eBay Should Treat Users As If It Had Some Competition For Them
from the or-they-could-just-go-on-jacking-up-fees dept
Almost anytime we write anything about eBay, we get comments from frustrated users of the site complaining about some aspect of the company's practices. But so strong is the company's monopoly that no competitor has been able to make a dent in its business. Even the regular fee increases that it foists on its users haven't done much to turn people away. It's not surprising then that a group of angry customers are planning a symbolic one-day boycott of the company. They're upset at the company's recent price hikes, but, alas, not so upset they're willing (or able) to ditch the company for more than a day. The situation feels similar to Microsoft in the 90's. People always complained about their products, but because its position was so strong, it had little incentive to address these frustrations. eBay can keep exploiting its monopoly by raising prices or doing little to ease frustration, but in so doing it's only increasing the impetus for a competitor to work around it. And when a genuine alternative emerges, its frustrated base will be eager to ditch it.
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Well...
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Usually, people's 'maximum' price is elastic. That is, they might think its $20, but if they see someone else bid $21, they might be willing to go as high as $25, but only because there is percieved demand.
Many people don't use ebay's auto-bidding because its very seller-friendly. ;P The way to get low prices is bidding low.. even if you're willing to pay more, why should you throw away money if you can get it cheaper?
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Re: Re: Re: Well...
I've heard many people complain "I got beat by only $1, I would have raised my bid by $2 more to have won" to which I respond "if you were truly willing to go $2 higher, then why didn't you factor that into your maximum bid?"
If an item is worth $50 to you, then bid $50 - don't bid $25 and then gripe when someone else gets it for $26 at the last minute - go ahead, bid the amount you are actually willing to pay and then come back when the auction is ended - either you win the item at the price you're willing to pay, or else it sold for more than you were willing to pay.
Good rule of thumb for ebay or any auction - don't get wrapped up in the excitement and *don't* develop a sense of ownership - don't bid on an item early on and then start feeling like it's yours - people get very possessive and will start bidding higher and higher to keep "their" item from going to someone else. Often times people will pay more than suggested retail price!
I went to a live auction this weekend - they were selling a 1986 Mercury Grand Marquis with 25K original miles on it, the A/C didn't work and it needed a muffler- Kelly Blue Book values that car at a little over $1200 with no problems and in excellent condition - the auctioneer started the bidding at $7500 (WTF?!?!?) and slowly worked his way down to $2000 and someone bid! At that point I walked away and as I was getting in my vehicle I could still hear the auctioneer saying "I've got $2600, can I get $2700?" for a car that was worth less than half that amount...
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I never understood sniping..
It goes like this. With proxy bidding, your poker hand is shown immediately as soon as someone else bids above your bid. Then they can decide if they want to raise their proxy bix. (so can 500 other people.)
People DO raise their proxy bids when they lose. Its human nature. They even get notification that they were outbid by eBay just so they know they can go in and bid again.
Now lets pretend that there is no proxy bidding, and there is nothing but sniping (using a bot to place your bid for you, one second before auction close).
In that scenario people stick to whatever they put into the sniping bot. Because as soon as the snipe results are out, the auction is closed. That turns the public auction into a blind auction (where everyone gets to place one bid, and you dont ever get to see any results until the auction is over).
So sniping does the exact same thing as proxy bidding, but does so without disclosure (and recourse).
I'm with that other guy, I think sniping is bad for everyone (except those few that use it).
But I dont think it should be banned. I think instead that eBay should extend the auction for at least one hour after the last bid was placed. That will force disclosure of all the sniped bids, and make the effort silly.
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Re: I never understood sniping..
Are you saying that no new bids would be allowed after the official end of the auction, but that all proxy/sniped bids made before the end would play out until there is a single highest bidder?
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Re: Re: I never understood sniping..
No, I'm saying extend the auction up to an hour every time a bid is placed, if the auction is currently destined to close in less than one hour.
Obviously the "hour" is arbitrary, but it seemed like a good amount of time to me. They could of course, allow the seller to set that amount of time (within reason).
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Re: Re: Re: I never understood sniping..
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Re: Re: Re: I never understood sniping..
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Re: I never understood sniping..
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Rambling Low for Techdirt
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It IS a monopoly
Functionally, there is no auction site that competes with eBay (and no, a local auction house does NOT compete with eBay). No one comes within a thousandth of the volume eBay handles, nor the wide variety of markets it targets.
And no, Google doesn't have a monopoly, they have a majority. MSN and Yahoo still handle respectable, double-diget percentages of the market.
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Re: It IS a monopoly
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Re: Re: It IS a monopoly
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Re: Re: Re: It IS a monopoly
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Re: Re: Re: Re: It IS a monopoly
It's not like other industries where there are insane R&D or capital costs required before a new competitor can bring a product to market
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Re: Re: Re: Re: Re: Re: Re: It IS a monopoly
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Re: Re: Re: It IS a monopoly
A high barrier to entry is often cited as a reason for the lack of competition in the broadband market - it's been mentioned on techdirt numerous times. It's fairly expensive for a broadband competitor to run cable to every household and business in an urban area, especially if not every household or business will sign up with the company. That is a high barrier to entry and one of the reasons the incumbent telcos have a large share of the broadband market.
So tell me what the high barrier to entry in the online auction sector is? If there is no high barrier to entry, meaning anyone can start an online auction company with minimal resources, what is preventing others from competing?
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Re: Re: It IS a monopoly
So maybe its not technically a monopoly, but it walks like one and quacks like one.
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Re: Re: Re: It IS a monopoly
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Re: Re: Re: Re: It IS a monopoly
There IS a high barrier to entry in the online auction industry: a critical mass of users. I think other posters referenced this fact when they mentioned network effects.
When you say there aren't any, you're thinking in textbook economy terms: there's a high barrier to entry in the diamond industry because you need a mine and all the equipment that goes along with it. There's a high barrier to entry in the auto industry because you need experienced auto engineers and expensive auto plants.
But these are all tangible examples of barriers to entry. The prime barrier to entry that the online auction business presents is intangible: it's the selection and availability of a wide range of goods, as well as a large population of prospective buyers. If an auction site didn't offer that, I wouldn't buy/sell my stuff on there. In essence, eBay's customers/users are its primary assets.
Of course, I do understand where you're coming from. Any shmo can put up an auction website and technically "participate" in the online auction provider industry. So in that sense, there are few barriers to entry. But I argue that a startup like that would be uncompetitive because it has a low user base, and therefore would not have really "entered" the business.
I guess my point is that with social internet services, your users are your assets, because of the network effects they generate. The requirement of having a substantial user base is a valid barrier to entry in these scenarios.
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Re: Re: It IS a monopoly
Um. The entire community of buyers and sellers is the barrier to entry. You can't copy that overnight.
What is preventing Yahoo or Microsoft or Google or anyone from creating a competitive alternative online auction system?
Yahoo HAD an auction system. And it didn't even have the fees that eBay had. What happened? Not enough users and it shut down. Turns out that big community of users really is pretty tricky to create -- even for a site like Yahoo. Seems like a pretty big barrier.
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Re: Re: Re: It IS a monopoly
The important point in trying to explain this to people is that ebay has a resource that can't be bought by other firms at any price: users. The only way to enter the market is by getting those users some other way, which requires more ingenuity than ebay needs to have. That means that new firms actually have higher barriers to entry in the form of needing to develop such a vastly superior product that it can overcome ebay's network effects. This way, the users look like a consequence of success, and not a cause, which sits better in some people's minds.
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Re: Re: Re: It IS a monopoly
Come on Mike, most businesses cannot 'copy' anything 'overnight'. It takes time to build up a business. I'm not buying into this 'community of buyers and sellers' argument as a high barrier to entry. So eBay built a better mousetrap. Does that make them evil? Like I said being a monopoly is one thing. Abusing that monopoly power is another.
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Re: Re: Re: Re: It IS a monopoly
The why hasn't anyone else been able to do it?
So eBay built a better mousetrap. Does that make them evil?
Who said they were evil? All the post said was that if they kept this up it would make it easier for others to enter the market (because eBayers would actively be looking to jump to a new community) -- and could cause them a lot of problems.
It's not that hard to figure out. eBay has been able to maintain its market position because it has such a big community who stick to eBay. However, if they continue to piss off users, those users will actively look for alternatives.
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There are alternatives . . . They're just not grea
The crux of it was: for two cents, you could list an item for 30 days at a fixed rate ("Buy It Now"). You had to pay a monthly fee to maintain the store, and the final value fee was higher than a traditional listing. But it was very useful for selling things like obscure parts and other items that may require more time to sell.
After the rate increase, it's no longer economical to own an eBay store. Those who stick around will probably raise their prices, which will hurt buyers.
As someone who was pulled in by the eBay store idea, I learned something...surprise...much of the traffic from the store didn't actually start on eBay. It came from Froogle/Google.
Over the last two weeks, I started using Google Base. It's not great, but it's tolerable.
I'm in the process of setting up a store and I'm finding that the price I paid for the eBay store is equitable to that of a reasonable hosting package, SSL certificate and Google Checkout. And the fees are dramatically less (2%, period).
It's not an option for everybody, but it is probably an option for existing Power Sellers. If they lose enough of their large volume sellers, the site will have less appeal.
Interestingly, it is about the right time for player like Google to step in and leverage its existing user base. A bit of work with Google Base could probably net a good enough user experience... there's already plenty of products, they're just painful to find.
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more importantly...
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eBay's UI sucks
Maybe online auctions should go the way of open source. The marketplace is open to all auction sites, but the auction site provides its value add through its interface and added sevices. But like Microsoft, eBay would be crazy stupid to let go their hold on the dominating marketplace.
Think of it like email and search. You have lots of providers, but they all interact with shared content/users/market/etc.
The auction sites would still charge for placing items up for sale, but now the pricing would be based on a competitive market.
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Re: eBay's UI sucks
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buyers
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Ebay, Microsoft
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Just an idea
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your Bias is showing
demontrates that as much as the title.
"eBay should ...." who are you to advise what a successful business "should" do? Are you more successful? Have you developed a more profitable business model? A little objectivity goes much farther, and can make your point without being offensive.
Business is about PROFIT, not charity. As a consumer, you have the option not to use it, ie. boycott. But to say, "eBay should ... blah blah blah ... because they have a monopoly.... blah blah ... and they exploit .... blah" makes you sound like a whining teenager "its not fair, because I don't like it, and they have too much money and I don't have enough, and its not fair"
Move to France, or China, or Cuba, or some other country that values the socially needy over life, liberty, and the pursuit of happieness (ie money).
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Re: your Bias is showing EBAY ROCKS!!!
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Yahoo did try an auction site for a while. They were offering it for free (no fees). It closed down. Pity, I was hoping it would grow to the point to be a viable alternative to eBay. I think the competition would have inspired some improvements.
As far as sniping. I love it, I think it is a great way to get a good price on things. Course I love "Buy it Now," often a great way to get a good deal an avoid the rush at the end that drives the price up.
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profit does not need to be justified
That will spur competition, because somewhere someone will see a niche they can exploit, for their own profit.
Are you going to bitch when you have to pay for Craig's List one day? It's only a matter of time.
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At this point, I’d prefer to send out an email to my coworkers offering my iPod than to put it on eBay.
It would be a smart move if eBay recognized that it already does have competition: instead of selling on eBay, I can send out an email to my coworkers, or I can donate it to Goodwill, or I can sell it cheap to family or a friend, or I can (gasp!) just not sell it.
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eBay strike? Yawn...
Google, maybe? Google is going to do whatever Google wants, on their own schedule, just like they have always done to date. I seriously doubt that the current "petition" is going to have any effect at all.
Meanwhile, there are dozens of viable places to sell other than eBay. Most of the junk sold on eBay isn't really well-suited to the auction format, anyway, and there are several non-auction listing sites. My current favorite is Blujay. I don't sell as much stuff there as on eBay, but I get to keep more of what I make, and it's a lot less hassle. I'm currently pruning back my eBay listings to concentrate on other sites, and I have a little sales-blurb that I send with every eBay order that I ship telling the customer about the better deals they will be able to find on Blujay. That's how to impact eBay; word of mouth, one customer at a time.
For auction sites, check out OnlineAuction.com or ebid.com -- both are growing steadily, and are already a substantial fraction of the size of eBay.
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Re: eBay strike? Yawn...
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Re: eBay strike? Yawn...
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Doesn't ebay own all the patents?
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Re: Re: Re: It IS a monopoly
http://en.wikipedia.org/wiki/Barriers_to_entry
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sniping
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eBay Stores
Re: Sniping - greatest tool ever created. I predetermine what I am willing to pay for an item, set my snipe, and forget about the auction until it closes. If my snipe wins, great. If not, I have not paid more than I was willing to pay.
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Re: eBay Stores
I get the exact same outcome by using ebay's builtin proxy bidding.
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Sniping
I buy several items a year on eBay and use sniping on every one of them. I decide my maximum bid and submit it myself with about 5 seconds remaining in the auction. I have only one shot. The auction is blind to me the last 10-15 seconds. If other snipers have pushed the bidding higher than mine in those seconds, my bid will be rejected and not show as a bid. If not, my bid will be taken and then it becomes a choice of maximum bids whether from the previous high bidder or the snipers. If I win, it will be by the minimum increment, and I'll have paid a fair auction price, since I outbid everybody else. If I lose, the winner will also have paid a fair auction price, since he offered more than anybody else. The high bidder going into the last minute of an auction often wins, because his maximum bid is higher than the snipers want to pay.
If you can't make up your mind what your maximum bid should be, please don't complain to me. What you're complaining about, really, is that you don't have enough information -- you want to know what other people are going to bid before you decide. Tough. That's the reason I use sniping. I don't want to give you ANY information about my interest in the auction. If you outbid me, fine -- I have no regrets, since I already decided I wouldn't pay more. But I can't think of any reason I should want to help you figure out your bid by making my bid earlier.
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Ebay Frustrations
My most recent was attempting to get a list of email addresses that ebay uses so I can put EBay on my safe users list for spam filtering. Five attempts at explaining the request have resulted in five emails from EBay that all but repeat themselves
Makes you wonder if a human even reads the emails or if everything is a machine at EBay
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Re: Ebay Frustrations
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E-bay
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alternative site
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Trademe to rule the world
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Trademe to rule the world
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Re: Trademe to rule the world
In the meantime, there's always oztion.com.au which has enjoyed an increase in membership of around 13,000+ members in the past few weeks. Not bad for a country with only 20million people in it...
With any luck, Australia will become like NZ, where eBay is a second rate second best.
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More Options Needed!!!
Especially since you have such a huge population to support it. Please, please, please get trademe.com.au up and running ASAP! Cheers, Rebecca. :-)
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Ebays monopoly
EBAY Sucks
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Ebays monopoly
EBAY Sucks
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How to get a big companies attention.
State taxes should be collected...all/most other retailers selling into various states are required to collect taxes for items sold and paid to the various states.
Get the Fair Trades Commission off their behinds and looking into business practice such as who can and who can't use ebay's services and who decides.
Just a couple of thoughts ...right or wrong...free county?
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e-bay
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eBay Policies Need to Change!
And, to top it off, they still charged me the listing fee! Eventually, I got them to reverse the charge but I shouldn't have to ask them to do it! These types of policies/practices will hopefully allow a competitor to kill eBay.
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