Thursday, May 22, 2008

eBay: Heroin Buyers and Crack Addicts

Earlier this month eBay Australia regional VP Simon Smith called sellers attending a public meeting the moral equivalent of drug addicts. Australian journalist Angus Kidman was there and this is what he wrote. You can read the whole article here.

"We're not allowing people to offer unsafe choices, just like in this democracy you can't go out and buy heroin on the streets." Telling customers who care enough about your company to attend a public meeting about its future that their rejection of a payment system makes them the moral equivalent of drug addicts is not likely to endear you to them, we'd have thought, but then we are but lowly journalists -- not masters of the online auctioneering universe.

Don't they teach these junior executives to think before they open their mouths? I wonder what sort of impression that statement made on the powers-that-be at the ACCC who are considering eBay's application for a waiver from compliance with Australia's strict 'exclusive dealings' laws? Exclusive dealing involves one trader imposing restrictions on another trader's freedom to choose with whom, in what or where they deal. Exclusive dealing is prohibited under the Trade Practices Act of 1974

A key objective of the Act is to prevent anti-competitive arrangements or conduct, thereby encouraging competition and efficiency in business resulting in a greater choice for consumers in price, quality and service.In certain circumstances,
for example, the Act prohibits a common form of exclusive dealing known as third line forcing. Third line forcing is the supply of goods or services on condition that the purchaser also acquires goods or services from a third party.

Today blogger Randy Smythe, one time top eBay PowerSeller ID GlacierBayDVD, wrote a sensitive piece comparing eBay sellers including himself to crack addicts. I urge you to read his post on My Blog Utopia! and leave a comment with your thoughts.

Was I going to try and restructure my business, for the 2nd time in as many years; after all it was still generating nearly $350K a month in cash (no profit mind you). Or, would I quit cold turkey and deal with the inevitable crash and burn when the crack (cashflow) stopped... ...
I made my decision in Dec of 2005 and though it was the most painful decision I've ever made in my life, it was the best decision I ever made.

Has the Cash Cow Moved on to Better Things?

Back in 2005 eBay auctions had sell through rates of 45 to 50% and yet writing about that time today Randy said "no profit mind you". 2008 auction sell through rates are flat hovering around 40% and I can't help wondering how many mega sellers will vanish this year because they are not making any profit. Making money yes, profit no. Elsewhere in today's news Phil Leahy, Platinum PowerSeller and head of PESA Australia under the user ID philsales1 has been suspended for non-payment of fees. Read all about it at Auctionbytes

eBay is making profits and it seems pretty obvious that as seller numbers decrease eBay fees must rise, after all there are some pretty hefty executive compensation packages to fund.

Tomorrow we are going to discuss Best Practices, Customer Service and Ethics with examples, names named.

Y'all come back and be sure to click VICTORIOUSLY on any interesting links in the sidebar!

1 comment:

Anonymous said...


I think I see a sinking ship and it's name is HMS eBay. I truly cannot wait for Wigix to open!

Anony Mouse