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July 29, 2006

eBay Selling: eBay Store Fee Increases, Part 5

eBay Seller Reaction

Whenever eBay increases fees or makes significant changes of any kind, there is an outrage from eBay users and this time is no exception. There are screams of pain and vows to boycott and never use eBay again. Here is one seller's post on the eBay store forum:

Post title: "What eBay University Doesn't Tell You: Store Owner/Mom Forced onto Welfare
The effect of eBay's fee hike:"

Post content: "eBay Store Owner/widowed mother of 2 who must work from home in order to care for a disabled child will be put out of business and forced onto the welfare rolls as a result of eBay's fee hike."

My heart truly goes out to this woman. She is clearly in a bad spot and desperately worried. But the bottom line is that eBay owes only its stockholders. It is not eBay's responsiblity that this woman might be on welfare. A substantial part of my income comes from Google AdSense and Google has recently made dramatic changes to its AdWords program. Any change to AdWords will inevitably change AdSense revenues. Just as with the eBay changes, Google forums have been inflamed with Google bashing.

But the bottom line is that every job and every business has problems. Years ago I came to the realization that when these problems and changes arose I had two choices:

Choice A: wallow in rage and self-pity, loudly proclaiming about how unfair it all was

Choice B: accept that this is the way it is and get on with finding a solution.

The fact is that it's eBay's site, eBay's game, eBay's rules. If I want to continue to profit from either eBay or Google, then I have to accept their rules. If I don't want to play that game, I can leave. That is the choice that all business people face, like it or not. Yes, I know this is an unpopular observation, but it's still the truth. It's tempting to blame Big Bad eBay or Big Bad Google, and that's especially the case when we see a situation like the sad lady above. But years of choices brought her to her current situation - not eBay.

Am I Defending eBay?

No, not at all. I'm simply being as objective as possible. In fact, I think eBay has made some poor decisions and some choices that I don't understand at all.

First, at eBay Live in June, eBay promised no fee increases in 2006. Yet, one month later they announce what amounts to a 6% increase in store fees. Bad joss, eBay.

Meg Whitman, eBay's CEO, said the store inventory format has "diluted the magic of eBay," and that, "We are trying to get back to the essence of eBay." Oh, please, Meg! If she would say that eBay has made a financial error in heavily promoting stores and it's not economically viable to continue down that path, I could respect that.

This is similar to a recent eBay ruling that they wouldn't allow eBay sellers to use the new "Google Checkout" payment system. Google Checkout is a payment system similar to PayPal, which is owned by eBay, of course. Google Checkout has been dangling economic incentives to lure e-commerce sellers to its payment system. eBay expressed concerns for "safety" as the basis for its refusal. This is hogwash! eBay is protecting its turf and has a perfect right to do so. I am not going to sell my competitors products on my web properties and neither would you. I can respect that reasoning, so just admit it. Don't assume we're stupid and gullible.

In addition, the entire purpose of eBay Express (EE) seems to be compromised. EE is supposed to be a shopping system that will allow buyers to purchase from multiple eBay Express merchants yet pay for everything — including shipping—in a single, secure payment using PayPal or a credit card. If auction listings are going to appear in EE - and above store listings - how is this going to be different from regular eBay? At this time, it's only auction listings that include Buy It Now, but if they're pressuring sellers to get "the magic" back, will regular auctions soon be included? Only time will tell.

Posted by SydneyJohnston at July 29, 2006 3:17 PM

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Comments

Ebay has become a major public company now and Meg Whitmen is simply responding to the demands of the greedy shareholders. I guess they are in effect a monopoly and there price increase is going to open the door to new emerging online auctions like http://www.mightybids.com. So the new emerging much less expensive auctions may get there chance in the sun.

Posted by: Claude Bourgoin at August 2, 2006 1:04 AM

Meg Whitman, eBay's CEO has to follow directives from shareholders now that eBay is a public company or her own seat is in jeopardy if she fails to meet and exceed shareholder exceptions. It should be no surprise that the cost of selling on eBay increases after all they are somewhat of a monopoly in the online auction market.

This is not to say that this is a bad thing. There are a number of other excellent online auctions that offer excellent business opportunities for the online entrepreneur and have mush lower selling costs.

As eBay continues to raise its prices this will open opportunities for some other fine auction sites like www.mightybids.com and www.ebid.com to grow and prosper. We may in fact see the segmentation of online auctions market and if that happens some day we may blog about how eBay became a victim of its own success.

Posted by: Claude Bourgoin at August 2, 2006 3:00 PM

 
 
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