I've been on Ebay since

Scott Bringhurst — Mon, 20 Oct 2008 21:52:49 -0400

I've been on Ebay since 1997. I never considered leaving until very recently. My opinion of Ebay, both as a buyer and a seller has done a 180 in the last six months. This time last year, I bragged on Ebay to everyone. This time, this year, I have nothing good to say about Ebay.

I am (or was) a small seller. I made about $15,000.00 last year. I have about 1300 feedback with 100% positive and one neutral.

I used to list about 100-200 items a month. Now I list . . . nothing.

Ebay thought they would motivate me to be a better seller by tying me to a chair and exposing me to a negative feedback/anonymous DSR beating. I don't take kindly to intimidation. I was a near perfect seller. Now I hardly sell anything at all. It aint worth the risk.

Quite frankly, Griff is out of touch with reality. Clearly, he has drunk the Kool-Aid.

eBay's formula: An easy-to-use online marketplace and a dedicated community

David Cotriss — Thu, 16 Oct 2008 13:18:22 -0400

(The following is part of the Standard's First To Market special feature) eBay is synonymous with online auction sites, and for good reason: Since Pierre Omidyar launched the site in September 1995, the service has gained nearly 84 million active users worldwide, buying and selling all types of merchandise at prices that are often determined by buyers. It's a classic marketplace play that lets geographically dispersed parties buy and trade goods without going through several layers of middlemen. eBay has proved to be very popular, not only because of the service it provides, but also because users have helped spread the word and recruit new buyers and sellers.

However, eBay was not the only online auction sites in the early days. What enabled it to rise above the competition? Jim Griffith, eBay's dean of education, told The Industry Standard what he thinks were the driving factors. "[Omidyar's] concept for the site was simple: a place online where people could trade directly with each other. Although there were a few other places online where buyers and sellers could meet and trade (UseNet was the first and was popular at the time), Pierre's website was unique in that it offered sellers an online auction format for selling their merchandise. The auction format proved to be ideal in allowing buyers (and to some extent, sellers) to set the value of the seller's items."

Griffith says that in the mid-1990s, there were only a handful of websites that offered a buying and selling platform similar to eBay's. "Probably the earliest was Haggle.com which had a look and feel like eBay," he says. However, Haggle.com never gained serious traction and disappeared a few years after eBay's launch (the domain now features a shopping comparison service). Other early auction sites included Onsale.com, AuctionUniverse, FirstAuction.com, and CMGI-backed UBid. Of those companies, only Onsale.com remains in operation, and is now a discount computer and electronics retailer.

The lack of serious competition allowed eBay to solidify its lead. "For the first four years of the company's existence, there was no serious challenge to eBay's business model by a competitor," Griffith explains. "These years provided eBay the time to build and strengthen its 'first to market' advantage. By the time a serious competitive challenge to eBay's person-to-person marketplace was launched (first by Amazon in 1999 and later by others), the dominance of eBay's marketplace position was already well established and proved to be nearly impenetrable." He adds that many of today's competitors are niche marketplaces that cater to collectors and buyers and sellers in specific, individual categories.

The importance of the community aspect of the site cannot be understated. Griffith says that while luck and timing played a role in eBay's success, the dedication and enthusiasm of eBay's initial members were also crucial: They proved to be serious boosters of the site, and created a great deal of viral marketing for eBay -- and established a strong community.

"Probably the smartest thing Pierre did was create an open chat board on the first version of eBay, ostensibly as a place where members could visit to ask questions that other members could answer," Griffith says. "This chat board formed the nexus of what would become known as The Community. This Community was made up of buyers and sellers (members were and are today often both) who used the chat board as a place to meet and exchange ideas."

Griffith says that having access to each other gave members the spark needed to go out and talk about eBay to friends and family, and that this grassroots-level promotion started "the unstoppable momentum that resulted when more buyers came to eBay, bringing more sellers, who brought more buyers, who brought more sellers, and so on."

A series of timely changes have also proven crucial to eBay's success. Griffith says one key example is the introduction of the fixed-price format in 1999. "This new, non-auction format opened eBay's market to more inventory for commodity items like clothing, consumer electronics, media, and automobiles," he says.

Others changes include the purchase of online payment leader PayPal and the aggressive international expansion that began in 1999. "By expanding the eBay brand across the planet, eBay was able, with only a few misses, to nearly eliminate the traditional boundaries of the past that had prevented true consumer-based trade to flourish," Griffith adds.

However, eBay has hit a few rough spots in recent years. Recent changes have generated significant controversy among both buyers and sellers on the site, particularly its recent emphasis on attracting more fixed-price sellers using a format similar to Amazon's auctions, reducing upfront listing fees for sale items and increasing sales commissions. Many sellers believe eBay is abandoning its auction-based roots.

But Griffith says the criticism is hardly representative of the entire seller population, and points out that the changes have helped buyers and sellers.

"All of the changes we have made over the last year are [aimed at] improving the buying [and selling] experience," Griffith says. "Adjusting our fee schedule to lower upfront listing fees encourages sellers to list more inventory on the site. Limiting payment options to online payments creates a consistent checkout experience for both the buyer as well as the seller. Adding a new finding feature, Best Match, lets buyers find specific items faster and with fewer irrelevant results. Fee discounts based on performance, more stringent policy and enforcement for buyers who attempt to defraud or extort a seller, and removal of negative feedback left for sellers by non-paying buyers [are all added benefits]."

Griffith emphasizes that auctions will continue be an important part of the mix. "There would be absolutely no reason to break with this tradition," he says. "Auction format listings are here to stay on eBay."

(Image: eBay, circa 1997. Source: Internet Archive)

Read the rest of the First To Market special feature:

The Industry Standard - eBay's formula: An easy-to-use online marketplace and a dedicated community - Comments

I've been on Ebay since

eBay's formula: An easy-to-use online marketplace and a dedicated community