Interesting read. A few months back eBay change their affiliate cookie from 10 days to 24 hours. Revenues for most affiliates dropped across the board and lots of those pushing BIN products jumped ship to Amazon. Lots of those pushing auctions are stopping active development on their sites - it's incredibly tough to make a 24 hour cookie work. Shame really, it was a great program.
Their strategy seems to be "throw a lot of stuff against the wall and see what sticks."
Ebay/Paypal has a long history of screwing sellers and buyers and users of Paypal, just search the internet for horror stories. Their support is staffed by drones (ha) unlike Amazon support who are swift and efficient and seem to go out of their way to make me feel good as a customer.
What is more surprising is that Ebay hasnt been brought to court here in Europe, its quite obvious majority of sellers are not charging or paying sales taxes (VAT) which are as high as 20 to 30% here depending on state.