Wednesday, February 20, 2008

Boycott Puts EBay Future at Risk

Now is not the happiest of times for those inside and around eBay. Some of the top sellers on the auction site are boycotting eBay because the company has raised fees for listing goods for sale.

While eBay is free to make the change it feels necessary to gird its flagging revenue, the company is nothing without the millions who list goods for sale their. So far the boycott is having only limited effect, but even losing a small percentage of sellers to craigslist or other competitors could result in significant losses over time.

The online world is moving towards a pay per performance model, so eBay needs to get with the times by charging fees primarily based on when they sell.

According to a Forbes article "eBay's business model has been out of sync with the performance-based models popularized by the search economy," which dictates that users pay for performance, such as a lead to complete a sale."

EBay should include some nominal fee based on the number of goods listed, and get the bulk of its revenue from actual sales. With Meg Whitman stepping down, the new leadership needs to respond quickly.

Posted By John Gartner at 10:12 AM
Permanent Link: Boycott Puts EBay Future at Risk | Comments (1)

(1) Comments on Boycott Puts EBay Future at Risk

Why are the media all saying the boycott is having a limited effect? It just started Monday and will take a full 7 days to have its full impact. That impact will then continue for the following week as the lack of new listings this week carries through into next week.

The media keep quoting one source which claims it saw only a 3% drop on Monday, but that was the FIRST DAY.

I've been watching 8 categories since last Thursday. This evening, the listing numbers in those 8 categories have dropped 20-30% from last Thursday's numbers, and they are continuing to drop. Also, eBay appears to be still counting store listings even when they are on "vacation" (boycotting) and unavailable for viewing or purchase. I'm "vacationing" my 700 listings but there was no corresponding drop in store listings in my cateogory after I pulled my listings.

Also, listings are only half the boycott equation. Most sellers are also buyers, often heavy buyers. An eBay buying boycott is also underway. It will be nearly impossible to track that impact because of the potential for last minute sniping bids.

Please don't misrepresent the impacts of this boycott.

Comments by Rebecca Katers : Wednesday, February 20, 2008 at 10:09 PM

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