How Do You Beat EBay in the Auction Business? One Category at a Time!
Will EBay Die by a Thousand Cuts Rather Than One Fatal One?
The light just went on in my head! (Wow, there's a lot of empty space up here.) What would happen if a significant competitor rose up in each of eBay's categories? I was previously of the belief that eBay's auction business was safe from any major competition. After all Amazon, Yahoo, Overstock, and a host of others have tried to take on eBay's auction business and failed to do so. What could be different this time? Perhaps the problem is that Amazon and the others went after the whole eBay pie rather than finding a niche and taking a slice at a time. As my friend Graham says, eBay will die by a thousand cuts rather than one fatal one. (I'm paraphrasing.) I've been looking at this all wrong. Numerous niche auction competitors could seriously affect eBay's growth by cutting their Auction upside. Niche players don't need to be number #1 in their category, just a strong #2 to start affecting eBay's auction growth, and with angry eBay sellers looking for alternatives right now the pump is primed.
What would happen if eBay actually had one major competitior in each of their 27 categories? Today the closest competitor to eBay's US CORE business has just over 1 million listings while eBay has over 13 million. I wouldn't say that is a significant competitor, but when you look at eBay's UK Mobile Phone Business you will see that they only have 186,039 CORE items. Couldn't mymobileauction.com put a dent in that number? Now, do this in 27 different categories and eBay has some problems in their CORE business.
Would it really take a thousand cuts to affect eBay's CORE business, or would 27 strategic wounds do the trick?
Published by Randy Smythe
I write about ecommerce, ideas, Single Parenthood, and Squidoo View profile
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6 Comments
Post a Commentright on, what do you think about online penny auction sites http://www.bidstick.com ?
you are apsolutely correct. what is you opinion on reverse auctions like http://www.oltiby.com ?
The same is true in the UK, one site in particular, Tazbar.com, is picking up a lot of former ebay sellers (and buyers). It has passed 55000 listings despite being open for less than 3 months, tazbar is now advertising on UK TV and is taking off in a really big way. This only goes to show that ebay have got it wrong, yet again misjudging the marketplace and buyer preferences.
Shareholders need to wake up to what the (former) users already know.
Hi Everyone, I've expanded on this article at my blog. http://rksmythe.blogspot.com Check it out when you get a chance.
The real reason eBay Sellers are so upset.
That is without a doubt the most concise, insightful, astute, and lucid description of the current state of eBay!
What people keep overlooking, is that the fee hikes are just "the tip of iceberg" "the last straw" actually the least of the many reasons sellers (and buyers and apparently stockholders, for that matter) are depressed discouraged and angry about what happening with eBay.
The real reason price increases were met with such outrage (especially this latest increase for stores and the equally controversial fee increases back in 2005) is that we are being asked to pay ever increasing prices for ever decreasing quality.
For one thing, over the past 2-3 years we have all had to try to adjust and re-adjust our business plans to constant, unnecessary and often counterproductive change for the sake of change, which has made the site increasingly confusing, counter-intuitive and non-user friendly. Some of it simply makes no s
eBay does have rising competition in some places. In Australia, for example, they've been in a very obvious traffic decline since early this year, and there is absolutely no sign that the trend will be changing any time soon. On the other hand, an Australian-owned competitor has had a tremendous increase in traffic and has more than doubled their membership in the past couple of months and has been using the increased sales and income for advertising, plus many of the new members (ex-eBay sellers, including many PowerSellers) have been enthusiastically recruiting, spreading the word, etc. If the current trends continue, eBay will have completely lost their grip on the Australian market in six months to a year. I don't think it will mean "the end" of eBay, but Austrlia has had strong competition for eBay in the past (sold.com.au to be specific; Yahoo bought them, ran the site into the ground, and sold the domain to eBay, but for a long time, eBay and Sold were matched listing for li