Auctions on eBay: A Dying Breed

Businessweek has published an article "Auctions on eBay: A Dying Breed"

The thought that the former internet auction powerhouse may have to tweak it's approach is intriguing. Apparently, eBay buyers are short attention spanned when it comes to the longevity of enjoyment of the thrill of the hunt. That is, once you've outbid the competition and received the high, bid winners are ready to move on to their next purchase high.

Currently, EBay's "Buy It Now" business, where shoppers can purchase items at a set price even when the merchandise is also listed in an auction, makes up 42% of all goods sold on eBay. It's growing at an annual 22% pace, the fastest among eBay's shopping businesses.

Ebay has a new CEO who is spearheading changes to make eBay more friendly to users who favor one-click shopping. The former CEO Meg Whitman ended was successful with the ad campaign that championed auctions, urging consumers to "Shop Victoriously . In May, eBay announced a partnership with Buy.com to sell a large swath of the retailer's inventory for set prices.



But as eBay has recently appeared to be focusing with the plight of buyers, sellers have been outraged by changes in pricing structures.EBay sellers organized a weeklong sales boycott in protesting the changes . EBay's site has nearly 90 million active users. Other auction sites such as Ubid.com (ubhi.ob.OB) have far fewer visitors. Ten-year-old Ubid had 181,000 active bidders in the first quarter, according to its quarterly report.

Newsweek Asks...Can you really make a living on eBay?

Can 1.3 million people really make enough money to earn a living on the site?


Can more than 650,000 Americans really "make a living" on eBay?

According to a 2006 study conducted by ACNielsen (on behalf of eBay) concluded that "approximately 1.3 million sellers around the world use eBay as their primary or secondary source of income," with an esti­mated 630,239 in the United States.

EBay continues to attract people who would like to make a portion of their living selling. "We think there are about 600,000 sellers that use selling tools on eBay who are trying to make a buck," says J.P. O'Brien, chief executive of­ficer of Sagefire, a Boulder, Colo., com­pany that makes software programs that automatically download data on bought and sold items.

According to Neilsen, among Internet users, the highest percentage shopping online is found in South Korea, where 99 percent of those with Internet access have used it to shop, followed by the UK (97%), Germany (97%), Japan (97%) with the U.S. eighth, at 94 percent. Additionally, in South Korea, 79 percent of these Internet users have shopped in the past month, followed by the UK (76%) and Switzerland (67%) with the U.S. at 57 percent.

Globally, the most popular and purchased items over the Internet are Books (41% purchased in the past three months), Clothing/Accessories/Shoes (36%), Videos / DVDs / Games (24%), Airline Tickets (24%) and Electronic Equipment (23%). Of this, eBay scored the highest internet sales reaching some 124,132,042 people or 36.1% of total internet sales.

Who is making the majority of the money on eBay?
Ebay doesn't specifically say what percentage of theire sellers are 'earning a living on eBay'. However, the ones doing 'okay' are the Powersellers. To qualify and remain in the PowerSeller program, members must:


* Meet the following average minimum sales requirements:
o Three Month Requirement: a minimum of $1,000 in sales or 100 items per month, for three consecutive months
o Annual Requirement: a minimum of $12,000 or 1,200 items for the prior twelve months
* Achieve the following minimum average of items sold:
o Three Month Requirement: 2 items sold per month for the past 3 months (6 items)
o Annual Requirement: 2 items sold per month for the past 12 months (24 items)
* Achieve an overall Feedback rating of 100, of which 98% or more is positive
* Have been an active member for 90 days
* Have an account in good financial standing

Ebay has recently updated their rules making it harder to reach this level if seller feedback isn't the best. They have recently removed the ability for sellers to leave negative feedback as well. A move that has outraged many sellers and really makes little sense.

What is going on at eBay?

The controversial new feedback policy from eBay removes sellers' ability to leave neutral or negative feedback for their buyers.

EBay hopes the change will benefit both buyers and sellers by creating a more reliable marketplace, some small merchants see this as another reason to move their wares elsewhere.

Sellers are taking more drastic action: A number have posted store notices saying they will no longer leave any feedback at all in protest of eBay's new policy.

EBay officials say the feedback change was necessary to counter a growing trend of sellers leaving retaliatory ratings for buyers who give them negative ratings. Wouldn't you?

"What we discovered through research was that any negative feedback that the buyer gets reduces their purchasing or willingness to purchase within the marketplace," said Brian Burke, eBay's director of global feedback policy. "The goal behind the changes is really to make sure that we've got buyer accountability and seller accountability."

To make up for limiting public feedback options for sellers, eBay is giving its sellers more tools to protect themselves against unscrupulous buyers. Starting May 27, vendors will be able to tighten buyer restrictions and block shoppers who have been reported for policy violations, such as feedback extortion or nonpayment, from buying or bidding on their items.


EBay's feedback change is part of a comprehensive revamp that has also brought changes to eBay's fee structure, search algorithm, and PayPal policies. Small merchants have been particularly vocal in their displeasure about the changes.

"I think we're in a very hostile seller situation," one merchant said. "I have no clue why eBay is doing it, but it scares me."

There is a seller's budding backlash, punctuated by eBay-bashing Web sites and online message groups. According to USA Today, Smaller auction sites Bidville, ePier.com and iOffer.com, among others, report an increase in new users. Wagglepop.com says 2,700 sellers, most of them eBay defectors, have lined up to join when it starts later this month. "We struck a nerve at the right time," says CEO Ray Romeo, a former eBay user.

About 430,000 individuals and small businesses make part or all of their income from listings on eBay — nearly three times the number in late 2002.

The eBay Security Center- Tips to Avoid Identity Theft

1. Monitor your accounts.
With a close eye on your account, you can spot suspicious activity and take steps to notify officials. The accounts that you hold with your bank, phone company, and e.commerce providers should be monitored regularly. You should also order a credit report every year to ensure that it is accurate.





2. Verify emails that ask for personal information in My Messages.
Any email from eBay about your account or requesting personal information will be copied to My Messages. So, if you get an email about your account or requesting personal information, check to see if it is in My Messages. If it's not in My Messages, you know it is fake and you should immediately forward it to spoof@ebay.com.




3. Use strong and unique passwords.
Good passwords have two things in common. First, they include a combination of letters and numbers. This helps prevent someone from guessing your password and prevents an intruding computer from randomly going through words in the dictionary until it finds the right match.

Second, a strong password will be unique to the account. Just as you wouldn't use the same key for your car, your office and your house, unique passwords are an important preventative step in the event someone gets hold of one of your passwords.



4. What You Should Do if You've Become an Identity Theft Victim

Restoring your accounts and credit reports if you become a victim of identity theft can be an extremely frustrating and time-consuming experience. If you think you are a victim of identity theft you should contact a number of organizations that have an impact on credit ratings and security. The Federal Trade Commi