Aug
4
As I discussed in my last post, eBay’s early success can be traced to the fact that the online auction was an early facilitator of the Long Tail economy. For decades, marketing efforts have concentrated on developing introducing products and services with mass-appeal due to the constraints of limited shelf-space and limited demand.
The internet provided merchants of niche products the opportunity to “aggregate demand [for these products] on a national or even global scale.”* eBay in particular was important to the development of the Long Tail economy because their online marketplace satisfied several important factors identified as key to the success of the Long Tail economy.
These factors are detailed in an MIT paper called, “From Niches to Riches: Anatomy of the Long Tail” and are divided into “Supply Side Drivers” and “Demand Side Drivers.”
Supply Side Drivers
As I noted above, traditional merchants were limited “by the same basic constraints: how many products can be provided in a limited amount of shelf space, and how many consumers in the local geographic area are willing to pay for these products.”* Brick-and-mortar businesses were confined to storefronts in expensive locations and could, therefore, only sell products that appealed to the mass-market. Niche items that had limited marketability to the consumers in their area were not a profitable use of their expensive shelf and warehouse space.
eBay helped change that. Merchants no longer needed to work out of high-rent storefronts in high-trafficked areas. Long Tail marketers could stock products of interest to niche communities in their garage or basement located in some remote part of the country. As long as they had a way to ship the products and access to the internet, niche sellers could use eBay market to a broad base of customers without the concern of the expense of a high-rent location.
Purveyors of Long Tail goods could count on eBay to promote their products to a global market. They were no longer constrained to the limitations imposed by traditional marketing venues such as print, radio and television advertising which would only reach limited audiences despite the significant expense involved.
Demand Side Drivers
eBay satisfied several key demand side drivers by providing consumers a centrals source and the mechanisms required to find the niches products that interest them. eBay accomplished this through organization and effective search tools. Before there was such thing as an effective search engine, eBay provided the central destination on the internet where consumers could browse for Long Tail products by category and sub-categories and/or conduct queries for specific items or features using their search feature.
There are several passive demand side drivers identified in the article which eBay has attempted (half-heartedly) to implement that are also important to Long Tail marketing. “Sampling tools, such as Amazon.com’s samples of book pages and CD tracks, allow consumers to learn more about products in which they might be interested.”* User reviews and recommendations also take some of the risk out of the equation for the Long Tail consumer. Additionally, “recommender” services such as NetFlix’s are an effective way of developing the niche marketplace based on the experiences of other consumers with similar tastes (eBay’s version needs some work! ). An eBay interested in developing into a mature Long Tail marketplace would certainly be well served expending some resources in developing and marketing these tools.
Where Does eBay Stand Now?
Alas, given the factors identified as significant to the success of the Long Tail marketplace, eBay seems content to implement policies and field technologies that move the auction site in the opposite direction.
Best Match is optimal for listings with mass-market appeal - not collectibles or niche items. This is in direct contradiction to the circumstances that made it popular and as the original niche marketplace to begin with - the effective organization and search.
eBay has tested the waters of user reviews and recommendations (so successful on Amazon), but has not devoted a significant amount of corporate effort into making these tools a significant feature on the site.
By implementing policies that are designed to encourage the listing and sale of products with mass-market appeal, eBay is implicitly discouraging the Long Tail market. The management has recently created a special category of Power Seller that provides special treatment for super sellers of mainstream products such as Buy.com. Additionally, eBay’s most recent promotion was aimed at increasing the number of fixed-priced listings - a selling format that is much more common in the mass-market product arena than the Long Tail market.
It’s ironic that as eBay implements changes to make it more like Amazon.com, Amazon is broadening their market to encompass more niches. Good thing for Amazon, especially since they have the tools to accomplish the task!
* Brynjolfsson, Erik, Hu, Yu Jeffrey and Smith, Michael D.,From Niches to Riches: Anatomy of the Long Tail. Sloan Management Review, Vol. 47, No. 4, pp. 67-71, Summer 2006
Available at SSRN: http://ssrn.com/abstract=918142
Jul
18
eBay Wants Me to Buy Dirty Pictures!
Filed Under Miscellaneous | 3 Comments
When I was writing my review of A Mini Guide to Using eBay & CafePress to Sell Your Photography recently, I did some research to see what kind of photography was listed on eBay and what was for sale. Specifically, I searched active and closed listings using the terms “photograph” and “photo print.“
The search results returned a variety of items for sale - mostly pictures of celebrities, nature, and vintage images. I was actually surprised at how few dirty pictures showed up in the search results. You probably won’t believe me, but I certainly did notclick thru on any of those those listings that were selling naughty pictures. My wife, an avid photographer, was helping me write the story and looking over my shoulder the whole time. (Now do you believe me?)
At any rate, eBay seems to strongly associate an interest in photography with an interest in pornography because whenever I go to eBay’s home page, they splash it with smut. Here’s what they are encouraging me to bid on (I’ve used the smudge tool to keep this a family-safe site): Read more
Jul
4
Here in the States, today is Independence Day. This is perfect occasion to blog about declaring your independence from eBay, but after thinking about it for a while, I think discussing preparations for independence is more appropriate. After all, while Americans declared independence in 1776, we didn’t achieve it until 1783.
Your independence from eBay might take a while as well. Please note that I have never advocated leaving eBay altogether in this blog (although you should be prepared to). My point continues to be that true independence means that you don’t rely on any one source for your income - especially eBay. While auctions were the origins of my online business, my online efforts new generate income through a variety of sources. Auction sales are just a small portion of my internet revenue.
That’s how it should be for you. So to help you celebrate “Prepare for Independence Day,” today I’m offering some ideas on how you can expand your eBay business to develop multiple sources of income.
First, think about the reasons why you were attracted to selling on eBay in the first place…
- Easy to do
- No financial risk
- No technical skills required
- Lots of targeted traffic actively searching for your type of product or service
- Fun and excitement
- Etc., etc.,
These positive attributes paint a rosy picture of e-commerce, and for the most part, this “picture” is valid. That’s why entrepreneurs (like you) continue to join and stay with eBay. The payback potential is high and there is a strong sense of community among auction sellers. On a daily basis, you get to meet and/or do business with people who share similar interests to yours.
However, it’s only after you have been in the auction business for awhile that the blush begins to fade a bit. eBay requires real work just like any other real business. And therein lies the rub… all your hard work to succeed is not building a business of your own with true value (i.e., one that can be sold). It’s really building eBay’s equity. And we all know that eBay is presently worth billions of dollars… and growing.
Here’s why eBay has the upper hand at this point (later on, you will see how to “turn the tables” on eBay) …
- eBay gets you, and millions of others, to do the tough, physical part (sourcing, packaging, shipping, payment collection, etc.) for them, from home, as free labor. So they don’t ever need to own, warehouse, or ship a single product.
- eBay collects fees for each transaction – which now adds up to billions of dollars per year.
- eBay owns all the traffic — their automated software runs the network of buyers and sellers. This is not good news for you because if you don’t own your traffic, you can’t own your business.
So, realistically, you are working for eBay. You are depending on eBay for what is basically an hourly wage, while your “business” fails to build its own equity.
Meanwhile, eBay is constantly changing the rules in the middle of the game. Consider the (significant) policy changes implemented just in the five months prior to the publishing of this post:
- Best Match
- Feedback changes
- Fee changes
- Ban on the sale of digital downloads
- Mandating maximum allowable shipping charge in some markets
All those hours of scrounging for boxes, packing sold items securely, trips to the post office, e-mail correspondence, payment collection… and it’s eBay who is profiting! Arggh! It’s time to turn the tables!…
It’s time to take back your business and dreams!
But wait! There is no cause for panic… you don’t need to stop your online auction business (it’s making you money) or start over (continue to build upon what you have now). You just need a web presence, an understanding of the difference between having a website and an internet business, and the motivation to develop and follow a business plan that provides financial independence.
Take control of your business and its future. Here’s how…
STEP #1) Own your targeted traffic – This is essential. As was mentioned earlier, if you don’t own your traffic, you don’t own your business. So how do you eliminate your dependency on eBay for traffic? Simple… build a keyword-focused, content-rich and search engine-optimized web site related to your theme. As you steadily add web pages, more and more interested, targeted traffic will come directly to your site through search engines rather than via eBay. Building web pages with high search engine rankings is the most effective way to solidify your own traffic foundation. And that foundation is an essential prerequisite for the next step…
STEP #2) Diversify – Use eBay selling as only onepart your monetization plan. Once you see your traffic gaining momentum, introduce two or three additional income streams that fit with your theme. One of them will, of course, be your already established auction business. By opening up other options, eBay no longer has the same grip over your business as the sole money-making source. This independence allows you to use eBay, rather than the reverse – eBay using you.
Diversification helps you make every visitor count. For illustration purposes, let’s say that you specialize in US commemorative coins. Your monetization plan might look like this…list a few coins at eBay on a regular basis, sell coins from your site, promote your locally-based coin appraisal service and/or recommend a couple of quality coin-collection books at Amazon. Chances are your site’s high-value content will PREsell your visitors to follow through and generate income from at least one of those streams. (And speaking of informative content, remember to check out Google’s AdSense program as another revenue-producing option for your site.) Diversification will definitely improve your bottom line — which leads nicely into the third and final step…
STEP #3) Build equity – The way to do this may surprise you… publish a quality, information-packed email newsletter. If you do that, you will easily build a large subscribers’ address list. This list is more than just a list of names and e-mail addresses. It is your lifeblood. It will help you generate recurring sales (or commissions or leads, etc.). This is THE essential ingredient for sustaining your business longterm. Sure, you’ll get some signups to your newsletter from your eBay traffic – especially, your buying eBay customers. But now you can really grow your own list and build a credible satisfying relationship with present and potential customers.
So why are these three steps so critical?…
If eBay tripled their fees tomorrow, or did something else that would have a detrimental effect on your auction business, you would still have all your traffic generated by your site, your newsletter subscribers’ list, and your customers. And you could react assertively and immediately to eBay’s actions by either…
- Moving your visitors to other auction sites in a flash or by switching some of your auction business to a category-specific auction option.
Shifting greater emphasis to other monetization models. - Modifying your newsletter content appropriately, so that recurring business generates other types of revenues (for example, direct sales instead of auctions).
The bottom line?
YOU own your business (and not eBay). You depend only on yourself. And your equity is yours. A WIN situation for you!
eBay will come to love it because you will be sending them more traffic than they send you. You will be reversing their leakage problem (i.e., once someone buys from a seller, many simply “buys direct” the next time.) A WIN situation for eBay!
It looks like the auction selling “picture” just turned very rosy again!
Jun
9
Huge List of PayPal and eBay Phone Numbers and eMail Addresses
Filed Under Miscellaneous, PayPal | Leave a Comment
The Consumerist Blog just published a massive list of internal eBay and PayPal phone numbers and email addresses (via Screw-PayPal.com). Internal eBay phone numbers are one of the most closely guarded business secrets in the industry. That’s why this compilation of contact information is such a huge deal.
From The Consumerist:
Here are over 450 pieces of internal email addresses and phone numbersto reach a real live human at Paypal/eBay. Anyone who has ever experienced Paypal unfairly freezing their funds, Paypal siding with someone who scammed them and losing money because of it, Paypal seizing funds from their bank account or credit card without permission, or just the simple impenetrable, rude, and useless customer service can surely appreciate this list. There’s contact info for executive relations, high executives, practically every department, and more, both US and international. The information comes courtesy of Screw-Paypal.com, a site started by a man who says Paypal wrongfully denied access to his funds for four years.
Here’s a link to the PayPal and eBay contact information on Consumerist.