Ebay Quickly Reaching the Same Level as Amazon!

Jul.11, 2009 in Marketing

eBay, the online clearinghouse we have all come to build sites around is suffering a great identity crisis and according to stats compiled by Nielsen, traffic at the auction site if off by more than 30% year over year!

AuctionBytes reported this morning on all metrics that are relevant to both eBay and Amazon, and even though eBay is quickly working to bring itself even with Amazon, its the wrong direction!

Its Not Just the Economy!

I know someone will come out and say… But… but… the economy is in the crapper, of course they are going to be down! Unfortunately, if it were only the economy, you would see the same trends along all major ecommerce type websites. Looking at the graph above, you can clearly see that Amazon is holding its own quite well.

What is Going Wrong with eBay?

I will preface this by saying that maybe, just maybe, eBay expected the traffic to go down when they abandoned the auction format last year for the ecommerce platform they are trying to transition into. Highly doubtful though…

So what else might be wrong with eBays marketplace?

1 – They have abandoned the people who built ebay!

eBay was once the place “to go” when you wanted to find anything rare or for a bargain basement price on the web! Honestly, why do people even care to go to eBay anymore when they can find the same items at Amazon or any other large ecommerce site?! If you go through the ebay marketplace today… you find the same items listed repeatedly, all for just pennies of a difference.

When they decided to abandon the “Cash in the Trash” people, like even myself and Kim, they lost not only their user base, but also a certain number of buyers who now go elsewhere.

2 – They are Alienating their Affiliates!

On one hand, they are focused on bringing and keeping top level affiliates to the ePN program. Along with that comes a fair percentage of webmasters like any of us, who are scuttled to the side. eBay used to have one of the most popular affiliate programs on the web… just visit the forums today and you can read how alot of them have abandoned the platform for other methods to monetize their traffic.

On one of my own higher traffic sites (+5000 daily pageviews), I watched the peaks and valleys in the reporting from ePN… 2000 clicks one day, 200 the next day, 2300 again the following day… and heard the “pinks” say that everything was fine on their end. Transparency is everything in affiliate marketing and when you see the reported stats constantly fluctuate, yet your traffic stays constant, doubts are raised. In my case – I pulled the ebay listings all together and went 100% with Adsense for my traffic on that particular site.

3 – Long Time Sellers have Thier Own Buyer Lists Now

I can tell you from someone who ran a successful eBay business for several years (+$150k/mo in sales) – we kept every single buyer name and address who bought from us, and marketed to those buyers every time we had a special! In our business, there was alot of phone contact with the buyers… eventually, they called us direct instead of going through the eBay system.

My guess is that we werent alone in doing this and since eBay has moved to an ecommerce shopping place, versus mom & pop selling you a lamp from their garage, the trend of direct selling will only grow more prevalent.

4 – Competition in the Marketplace!

As eBay has gone to ecommerce… more and more auction sites are springing up every month! Lets not even mention Craigslist, (who eBay partially owns) and the fact that there are more options today, than there has ever been in the person to person market.

5 – Paypal or Nothing!

One of the last changes eBay made to its seller policies… requiring EVERY transaction to go through Paypal, was VERY unpopular! As we all know, eBay owns Paypal and they used the ruse of stopping fraud as the main reason for the change…

Many people, myself included, prefer to use different methods of payment than paypal! When we had our eBay store for instance, we got a full percentage point better rate than Paypal card transactions, from our local bank. 1% on 150k adds up quick when you run on tight net profit like we did!