Death of EBay Auctions?

Looking at this report you could be forgiven for thinking John Donahoe had announced the closure of eBay as an auction venue recently. If he did then I missed it in among the fee hikes dressed as cuts, harsh financial controls placed on sellers dressed up as safety meansures and traps to minimise discount qualification dressed up as volume seller incentives.

Mr Donahoe certainly made it clear to me that he sees eBay preferring to have General Motors and powersellers importing an entire chinese factory's output each week as his future customers than Mom, Pop, me or Mr Stamp Collector.

The past week has seen some interesting traffic patterns which underline the massive uncertainty eBay users now face. At Pheebay we've found any news report containing 'eBay' in the title is likely to receive ten times as many hits as any other keyword. Then add the word 'strike' and you can triple the daily hit statistics again.

Tazbar have reported increased new user registrations. eBid have pointed to a doubling of site visitors and I've noticed a lot of rehashed eBay good news stories making it in to Google news again, even if they story reported is years old. Strange that.

I've been reading a variety of blogs and articles which - depending on the interests of the author - are either lamely pretending this is all good news for eBay users or, more often, wishing events on eBay and john Donahoe that would be unthinkable even in the most bizarre S&M establishments. There's also been the predictable flurry of anti-eBay videos appearing on YouTube.

I'm impressed by the amount of internet coverage the planned eBay strike has achieved in just a few days and, if this is any measure to go by, the 2008 stoppage looks to be a lot more threatening than the last episode of fee hike induced outrage in 2006.

So where are we going with eBay now? The one thing that has been noticeable is just how little official comment there's been from eBay itself. A few quotes have been attributed in some places dismissing the strike and seller complaints. There's also been suggestions that eBay think this is all 'noise' which will quickly quieten down. It's also been reported that John Donahoe has been referring to his site as a 'flea market' and generally offering less than pleasent crticisms of the marketplace built up by his predecessor, outgoing CEO Meg Whitman. Perhaps not quite on a Gerald Ratner scale, but rubbishing your own website is hardly a good move if true.

The mainstream media has tended to focus on either the fee changes or the introduction of one-way feedback. Little mention seems to be made of the fact buyers who will be immune to negative feedback now are likely to hinder many sellers ability to qualify for the volume discounts being introduced. The mainstream media also hasn't yet made much of the plans for Paypal to retain seller payments for up to 21 days pending a positive response from buyers. I can't see it being long before some well publicised seller outrage results from this initiative.

Overall, while I would say reports of eBay's death are somewhat premature, I do foresee a huge shift starting to take place now. Many sellers will need to suffer a few invoices before getting the message no doubt, but I do think the market for traditional 'mom and pop' auctions is now wide open again.

EBay all but killed it's early internet rivals like QXL in the UK but for the current competitors there is certainly going to be a window of opportunity. The most fertile ground in my view will be those sites looking to compete in particular niches or categories previously dominated by eBay's smaller sellers. Collectables come to mind and sites like Delcampe and SpecialistAuctions should do well.

It's been very easy to rubbish eBay's competitors without a glance up until now because of the lower listing counts and buyer activity. But it looks to me as if the share of sellers earnings that eBay now demand has reached a point that many will find simply unviable. Will they simply stop selling and revert to socialising and video sharing or will they look to find a new venue and, in the company of other expat eBayers, help build new vibrant marketplaces for us to enjoy?

I really do hope the time has come where buyers will realise their collective kingmaker status and get a few of the alternatives buzzing. Competition will be good for eBay's remaining users and, for me, the internet would be a better place when people start to make more use of independent searches when they want to buy rather than allowing eBay to manipulate the results they are allowed to see.