eBay: Lookin for Love in all the Wrong Places

By Noah Graff

eBay has lost its love in the merchant community, and it is looking to find it in all the wrong places.

Much of the attraction to eBay is the auction mode where there is an opportunity for both the buyer and the seller to make a score. The auctions built eBay, but they are losing their appeal. Professional sellers fear the randomness of an auction for an unusual item at one given point in time. For a machinery dealer like Graff-Pinkert & Co., the sister to Today’s Machining World magazine, selling without a reserve or high starting price seems foolhardy on its face, but it appears to be the only way that we can get action on the site. The eBay store is advertising, but we hardly ever sell anything off of the store. Graff-Pinkert attempts to jumpstart auctions with email and fax announcements because we do not trust eBay to generate the traffic we need on our machinery and tooling items.

Our buyers usually come from people on our lists, but new people do keep popping up who we’ve never heard of before. I feel our auctions would be more affective if other sellers in the field trusted the auction model. This would bring more interested buyers to the site. eBay’s management knows that the auctions are the heart of eBay, but the stores are the Golden Goose. Management is happy to take the big store advertising dollars, but the energy comes from the auctions, which are becoming stale.

eBay is raising the store fees to try to move the sellers to auctions, but the result may just be more merchant irritation.

Wall Street prefers the store advertising approach because it appears more predictable, but it will eventually sap the soul of eBay, which is the auction action.

An area where eBay has also failed the merchants and buyers is in its security. The auction site is brutally hacked. Every bidder on a large ticket item who is unsuccessful receives clever “second chance” come-ons, which are totally bogus frauds. eBay’s purchase of Skype, the voice-over-internet protocol software, sent a message to me that Meg Whitman and the eBay board had lost faith in the basic eBay business and were desperate to invest in the “next big thing” while they still had a highly valued stock currency.

Personally, I think the money would have been better spent on securing the site and promoting the original auction concept.

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