Are EBay and Store Sellers Headed for Divorce?

Ever since the fee increase announcement of July 19th 2006, Ebay Store Sellers have had little good to say about their “Landlord,” though they have had some fun at eBay’s expense. I generally don’t like the Landlord comparison in regards to eBay stores because I look at eBay fees as sales & marketing dollars – Listings fees being advertising and FVF (Final Value Fees) being Sales commission which are far different on the old P&L then rent, but I do think the relationship will help explain my point so I will run with it.

Sellers are basically on a month-to-month lease with eBay and as long as they can still make money, most will continue to sell even though they are unhappy. But for a great many of them there is certainly no long-term plan for staying on eBay. (This should be troubling to eBay and their investors) Most are in the wait and see mode waiting for the other shoe to drop. (I have a ton more clich�©s where those came from). And a great many have made their first store reductions on the hope that sales will improve rather than decline. So from a business standpoint eBay sellers are preparing to make the hard choices, and eBay, in my view, has very little time to keep them. Most will stick it out through the holidays, but all bets are off for the 1st Quarter of 07.

Because Store Sellers do not have a long-term lease they are busy looking at other options. Amazon just announced WebStores, which might be an option. Yahoo has Stores and there are numerous other options presenting themselves. Anyone who would allow eBay Store Sellers to upload their inventory in a similar fashion could take the lead. (ProStores is less of an option for emotional reasons). Sellers are just flirting with these other services right now, but how long will it be before they have an affair or leave eBay all together.

So, now you see where I got the title regarding divorce. Unlike most businesses there is an emotional element that is unique to eBay. For so many years eBay was considered a community. Sure it was still a business, but both buyers and sellers alike enjoyed the experience. We had buyers searching for hard to find treasures and sellers working hard to meet their needs. Meg Whitman recently said: “The marketplace has been overwhelmed with identical, poorly-priced items that have diluted the magic of the eBay experience.” I contend that eBay management is more to blame than those store items.

I’ve been spending a great deal of time lurking on the message boards, and it appears to me that the issues have moved from business to personal. Many sellers have just moved on, but my guess is if you surveyed those sellers about their faith in eBay as a venue, it would be somewhere south of President Bush’s approval rating.

What I’ve noticed recently is that the problems are mounting, and I’m speaking mostly for Store Sellers, for eBay has raised their fees, reduced visibility of their listings, fumbled through the excessive shipping problems, launched “feel good” community apps like Guides, Blogs, Wiki’s, and their latest diversions, MyWorld and eBay MatchUps. They have tested sponsored links in search results (a subject for my next post), and I could go on and on, but then I wouldn’t have anything to write tomorrow. They have made all of these changes and apparently mishandled all of these problems with barely a peep from Management on what their plans are.

The Stores Message Board BBL (Brown Bag Lunch) for September was sparsely attended because the sellers don’t believe they will get real answers. Spin rules the day! The communication between eBay and Store Sellers is virtually non-existent, and this portends (you like that word, don’t you?) big problems for the future. The Store Owner is the neglected spouse, and eBay is the uncaring, insensitive spouse. Just as a spouse who feels neglected or feels un-loved-sounds kind of sappy but bear with me-might start looking to someone else to fill those needs, eBay Sellers feel the same way. It is getting to the point that Sellers don’t even care what eBay has to say. They have already written the company off. It appears some counseling is needed. All right, I’ll stop the marriage analogy.

The bottom line, in my view, is that eBay needs to communicate their vision for the future to their Sellers to give them the knowledge to make the appropriate decisions. And they need to actually listen to their concerns. If they can find a way to bridge this divide, eBay will be a better place for buyers, sellers, employees and investors. Otherwise, sellers will continue to speculate and question eBay’s plans and motives.

In a perfect world there could be an old eBay feel to the new improved eBay experience, but I don’t honestly believe it will happen. Though I am hopeful I am also realistic, and my next two posts will deal with why sellers can’t wait until eBay has figured this out.

Cheers!