eBay Users And Shareholders Clash Over Management

from the on-the-(chopping)-block dept

Mon, Aug 21st 2006 8:21am — Joseph Weisenthal

It's no surprise that as the chorus of complaints about eBay has grown louder, the company is in the midst of a major slump in its stock price. These things are bound to go together as the company's financial health is based on that of its buyers and sellers. And many of the sellers' complaints go right at the core issues facing the company. Multiple sellers have noticed, for example, that they must list items many more times to get them to sell than they needed to a year ago. In turn, sale prices are on the decline as well. And while it's usually shareholders that agitate for management changes, in this case, the company's merchants are calling for changes at the top. This puts the company in a unique quandary. Most companies don't have the same classes of stakeholders. Yes, companies have customers to satisfy in addition to shareholders, but customers rarely care about management. And if customers stop liking a product, they can go elsewhere. That's not (yet) the case with eBay users. Obviously, shareholders are frustrated by the company's performance of late, but in a time of difficulty, changing top brass might only add to the uncertainty. Considering that a growing number of internet companies are predicated on handing control over to the user, a la eBay, how the company handles this dilemma will be an important case study for others to watch.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

33 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

dorpus, 21 Aug 2006 @ 8:40am

Why do they succeed?
Why does anyone want to pay a fee to sell anything? What's wrong with just getting rid of your belonging for free via craiglist or something?
[ link to this | view in chronology ]
- Wizard Prang, 21 Aug 2006 @ 9:47am
  
  Why do you pay a realtor?
  "Location, location, location"
  
  You're not comparing like with like - Craigslist is great for selling items locally. eBay is pretty much international, and has fairly decent tools to automate the process of selling and searching.
  
  Personally, I use both. While eBay costs (too much, IMO) and Craigslist doesn't, eBay stuff sells far more often. In a nutshell, you pay for the service.
  
  Craigslist's "free-ness" actually works against it - there is far more spammage, which means that good stuff drops off the front page more quickly, which encourages multi-posting.
  [ link to this | view in chronology ]
- Scott, 21 Aug 2006 @ 10:18am
  
  Re: Why do they succeed?
  Ebay owns Craig's List!!!
  [ link to this | view in chronology ]
- Tony Fernandez, 24 Aug 2006 @ 6:22pm
  
  Serious Fraud on ebay
  I have some Vital Information about regular on-going Serious Frauds on ebay.
  Please contact me a.s.a.p.
  Thanks
  Tony
  [ link to this | view in chronology ]
Sanguine Dream, 21 Aug 2006 @ 8:56am

A middleman...
Ebay is nothing more than a dot com middleman. It is true the Ebay is a very popular selling site but they charge you money to sell your item. I understand that they have to make a profit but that just seems unfair.
[ link to this | view in chronology ]
- Anonymous Coward, 21 Aug 2006 @ 9:32am
  
  Re: A middleman...
  Yeah, it's completely unfair...it's like they expect some sort of compensation for people using their services.
  [ link to this | view in chronology ]
  - crazy solutions, 21 Aug 2006 @ 11:12am
    
    Re: Re: A middleman...
    well said, they are there to make a bit of money by providing a service. If you dont like the cost there is a simple solution... dont use the service.
    [ link to this | view in chronology ]
  - crazy solutions, 21 Aug 2006 @ 11:12am
    
    Re: Re: A middleman...
    well said, they are there to make a bit of money by providing a service. If you dont like the cost there is a simple solution... dont use the service.
    [ link to this | view in chronology ]
- Tony Fernandez, 24 Aug 2006 @ 6:20pm
  
  Re: Serious Fraud on ebay
  I have some very Important Information about Fraud on ebay.
  Contact m Urgently please
  [ link to this | view in chronology ]
Angry Rivethead, 21 Aug 2006 @ 9:22am

I agree...
They're kind of dated. Listing prices for stuff, as high as they are, are just plain nutty. You could argue that essentially what you're paying for is insurance. However, paying $0.30 to list an item thats $5 is a little steep.
[ link to this | view in chronology ]
- Tony Fernandez, 24 Aug 2006 @ 6:23pm
  
  Serious Fraud on ebay
  I have some Vital Information about regular on-going Serious Frauds on ebay.
  Please contact me a.s.a.p.
  Thanks
  Tony
  [ link to this | view in chronology ]
Drama2Sell, 21 Aug 2006 @ 9:25am

Whats wrong with paying a fee?
Sorry, I have no problem with Ebay charging fees--if you want to build up a store, purchase keywords, advertise online, go right ahead.

But chances are you are going to spend a lot more money and have a lot more headaches, and probably get a lot less traffic then if you stuck your item up at Ebay.

I am not an Ebay power user by any means, but the items I have sold have always done a lot better then what I would have done on my own.
[ link to this | view in chronology ]
- Howard, 22 Aug 2006 @ 8:10am
  
  Re: Whats wrong with paying a fee?
  Great Comment!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Greed is what these folks drive on....They forget eBay is a business to trying to make money in profit. The lose is miniscle compared to what a brink & motar store would cost along with advertising & marketing. eBay does it all. These greedy sellers need to lighten up or open a brick & mortar store or start their own website....then see how fortunate they really are. What eBay ought to do is make the sellers pay an internet store lease as well.
  [ link to this | view in chronology ]
- Tony Fernandez, 24 Aug 2006 @ 6:24pm
  
  Serious Fraud on ebay
  I have some Vital Information about regular on-going Serious Frauds on ebay.
  Please contact me a.s.a.p.
  Thanks
  Tony
  [ link to this | view in chronology ]
Haywood, 21 Aug 2006 @ 9:32am

What they've done; is kill off their core businnes
There is no longer any point to selling anything under $5 unless you jack the shipping to cover the fees. The older sellers have adjusted, but attracting new sellers is harder once they see what net is going to be. They then decide to just give or throw those items away. It is also hard for a new buyer to get past $5-10 shipping for a $0.99 item.
[ link to this | view in chronology ]
rijit (profile), 21 Aug 2006 @ 9:35am

Depends on the product.
I sell on Ebay, even had a nice little business going for a bit. I have moved on to other things since then tough. I have respect for the people who turn it into a big business, takes a lot of work. What I found using Ebay is that it depends on the product. Most common or used item will won't sell for a decent price on Ebay unless they are high dollar items to begin with, are rare items that collectors want, or are new items in a box (still have to be higher dollars items to get a good price).
[ link to this | view in chronology ]
Howard Lee Harkness, 21 Aug 2006 @ 9:49am

Nothing at all wrong with ebay...
There is nothing wrong with ebay (or paypal) that a dose of viable competition wouldn't cure in a heartbeat.
Ebay has long taken advantage of a natural tendency on the internet that the #1 occupant in any given niche tends to dominate it to the point that the next 10 players together are less than 10% of the market. That appears to be changing, since according to the auction watch at http://www.powersellersunite.com the next 10 players are approaching aggregate market share in the neighborhood of 20%.
One reason ebay is losing its luster is that it has attracted a large number of listings that aren't really well-suited for the auction format -- which is a niche in which some other marketplace sites are gaining market share (my favorite is http://www.blujay.com). With the staggering number of commodity listings, the prices have suffered, and the buyers have become less excited.
Ebay also does not have any effective way of dealing with fraud, and have become a magnet for that sort of activity.
Oh, they do have "police" -- but only for PR purposes. It takes them *weeks* to find the obviously fraudulent listings (by which time the fraudulent listing is completed), but less than 24 hours to find and de-list *any* auction that mentions that they have some competition. Put "wagglepop" or "fee-hike protest" anywhere in your listing, and it won't last an hour.
For information on several alternatives to ebay, see http://www.powersellersunite.com

Meanwhile, another storm is forming on the horizon: Google. Already, the combination of GoogleBase, Froogle, and Google Checkout is a viable alternative for many sellers -- and can be far more cost-effective than ebay. With a few minor improvements, Google could easily render ebay to a small footnote in internet history.
[ link to this | view in chronology ]
- R Edwards, 31 Aug 2006 @ 5:35am
  
  Re: Policing Ebay
  I too have found, as an ex-Ebay user, that they dont worry "too much" about fraudulent sellers when told about them. I, myself was accused by Ebay of being a "fraudulent" seller. Innocently I tried to sell a pair of shoes that I had bought believing them to be genuine Burberry. Apparently I was noticed by a Burberry PR person and taken immediately off the site. When I protested to Ebay that I was innocent I was told that I had to take part in a questionnaire. After my suspension, which was over a week, I had to take part in a questionnaire which I told would help me understand what I was doing wrong. I knew where I went wrong and didnt need to do a questionnaire like a naughty child sitting in a corner in the classroom. When I told Ebay there were fakes and carefully worded designer fakes I was told they dont monitor what is on their site. They rely on people to inform them when it happens. So basically they are happy to take the money off sellers but when it comes to stopping designer fraud (genuine not innocent) they are not really interested. I have stopped selling on there as I found if I sold cheap items for say £1 after all the costs taken off I was lucky to get 25p for that item. I might as well throw it away and save myself the hassle of trying to sell it.
  [ link to this | view in chronology ]
- R Edwards, 31 Aug 2006 @ 5:35am
  
  Re: Policing Ebay
  I too have found, as an ex-Ebay user, that they dont worry "too much" about fraudulent sellers when told about them. I, myself was accused by Ebay of being a "fraudulent" seller. Innocently I tried to sell a pair of shoes that I had bought believing them to be genuine Burberry. Apparently I was noticed by a Burberry PR person and taken immediately off the site. When I protested to Ebay that I was innocent I was told that I had to take part in a questionnaire. After my suspension, which was over a week, I had to take part in a questionnaire which I told would help me understand what I was doing wrong. I knew where I went wrong and didnt need to do a questionnaire like a naughty child sitting in a corner in the classroom. When I told Ebay there were fakes and carefully worded designer fakes I was told they dont monitor what is on their site. They rely on people to inform them when it happens. So basically they are happy to take the money off sellers but when it comes to stopping designer fraud (genuine not innocent) they are not really interested. I have stopped selling on there as I found if I sold cheap items for say £1 after all the costs taken off I was lucky to get 25p for that item. I might as well throw it away and save myself the hassle of trying to sell it.
  [ link to this | view in chronology ]
- ex-ebayer, 1 Sep 2006 @ 1:14pm
  
  Re: Nothing at all wrong with ebay...
  With regard to fake selling on Ebay. You can go through the site anytime and find about a dozen fakes in about 10 minutes. Items that are titled with designer names are then described in description as "Gucci" or whatever lookalike, or similar to. Some are just blatantly described as Gucci lookalike in main description. But Ebay say they dont check these things out. They are making millions and yet they havent anybody policing the site to check on the fakes being sold. If I can find 12 in 10 minutes probably that number could be over 100 minimum if I looked for a couple of hours.
  [ link to this | view in chronology ]
UniBoy, 21 Aug 2006 @ 10:26am

eBay fills the niche
I have thoroughly enjoyed Ebay as a great resource for both buying and selling hard-to-find, used, niche items.

If you are a buyer looking for easy-to-find, non-niche items, chances are you will go to your local or favorite online retailer. After all, why would you choose "Dave's TVs" on Ebay over Circuit City for the same item at the same price?

If you are selling easy-to-find, non-niche items on Ebay, then your dilemma is the same - you are competing with the Walmarts and the Circuit Citys for most of your prospective buyers. So, what do you offer to differentiate yourself?
[ link to this | view in chronology ]
tehdirtaddict, 21 Aug 2006 @ 10:47am

The Fees
Insertion fee, picture fees, starting price fee, buy it now fee, fee and fee and more fees.

Those are a barrier of entry for new sellers. You need to seel hundreds of items in order to offset the fees. And selling hundreds requires you to invest a ton of time on ebay. Who can afford that lately?

Amzon marketplace is right now the spot allowing to list an item fee-free. But the selling fees are outrageous.

A good mix between No insertion fee, decent sale fee and google checkout can be a winner.
[ link to this | view in chronology ]
Prof_X, 21 Aug 2006 @ 10:49am

Three Hit Combo (Paypal included)
With only 63 transaction, and I've notice the changes. Yes, I've been involved with fraud, which is, two years and counting, still 'pending' at the moment, but thats not the major problem. The fee(s) they're charging is just plain ridiculous.

One, sellers have to deal with the listing fee; .30 cents isn't much for someone who uses it off and on, but I can see why it's a problem for powersellers. Two, if you were successful in selling, eBay wants a percent of it; which isn't bad if you're selling used electronics... Three, if the customer opt for Paypal, which I no longer perfer, they take a percent of the money transfered... They may be small hits, but at the end of the day they'll do a number on you...

This doesn't even take into account the sudden influx of products sold, and a seller must entice buyers with Free Shipping and/or NR... Talk about the meat grinder....
[ link to this | view in chronology ]
Vik, 21 Aug 2006 @ 12:02pm

Re: Re: A middleman...
Well...if you sell on craiglist, and get into a fraud...who can you complain to?

At least you have some peace of mind when dealing with unknown peole on the net...who can be a fraud too
[ link to this | view in chronology ]
- C Long, 16 Sep 2006 @ 10:00am
  
  Re: Re: Re: A middleman...
  I've been ripped off 4 times on eBay over 6 years. I have never had resolution, a refund, or anything remotely close to customer service performed by eBay customer support. I had to file with BBB, FTC, and Attorney General offices of the seller's states. eBay did.....NADA. You are being charged and insured for NOTHING.
  [ link to this | view in chronology ]
- Dave Jay, 21 Jan 2008 @ 7:25am
  
  Fraud on ebay
  We detect about 10 Frauds a day on ebay & deal with them ourselves.
  Ebay doesn't give a Damn about Scammers.
  If any of you guys are intersted in joining
  our ebay fraudbusting team please contact
  Dave on exposed.fraud.on.ebay@gmail.com
  All new members welcome free..............
  [ link to this | view in chronology ]
Nick (profile), 21 Aug 2006 @ 2:39pm

can ebay survive as a public company?
Really, it is the ebay sellers who are the shareholders. What would happne if the sellers came together and bought a majority of the stock and formed some type of union?
[ link to this | view in chronology ]
- Anonymous Coward, 21 Aug 2006 @ 4:48pm
  
  Re: can ebay survive as a public company?
  Conflict of interests.
  
  A customer should never own a piece of the company it is buying services from.
  
  (Although I will concede that this seems to work very well for the credit unions...)
  [ link to this | view in chronology ]
Tony Fernandez, 24 Aug 2006 @ 6:25pm

Serious Fraud on ebay
I have some Vital Information about regular on-going Serious Frauds on ebay.
Please contact me a.s.a.p.
Thanks
Tony
[ link to this | view in chronology ]
Arch, 31 Aug 2006 @ 1:57pm

eBay pricing themselves out of the game
We, like many other high volume sellers, are now finding it much less expensive and more profitable to sell items via our own websites.

Many of us have experienced gradual errosion of sales on eBay, as listing fees grow and sales lag. We have 9 years of historical data to reinforce this point...

It's our belief that eBay is approaching a saturation point and that they will not have the ability, in the future, to continue with aggressive fee increases. They are simply becoming too expensive and cumbersome to continue selling on their site.

The addition of many fruitless sales tools is also getting comical and aggrevating. Why should eBay nickel and dime sellers for sales tools, templates, bold highlighting, etc. when they should be provided free of charge? Our merchant platforms on our own website improve tools regularly and do not charge extra fees for these improvements...eBay provides themselves with the self appointed right to charge their sellers for every single minimal tool they wish to provide us and ignore the fact that these fees errode sellers margins and profiability.

eBay now has competition and its in the form of individual websites. They know this, as this is the reason behind aquiring ProStores earlier in the year. They are aware of the struggles they are facing and will hopefully take steps to help their sellers, in turn, helping themselves in the long run.

If you need a pair of nice sunglasses, feel free to drop by our website and buy them from us direct. You'll save us $6.00 in fees and we'll get to have a real transaction together where names and email addresses can be exchanged without unfair obstruction. The days of being a third party, with a wall of separation, are gradually starting to fade. We're not alone in this sediment, as it is echoing accross the internet as we speak.
[ link to this | view in chronology ]
Louis Lindner, 27 Sep 2006 @ 12:15pm

Who actually owns blujay.com?
Who actually owns blujay.com the free ebay wannabe website?
[ link to this | view in chronology ]
J Martin, 3 Oct 2006 @ 11:23am

Ebay deserves to be in a slump!
I, too, am an ex-Ebay customer (primarily a buyer, but an occasional seller). After several fraudulent deals over the past two years, one of which involved an expensive camera, I am disappointed in Ebay and its lack of response to these problems.

There are two "classes" on Ebay--the Super Sellers and Stores are the Upper class, and the rest of us are the second. Even though we provide the necessary market, we are definitely treated as second-class citizens by Ebay. For me, the final straw was when a Super Seller didn't want to honor a sale to me, for which I had already paid, and told Ebay that we had mutually agreed to cancel the transaction. I answered "Not ture", and Ebay allowed the transaction to be cancelled anyway. I posted a complaint on an Ebay Forum, and I got a reprimand from Ebay, saying that posting a negative comment was inappropriate! Hello, Ebay Management, are you listening?
[ link to this | view in chronology ]
- R Edwards, 9 Nov 2006 @ 5:58am
  
  Re: Ebay deserves to be in a slump!
  Why dont sellers try Gumtree to sell things. Their site is easy to use no charges no lengthy registrations. I think if more people knew about the site Ebay would finally flop like it deserves to. Its got too many rules and regulations in an effort to make it look strictly legit but as too many sellers and buyers know to their cost if you make a complaint you rarely get it resolved to your satisfaction. So I now sell on Gumtree which I think is the best site around at the moment.
  [ link to this | view in chronology ]