eBay Strategies

eBay.DE puts S+H limits in certain categories - I scratch my head.

I haven't seen this blogged anywhere else (maybe because it's in German - A consipracy by eBay to keep it quiet? --kidding--).

The post is here for you German speakers in the house.  For the rest of us, here's a summation/translation that was done by one of the talented multilingual folks at ChannelAdvisor:

----------------------------------
eBay Germany is starting a new policy. From June 15 a seller cannot list any items again with shipping costs higher than what eBay has determined to be a reasonable rate in certain categories.

eBay is starting this for 2 main reasons:

1. eBay asked buyers about shipping and for the categories to where this new policy applies, buyers said that shipping costs were unreasonable high.
2. eBay sellers get low rating for S&H DSR in those specific categories.

(You can look at the post to see the long list of categories and prices)

----------------------------------
As we've all learned in the eBay ecosystem, eBay has been testing things in AU/IT/DE/UK and then taking the ideas that are the winners and then spreading them to every country, so this is one to keep an eye on.

It does raise some interesting questions that I'm not sure eBay has thought through:

• CBT - What if I'm in the UK and listing on eBay.DE - is it fair that I have to charge the same S+H price as a native?  What about the US?
• Some of these are crazy.  For example, in the B+I category for wholesale lots, they are saying 8 euros is the max.  Ummm, ok. What if I have two PALLETS of computer monitors for sale and my true shipping cost is 70 euro?  Do I put 8 euro and increase the cost of my products by 62 euro?  Is this the best buyer experience?
• If you asked me as a buyer which shipping and handling is too high, I'd of course being a cheapskate tell you, well, all of them of course!  Sure I'd love free shipping on everything.
• What's eBay going to do when everyone lives by this rule and the S+H cost DSR is still too low?  Why even rate on S+H cost for these categories?  eBay has essentially set the price so shouldn't they be rated on it and not the seller?
• Which came first: The chicken or the egg? (just checking that you're paying attention)

One thing I do know, if this policy comes to the US on top of all the other stuff sellers are dealing with, it's not going to be too popular, in fact the word kerfuffle comes to mind.

Long time, no blog... (aka June is going to be busy!)

Phew, it's been a very busy couple of weeks here at ChannelAdvisor and my normal midnight-2am blog time has been occupied by a variety of other things and thus I haven't had much time to blog.  A lot of time has been spent on two upcoming shows that I wanted to alert readers that we'll be at in full force:

1. Internet Retailer - (IRCE for short is in Chicago this year June 9-12).  ChannelAdvisor has a huge booth at this event (booth 453 - it's the one in front of the entrance just left of center).  As ecommerce channels have grown in importance, IRCE has become a cornerstone tradeshow for us.  With 5-8k internet retailers under one roof what's not to love about this conference?  One interesting trend I'll be reporting on for you eBay-focused folks is that over the last 2-3 years we've seen more of the larger eBay sellers choosing to go to this event vs. eBay Live.  With eBay skipping Live in 2009, it gives IRCE a chance to really take over.  I'm speaking at IRCE at the June 9 "Advanced strategies for marketing your website" Workshop with the folks from Vitamin Shoppe about PPC advertising.  There's some great content our team came up with here so I'll make sure to put it on the blog or our sister site (our paid-search blog), www.searchmarketing.com.
2. eBay Live - is ALSO in Chicago the next week June 19-21.  ChannelAdvisor will be at booth 911 (Got an eBay emergency? come to booth 911!).  eBay Live is going to be very busy with Wall St. events, talks and panels.
   
   • For the Wall St. readers in the audience we are co-hosting three sell-side events (a breakfast lunch and dinner so all of your culinary needs can be met!) featuring a wide variety of our top sellers- shoot ashley@channeladvisor.com an email if you want more info.
   • 6/19 - 3pm - I have a talk on 12 tips to improve your DSRs (rm w375a)
   • 6/20 - 10:30am - Sitting on a panel on using CSP software and tools to improve efficiency (rm W180).  This one's fun because I get to talk about how often Blackthorne crashes all the time and what not. (that's for John).
   • 6/20 - 1pm - I'm hosting a panel entitled 'how to run your back-office for top sellers' (this is going to be strong as we have a rockstar panel) - (rm w375c)
   • 6/21 - noon book signing (I guess in the book store?)
   • 6/21 - 3pm - Is a repeat of the DSR talk for those that couldn't make the earlier one (rm W179a)

So preparing for all of this has taken a big time investment, but I think we're ready.  I'm definitely looking forward to meeting tons of customers, industry folks and blog readers.  See you in Chicago!

P.S. I have a couple of pent up blog items I'll try and get out today/this weekend.

eBay Gambles the Brand (literally!)

**Update - a reader actually pointed me to this press release that details more of the features and functionality of the new eBay slot machines.  You can watch a video here.

I'm out here in Las Vegas at the Goldman Sachs internet conference and stayed in one of the newer hotel casinos that has lots of the newer branded casino games.  Imagine my surprise when I walked around a corner and saw this familiar brand:

So eBay seems to have licensed their brand to a line of casino games.  It's really really cheesy.  This cluster of 10 machines is called a "community" (progressive pot or something) and then it's basically a slot machine and in each column you have eBay logo letters, categories and 'whimsical' items you may find on eBay like a boot, baseball or a car.

Since JD has been at the helm for such a short time, I have to believe this was done under the Meg regime and with her tight views of brand, I'm really shocked that eBay would license the brand to something like this.

Kind of ironic that gambling sites can't use PayPal, eh?

Goldman live blogging III

Q: Can you talk about China?
A: It was a big learning experience for us - we acquired Eachnet and then replatformed and that was not good.  We have partnered, they have built new platform (based on Korea), they've launched it and we'll continue to have same JV approach in China, Taiwan and in other small Asian countries like Thailand we will look at JVs.

(Swan) The best way to win long-term is to partner.  We retained the rights to the CBT.  That leverages our unique capabilities.  That is a second way we benefit from China.  Third we have a Chinese and Indian development centers where more and more of our product development is done.

(JD) We have made substantial growth in Chinese selling into other regions.

Q: Do you view your status in Latin America as strong?
A: Mercado Libre is our partner there. (points to CEO).  Very similar to our Chinese strategy, we are happy being a 20% owner and keeping a strong local team in place there.

Q: Paypal off-eBay, what are you doing?
A: The product sells itself.  We go to merchants and offer an online product, pay us lower fees and drive incremental sales.  We have documents from large merchants to small that proves this out (1-5% and sometimes more).  So merchants off-ebay are aggressively adopting PayPal as another payment system.  We bring 140m users to the sites.  We drive lower rates thanks to the mix.

(Swan) Scale really works in this business.  Sales team approaches by vertical.  If we can get the top player in a vertical we can add more.  For example we added SouthWest and now we have 6-7 airlines.

------------------------END---------------------

Goldman live blogging II

Q: In the Q1 call you talked about things slowing, give us an update
A: (swan) recapped what they said in Q1.  Then mentioned that CBT is a big area of growth that has offset domestic softness.

Q: Did they play a stronger role than in other Q's?
A: Yes, we were up 2% on CBT, expansion of PayPal playing a role.

Q: In terms of rising fuel cost have sellers complained about shipping costs?
A: Not really.  Rising fuel has more cost on demand, some shipping carriers, but that impacts all of e-commerce.  What we do see with eBay sellers is we are putting a much higher focus on their performance via DSRs - 2 of which are focused on shipping. Since we made this change there's no doubt the entrepreneurial nature of eBay sellers has kicked in and they are making a huge improvement across the site.

(questions from the audience)
Q: When you look at some of the formats other than eBay does that dillute or cannabilize core eBay?
A: We don't care - we connect buyers and sellers.  If that's a classified, we have Kijiji, that's great, if core eBay, great, if ad, great, etc.  What we're seeing is buyers try everything.  They'll go to eBay, check out a cell phone, then they go to shopping.com, maybe click on a text ad and then come back to eBay - with more confidence knowing they checked out the entire web.

Q: It's been a few years since the roll out of third party listers like isoldit (drop off stores) - what's the growth rate of third party listers vs. individuals.
A: I don't know. There are drop shops and there are trading assistants.  We don't break that out.  Consumers selling on eBay continues to be strong - eBay is the only place you can turn assets to cash in 14 days.

Q: assuming you get to a stage where you have a great search engine, what's the rational for having insertion fees at all?
A: Insertion fees have created quality at eBay - it motivates sellers to price well and put things on eBay they want to sell.  This gives eBay a fresh set of inventory every 7 days and that makes eBay unique.

We took a step recently to increase the FVF vs. listing fees, we'll do more - you'll see category pricing like media/technology.  Then if you look at Italy, insertion fees are quite low, very close to zero.

Auctions is still an important and unique part of eBay and insertion fees are a quality governor.

Q: What does fixed-price do to conversion ratios?
A: Good question and we talk about it internally.  We will continue a strong focus on high conversion inventory.  As we allow more and more larger sellers to bring more inventory on, then conversion rates will come down.  We're seeing that now, listings up, conversions down (but holding up better than we thought it would). We will monitor in an intelligent way.

Q: Do you discuss amazon as a competitor? Why are they doing so well.
A: E-commerce is only 5-7% of offline retail and we both see lots of room for growth. Let me comment less on Amazon and more on eBay.  Our competitive differentiation/focus in value and selection.  We're the place you find the lowest prices and largest selection and that's our buyer base.  We tend to be the value oriented shoppers and collectors which account for roughly half of the ecommerce buyer market.

Over the next year as we improve the buying experience, our value proposition will increase.

With sellers, there's nowhere else to get this volume.  What we haven't been great at is as sellers scale, scaling with them.  Lots of examples of small sellers not scaling with large sellers.  We are going to fix that.  Amble growth available for both us and Amazon.

Q: Can you talk about Stubhub?
A: Stubhub is a fabulous business.  A secondary ticket market.  No way better in the world to know you want to go somewhere and get it reliably and conveniently.  Of all the eBay portfolio co's, Stubhub has the best buyer experience.  Doing deal with Madonna and sports teams.

Q: You have no leverage on the balance sheet - any plans?
A: (Swan) Our philosophy has been to continue to do M+A as part of our growth story, acquisitions we did in last 3-4yrs is 40% of our revenue today.  We want flexibility to acquire our own shares when not valued correctly.  Few months ago we had $4b in cash on the balance sheet but it was all offshore.  We put a line of credit in place to give us flexibility without moving cash.

In last months we have bought $4.2b of stock - almost 10%.  If we take on debt it will be part of a consistent approach to do M+A and  buy stock.

Goldman live blogging I

Q: Talk about eBay's growth prospects
A: (JD) We are blessed to be in three very large markets.

Within ecommerce we have our core business, that has had decelerating growth we aren't happy with and we're focused on increasing/addressing.  Our goal is to grow as fast as ecommerce and think we can get back to that.

Also have non-gmv businesses: shopping.com, etc.

Online payments is a big opp, growth on eBay is big opp, only 50-60% penetrated

Lastly online communications -Skype grew at greater than 100% y/y. Focus for 2008 is reinvigorating ebay core growth.

Q: How do you see Skype integrating with paypal/ebay?
A: Skype is a great standalone business

Anyone have peer to peer video on skype (2 hands -one jeff jordan)

Bob Swan
-let's talk about margins, we talked about long-term margins in the 35% range, with Skype in the mid 20s.

Marketplace margins are at 40%, paypal is 50%, Skype is 11% margins.

Recently Paypal has gone down,

Q: In AU you are making Paypal required, can you discuss the response to that and are you doing it in other markets?
A: This was driven by our key 2008 focuses:
1. Make ebay easier to use
2. Make it safer

Paypal achieves the safety piece and they will give a blanket guarantee to buyers that they can't do elsewhere.

We'll take the learnings and applying them to other markets.  You'll probably ask if we'll require paypal only.  We don't have any plans to do that.

Q: Can you talk about improvements to search?
A: We are changing the search metaphor on eBay.  It was time ending soonest.  In a day and age when 40% of our GMV is fixed-price and we have the unique asset of closed-transaction data that can be used to make search better, we started collecting data and are moving towards  moving the search on eBay to BestMatch.  We factor in quality of seller, relevence and timing.  Italy was one of the first places we did this and we're doing some things to try a better fixed/auction hybrid model.

Q: What are you doing to accelerate eBay?
A: (JD) We are driving more changes than ever.  There are no silver bullets, we're testing in different geos, when we find things that work, we'll do more of them and less of the ones that don't.

Q: In Korea we've seen lots of couponing.  How do you feel about issuing them in the US?
A: The Korean market has been a great success study for us as we faced tough competition and had to make lots of changes.  Now we're at 35% y/y growth.  In the rest of eBay we have both fixed-price and auction.  We're focused more on customer loyalty.  With 84m active users, we think there is lots of growth in retention and share of wallet.  We are trying a variety of loyalty-based initiatives.  Couponing is one of them.  Jenn (Jennifer Watson), let's say you usually buy 6 times a year on eBay and we see you decrease activity we would send you a coupon saying - here's $20 come back.

Expanding more in Q2 - but a very small part of volume.

Swan: It's not a new cost, it's a better/redirected marketing spend for us. (contra revenue)

Live blogging from Goldman Sachs Internet conference

eBay's CEO, John Donahoe and CFO, Bob Swan are speaking at the 12:30 PT lunch at the event.  I'll be live blogging starting shortly.

eBayBucks: eBay moves from buyer coupons to rebate program

Phishing or buyer loyalty program?
Buyers are reporting what they first thought was a phishing scheme (note to ebay: you guys have to get better at this type of communication), but appears to be a real test for buyers.

Here's a sample of the text:

Earn eBay Bucks for your purchases*
-- then get 30 days to splurge!
Dear XXXXX, (NOTE: this would be USERID, but I blanked out to protect identity)
 
You're one of a select few invited to try out a new program we're testing to reward loyal eBay shoppers.
 
What do you have to do? Just sign up. It's fast, easy and absolutely free. We'll track your qualifying purchases* from May 15 to August 14 and rack up your eBay Bucks. Then you get 30 days to spend* them on eBay on something you love.
 
Hurry, participation in this test program is limited so sign up soon!
 
 
* Some restrictions apply, see terms & conditions for details.

Some of the emails offer a $3-5 spiff just for joining and some seem to have higher percentages cash back.  The note then points to this Terms page that points to : "www.rewards.ebay.com" which 404's, but rewards.ebay.com works and seems to be how you link your eBay account to the program.

I did the linking (even though I didn't get an invite) and was admitted into the program (note to sellers, why not send this information to your buyers as an FYI?). Note to buyers: sign up today before eBay realizes this program is wide open!

I was then presented with this offer of 4% back (that's almost half eBay's take rate!)

There are some exceptions I didn't capture in the screen shot:

What's excluded?
Qualifying purchases exclude: all eBay Motors categories except Parts & Accessories, Classifieds, Giving Works, LiveAuction, Business & Industrial Capital Equipment, Real Estate and all items listed in foreign currency.

How do I redeem eBay Bucks?
You may only redeem your eBay Bucks voucher using PayPal and eBay checkout on eBay.com or motors.eBay.com, not Express.
Your eBay Bucks voucher will be valid from Aug 22 - Sep 21.
The voucher is valid one time for a single transaction with a single seller. If your voucher value is not completely used up in that one transaction, the balance will be forfeited.

There's also a list to a FAQ here. With more content. My personal favorite is:

May anyone participate?
eBay Bucks is currently invitation-only while the program is tested and refined.

This funny because I was able to sign up with out any invite so this isn't being verified at all.

eBayBucks proves eBay's communication problems aren't fixed.

So here we have what looks like a pretty interesting program.  ChannelAdvisor is one of eBay's largest partners and I learned about it from a buyer emailing asking if it is phishing or not.

I guarantee eBay hasn't talked to any sellers about this as well.

I'm also willing to bet the redemption of this isn't thought out at all and probably won't work with third party checkout systems, I'm working to figure that out.

eBay rewards dashboard
Once you sign in, you are presented with a pretty nice dashboard that you see here:

I imagine it will keep track of purchases and anything under $1k will be a 2% reward and anything over will be 4%.

Who is Kondra Systems?
In the Ts+Cs a company, Kondra Systems, is mentioned.  I checked their site and they appear to be an embedded C virtual machine company so I don't get how they could possibly be involved here.  Any readers have any ideas here?

Bottom line
The bottom line is:

• If you buy on eBay sign up for this program and save money - do so before they close the bug that doesn't check to see if you have an invite.
• This could be a viable program if...
• eBay worked with their customers and partners to make it so.
• If eBay continues to work randomly in a vacuum with things like this program, these types of programs will continue to fail and eBay will continue to lose share in ecommerce as they constantly overlook and ignore their most valued assets (sellers and partners).

SeekingAlpha disclosure: I am long Google.

eBay Live 08/09/10 - changes are a coming!

eBay announced today there will not be an eBay Live in 2009 (skipping a year), but that they are going to be in Orlando in 2010.  I had speculated at ChannelAdvisor Catalyst this year that eBay might change the eBay Live format as it just doesn't seem to be the management team's style.  It will be interesting to see how they retool this event from 08-10.

As for Chicago in 2008, I'm speaking on several topics and would love to meet any blog readers that happen to be there:

• DSR best practices
• eBay back office panel
• eBay selling software+solutions

I don't think they've published the times yet so I don't want to go out on a limb there, but they are spread throughout the program.

Of course we'll have a booth and all that good stuff as well.