(image source: icanhascheezburger)
Simply put, eBay has not figured out the auction model. Their growth these days, and focus, is on their marketplace, on “Buy It Now” (fixed pricing). Other auction houses, like Sedo, Afternic, also continue and push the concept of “Buy It Now” to their users. I’ve got news for you: “Buy It Now” isn’t an auction, it’s a sale. “Buy It Now” represents a marketplace, not an auction house. There are big differences between the two.
1. Marketplaces are about listings, auctions are about engagement and participation
2. Marketplaces are about massive inventories (think Amazon, eBay, Overstock), auctions are about the right inventory
3. Marketplaces are about “right buyer, right time”, auctions are about “items, at the right price”
4. Marketplaces, due to large inventory volume, suffer from low sale velocity / horrendous sales ratio. Auction houses (when done right) offer great selling ratios (Bido’s sales ratio is 1:3 - 1:4)
So the lesson here, and we may be on my own thinking so, is that following the leader does not mean doing the right thing. If the leader got it wrong, by following, inevitably you will get it wrong as well. The solution is to think independently, think critically, do not take anything for granted. eBay is a dinosaur, they have not innovated for years. Why anyone would follow that is just beyond me.
Have a great day,
Sahar
Today’s upcoming auctions on Bido are:
11/19/2009 10:31 AM EST: xwn.us
11/19/2009 11:10 AM EST: frenchvanilla.info
11/19/2009 12:00 PM EST: desktopcomputersale.com
11/19/2009 12:02 PM EST: celebritypoets.com
11/19/2009 12:05 PM EST: renovatedboats.com
11/19/2009 12:19 PM EST: rightspring.com
11/19/2009 12:23 PM EST: waterdamageprevention.com
11/19/2009 12:26 PM EST: copydemo.com
11/19/2009 12:28 PM EST: washingtongems.com
11/19/2009 12:29 PM EST: appraisal.la
11/19/2009 12:30 PM EST: santaanajob.com
11/19/2009 12:31 PM EST: universalstroller.com
11/19/2009 12:32 PM EST: crosscake.com
11/19/2009 12:33 PM EST: booksinmylife.com
11/19/2009 12:34 PM EST: unlock.cc
11/19/2009 12:35 PM EST: vipwebhost.com
11/19/2009 12:36 PM EST: newyorkcamping.net
11/19/2009 12:37 PM EST: legalbarexam.com
11/19/2009 12:38 PM EST: ultimate.ws
11/19/2009 12:39 PM EST: samedayloan.net
11/19/2009 12:43 PM EST: plantcontrol.com
11/19/2009 12:45 PM EST: smokingandlungcancer.com
11/19/2009 12:46 PM EST: apxx.com
11/19/2009 12:49 PM EST: barelylistening.com
11/19/2009 12:50 PM EST: singlesimages.com
11/19/2009 12:51 PM EST: coketown.com
11/19/2009 12:52 PM EST: suet.info
11/19/2009 12:52 PM EST: seattletravel.org
11/19/2009 1:00 PM EST: dealbook.net
11/19/2009 1:01 PM EST: respirators.info
11/19/2009 1:02 PM EST: incorporateyourself.info
11/19/2009 1:03 PM EST: designerkidsclothing.info
11/19/2009 1:04 PM EST: mortgage–lenders.net
11/19/2009 1:04 PM EST: vegasexterminators.com
11/19/2009 1:05 PM EST: usedpickups.info
11/19/2009 1:06 PM EST: juegovideo.net
11/19/2009 1:07 PM EST: dicers.net
11/19/2009 1:08 PM EST: designeruk.info
11/19/2009 1:09 PM EST: anticorrosives.net
11/19/2009 1:10 PM EST: ecrude.com
11/19/2009 1:11 PM EST: assault.us
11/19/2009 1:12 PM EST: arranger.net
11/19/2009 1:13 PM EST: dnevaluations.com .net and .info package
11/19/2009 1:14 PM EST: deadbeatmom.com
11/19/2009 1:15 PM EST: disconnect.tv
11/19/2009 1:16 PM EST: amateurvideos.me
11/19/2009 1:17 PM EST: currencycirculation.com
11/19/2009 1:18 PM EST: graffitibuff.com
11/19/2009 1:19 PM EST: downloadablepoker.com
11/19/2009 1:20 PM EST: submissions.us
11/19/2009 1:21 PM EST: bibledeal.com
11/19/2009 1:22 PM EST: inexpensivedvds.com
11/19/2009 1:23 PM EST: courageous.info
11/19/2009 1:24 PM EST: gamesbabiesplay.com
11/19/2009 1:25 PM EST: theftinsurance.net
11/19/2009 1:26 PM EST: catrescue.info
11/19/2009 1:27 PM EST: dirtybomb.info
11/19/2009 1:28 PM EST: countynews.info
11/19/2009 1:29 PM EST: distancetosun.com
11/19/2009 1:30 PM EST: graduateloan.info
11/19/2009 1:31 PM EST: domainportfolios.org
11/19/2009 1:32 PM EST: datingimages.com
11/19/2009 1:33 PM EST: finalrule.com
11/19/2009 1:34 PM EST: hobbykits.info
11/19/2009 1:35 PM EST: hexup.com
11/19/2009 1:36 PM EST: poisonoussnake.info
11/19/2009 1:37 PM EST: filteredcoffee.com
11/19/2009 1:38 PM EST: satan.mx
11/19/2009 1:54 PM EST: watchworldwide.com
11/19/2009 2:01 PM EST: thinkevolution.com
11/19/2009 2:30 PM EST: printedflags.com
11/19/2009 2:31 PM EST: coffeeliqueurs.com
11/19/2009 2:32 PM EST: bestfriend.info
11/19/2009 3:00 PM EST: swingergroupsex.com
11/19/2009 3:30 PM EST: teenagelifestyle.com
11/19/2009 7:00 PM EST: bikinishop.in
11/19/2009 8:15 PM EST: citydetailing.com
11/19/2009 8:32 PM EST: savecasino.com
They have zero competition. Guess they dont care about innovating?
—-answer—-
Their Ignorance is bliss (for others). The subject is also a title for a book which will be written about eBay later in the future called “How Giants Fall”
Best,
Sahar
eBay used to be fun and addicting.
But now, they want to skip right to the sale and not wait 7 days for a commission.
I don’t buy there much anymore at all…
The thrill of the bid and the hope of catching a steal are the reasons people go to ebay (or, WENT to eBay)
Aron
—-answer—-
I used to buy stuff there years ago.. many years ago.
Best,
Sahar
There’s nothing wrong about it. There are multiple ways to entice buyers to exchange their cash for your goods or services. That is the purpose of selling - to increase bottom line.
Mixing sales methods such as auctions plus BINs under one roof can be an advantage. You attract and involve buyers with both preferences.
Touting a better sales ratio is a limited (and feel-good bean counting) view of success in this comparison, IMO. The real question is what is the total dollar volume of sales generated at each venue.
Having or offering a huge inventory draws a wider potential audience (which = a greater number of wallets. You can always have featured or focus items in the spotlight but offer the most items and make it easy to sort through them. That is a recipe for more dollar volume.
It’s not about following the leader. It’s about providing various options that different buyers prefer. Sedo is not pushing the “Buy It Now” on all its selelrs, it’s providing another option that their data shows to successfully entice more buyers to act.
And Ebay has incrementally innovated over the years. A relevant example is their giving a seller the option of listing BOTH a starting bid and Buy It Now button. Give the consumer more choices that they’re comnfortable with and they will have more reasons to open that wallet.
—-answer—-
I’m all for options but for a true auction house dynamics must preserved. If an auction house makes most of its money from “buy it now” by default, it isn’t an auction house anymore, but a marketplace. With a marketplace, there’s no pressure on sellers to list attractive prices nor there aren’t any incentives for for sellers to participate in an auction for the item. These dynamics, what makes a successful auction, are missing from many places, thanks to eBay and the slew of companies who follow the “leader’s advice”.
Do you really care if an auction house is successful or not? I tend to believe it is important that its customers, sellers and buyers, are successful. The more the better. If you want to count money I’m all for it, just divide the total revenue by the amount of sellers (those who actively list), to get a true “per seller” dollar value.
It would take one of our programmers about 30 minutes to code this, and that includes a trip to local Deli shop in between. With their finances/revenues, I’d expect real innovation, on functions, on UI, on sales ratios, on education, on better integration of social features, and the list goes on.
Best,
Sahar
Sellers like auctions where there are many interested buyers. Buyers often will prefer a reasonable buy it now rather than risk a competitive bidding situation. I believe there is a place for both formats. For lower-end inventory, probably the best solution is a fixed price with a reserve the seller is willing to accept.
—-answer—-
I believe you are right, there’s place for both formats. I just think there are certain dynamics which could make things better, and are currently not out there. The current system make existing auction houses (sedo, eBay) look and feel more like marketplaces, and in the process abandon to a large the agree the auction model.
Best,
Sahar
Agree they got it qrong but not for the reason you explain.
They got it wrong for these reasons:
1. Massive seller fraud scared away many buyers who previously created a robust purchasing base
2. They continually crapped on their powersellers by raising fees much faster than inflation and competing sales platforms. In 2005 there was a we’ve had enough movement (I was part of it) and since then, millions of valuable products that would have been sold, shipped and handled by their most reliable merchants left. (this however was a boon for domains as these individuals began developing their own sites.
3. With the advent of shopping carts, keyword sophistication and other easy online tools, even more reliable sellers migrated and used their own platforms.
This is 99% of the reason
—-answer—-
Some of those you listed make sense as well, however they got it wrong in few areas. My focus was on the auction dynamics.
Best,
Sahar
I think you need to give buyers and sellers options, and BIN is one option. Some people don’t want to wait 7 days to monitor a small auction. Sedo is still very much an auction site, with dozens of auctions ongoing at any time. Remember ebay still owns Paypal, which is a huge asset. When ebay started the web was still young and growing, now there are so many competing sites to buy products at, the growth can’t be there anymore.
Sahar,
What you said reminded me of the following story.
In Russia before the Glasnost, there used to be big lines for food, clothing etc., even in the cold winter and times were not easy. One wintery day Gorgi goes down the street and sees a long long line. He goes up to the man at the end of the line and asks him what is this line for? What are they giving or selling here? The guy didn’t know but said that he saw this long line and figured it must be something important so he joined the line. And so Gorgi went to the person in front of that man, and asked him the same question. and he got the same answer. “I saw the long line and figured that it must be something important so I joined the line”. Gorgi continued on to the next person in line and got the same answer. Finally, he decided to bypass the whole line and so he came up to the person who was first and line. Gorgi saw the man standing proudly and he said to him: ”What is this line for? What are you waiting for? What is being given or sold here?
The person look at him and said :”I don’t know”!
Gorgi, looked at him totally astounded and said :”What do you mean you don’t know?? How could this be ? what is going on here??”
The man looked at him and answered the following: “My shoe lace was lose and so I stopped and bent down to tie my shoe.”
Once I finished tying my shoe ,I saw someone standing behind me and so I decided to stay standing where I was. How many times do you think one gets the opportunity to be first in line??…
As you said so nicely Sahar: “So the lesson here, and we may be on my own thinking so, is that following the leader does not mean doing the right thing. If the leader got it wrong, by following, inevitably you will get it wrong as well. The solution is to think independently, think critically, do not take anything for granted.”
I would appreciate the opportunity to be in touch with you directly. Please be in touch.
Abe
Yeah! Great point. It’s funny how “buy it now” is promoted as a techie, post-dot-com-bust concept, when it’s really the old way of doing things. The first guy to stick a price tag on something was doing “buy it now”. Goes back to the ancient Sumerians or even earlier, I would guess.