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eBay auctions are fun and represent a HUGE opportunity for profit.
Auctions are easy to do. There is no financial risk. And they generate great income -- you know, the enough-to- save-for-kids-college-education type of income.
Welcome! My name is Doug and I'll be your guide throughout this site. I've been selling and bidding on eBay & online auctions for a number of years now. When I started, there were no sites like this to help either beginners or experienced auction users. So I decided to create one. Since 1999, it has been my goal to provide sane, free eBay secrets and unique tools for eBay and other online auction sites. I sincerely hope you find it useful.
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AuctionInsights provides you the tips and tools you need to make eBay work for you!
What's New:
Aug
6
When David and I began AuctionBytes in 1999, the most common question people would ask us was, “How do I start selling on eBay?” Today, the most frequent question we receive is “How do I diversify?”
-Ina Steiner, AuctionBytes.com
As eBay becomes less and less of a marketplace in which small sellers can thrive, many merchants are left wondering what alternatives are out there. This article is the first of many that will examine eCrater.com for merchants looking for a different venue to sell their goods. This post provides an overview of the site while my future posts will discuss my experiences buying, setting up an account, setting up a store, creating a listing and selling.
eCrater was started in the Spring of 2004 by Ditimar Slavov as a marketplace of fixed priced products and hosting site for individual merchant stores. The site is free for buyers and sellers and, unlike most other free auction/market sites, does not feature advertising as a revenue model. eCrater depends on commissions from Google Checkout and fees paid by sellers for featured placement for monetization.
Emphasis on Sellers
I like the emphasis and attention eCrater places on the seller. According to their “About Us” page, the site “believes that a good foundation for a growing marketplace is a community of happy sellers.” This is a good sign for sellers disaffected by eBay corporate policy. Another positive indication is this quote found on the same page:
Cater to your sellers and buyers will come.
Friction Free Buying
There’s no registration required to purchase. This is a plus — keeping the buying process as friction-free as possible is important to a successful transaction. Prospective buyers simply add items to their shopping cart and checkout like virtually every other eCommerce site on the internet. While the site encourages Google Checkout, sellers can offer a myriad of other payment options, including PayPal.
Clean Website Design
I’m impressed with eCrater’s simple, clean website — it’s very reminiscent of Google. As I stated above, there are no ads to clutter up the page and lure prospective buyers from your listings. Dial up users will appreciate the speed in which the site loads over a analog connection.
Feedback System
The feedback system is simple and one-way. Buyers leave feedback for sellers — period. Recipricol and retalitory feedback is not a problem, because sellers don’t leave feedback for buyers. The buyer has the opportunity to leave feedback immediately if the purchase was made through an instant payment option and they are automatically sent a reminder three-weeks later if they have not taken the opportunity to evaluate the seller yet. Feedback is displayed as a simple percentage. For example, a seller’s feedback rating is 100.0 if they’ve received nothing but positive ratings and a seller that has received 3 positive and one negative feedbacks will display as 75.0. A detailed feedback page allows the visitor to read feedback comments and see the number of feedbacks received over the past year in a manner very similar to the classic eBay feedback page. There are no detailed seller ratings.
Listing Format
The listing format is fixed price only. The items are listed indefinitely (until sold) and the seller can offer multiple quantities. Every seller is provided a store with a short & simple URL. These stores include all of the merchant’s listings subdivided into categories defined by the seller. The owner can brand the store with their own logo and using the search function from inside the store will return only listings from that particular merchant’s store.
Restrictions and Terms of Service
There are significantly less restrictions than eBay users are accustomed to. In fact the site’s terms of service are only 899 words long! That’s less than some of the auction terms and conditions I’ve seen included by some sellers on eBay. The restrictions and terms are pretty straight forward. As of the time of this writing the site prohibits the listing of:
- Body parts & organs
- Pirated materials and products
- Copyrighted Materials (images & texts)
- Counterfeit Designer Items (replicas or imitation of designer products)
- Fake Documents
- Illegal Goods and Services
- Personal Information about another individual
- Prescription Drugs
- Prostitution
- Currency Exchanges
- The same or very similar content several times (even in different categories)
- Miscategorization
- Meaningless title & description
- Test items unless your store is put on-hold
- Free items and items with prices that are not “real”
- Items that are not for sale
- Pre-order items
- Firearms & ammunition
- Tobacco and cigars for smoking
- Live animals
- Mod chips or mod chips accessories
Community
eCrater boasts an active, friendly community. The lively bulletin board is reminisent of eBay’s in its early years.
Seller Tools
Besides the free store, eCrater offers an excel based bulk listing tool and offers free picture hosting. Each listing includes a gallery photo and the site boasts a shopping cart for visitors to your store. A widget and RSS feeds are available to promote your listings on your website, blog or Squidoo Lens. eCrater automatically submits a feed of active listings to Google Products Search (formally known as Froogle) and the listings support inclusion of Google Product Search attribute tags.
Simple Registration Process
I’ll document the registration process in a future post, but suffice to say that it’s quick, simple, and doesn’t require a credit card or any other financial data. While that’s a boon for sellers who desire a quick start and are concerned about the security of their personal financial information, it does expose the buyer to some risk. If it’s easy for honest merchants to establish an account and start selling, it’s equally easy for a fraudster to do the same.
Therefore it’s important for a seller to establish credibility and trust on their own website, blog, newsletter and/or forum community before they send potential customers to their listings on eCrater. Which leads me to my next topic:
Where Are the Buyers?
Here’s the rub. eCrater is not a natural destination for online consumers. The site wasn’t designed to be. It was designed to attract traffic from potential buyers directly to listings and stores from Google and through active traffic generation tactics on behalf of the seller. What I’m talking about is attracting free search engine traffic via the seller’s active blog or website, active participation (posting - not lurking) in forums relevant to your niche and including a link to your eCrater store in your signature file, Google AdWords campaigns, etc.
Success as a seller on eCrater requires work on your part to promote your listings — plain and simple. You need to attract buyers, establish a level of credibility and trust and send them to your listings. That’s the cost of free listings on a free store. But, for many sellers — this works! The chart below is a comparison of the traffic between three eBay alternatives from Alexa.com. The graph compares the Alexa rankings of eCrater.com, eBid.net, and UpperBid.com. The stats are from a live feed, but as of this writing, eCrater has a healthy amount of traffic relative to the other eBay alternatives.
eCrater is reminiscent of eBay in the early days — before it became wickedly corporate. I started this eCrator review primarily because I needed something to write about. Now I’m genuinely excited about participating in the site and sharing my experiences with you.
Look for part II of my eCrater review: Buying on eCrater.
Aug
4
As I discussed in my last post, eBay’s early success can be traced to the fact that the online auction was an early facilitator of the Long Tail economy. For decades, marketing efforts have concentrated on developing introducing products and services with mass-appeal due to the constraints of limited shelf-space and limited demand.
The internet provided merchants of niche products the opportunity to “aggregate demand [for these products] on a national or even global scale.”* eBay in particular was important to the development of the Long Tail economy because their online marketplace satisfied several important factors identified as key to the success of the Long Tail economy.
These factors are detailed in an MIT paper called, “From Niches to Riches: Anatomy of the Long Tail” and are divided into “Supply Side Drivers” and “Demand Side Drivers.”
Supply Side Drivers
As I noted above, traditional merchants were limited “by the same basic constraints: how many products can be provided in a limited amount of shelf space, and how many consumers in the local geographic area are willing to pay for these products.”* Brick-and-mortar businesses were confined to storefronts in expensive locations and could, therefore, only sell products that appealed to the mass-market. Niche items that had limited marketability to the consumers in their area were not a profitable use of their expensive shelf and warehouse space.
eBay helped change that. Merchants no longer needed to work out of high-rent storefronts in high-trafficked areas. Long Tail marketers could stock products of interest to niche communities in their garage or basement located in some remote part of the country. As long as they had a way to ship the products and access to the internet, niche sellers could use eBay market to a broad base of customers without the concern of the expense of a high-rent location.
Purveyors of Long Tail goods could count on eBay to promote their products to a global market. They were no longer constrained to the limitations imposed by traditional marketing venues such as print, radio and television advertising which would only reach limited audiences despite the significant expense involved.
Demand Side Drivers
eBay satisfied several key demand side drivers by providing consumers a centrals source and the mechanisms required to find the niches products that interest them. eBay accomplished this through organization and effective search tools. Before there was such thing as an effective search engine, eBay provided the central destination on the internet where consumers could browse for Long Tail products by category and sub-categories and/or conduct queries for specific items or features using their search feature.
There are several passive demand side drivers identified in the article which eBay has attempted (half-heartedly) to implement that are also important to Long Tail marketing. “Sampling tools, such as Amazon.com’s samples of book pages and CD tracks, allow consumers to learn more about products in which they might be interested.”* User reviews and recommendations also take some of the risk out of the equation for the Long Tail consumer. Additionally, “recommender” services such as NetFlix’s are an effective way of developing the niche marketplace based on the experiences of other consumers with similar tastes (eBay’s version needs some work! ). An eBay interested in developing into a mature Long Tail marketplace would certainly be well served expending some resources in developing and marketing these tools.
Where Does eBay Stand Now?
Alas, given the factors identified as significant to the success of the Long Tail marketplace, eBay seems content to implement policies and field technologies that move the auction site in the opposite direction.
Best Match is optimal for listings with mass-market appeal - not collectibles or niche items. This is in direct contradiction to the circumstances that made it popular and as the original niche marketplace to begin with - the effective organization and search.
eBay has tested the waters of user reviews and recommendations (so successful on Amazon), but has not devoted a significant amount of corporate effort into making these tools a significant feature on the site.
By implementing policies that are designed to encourage the listing and sale of products with mass-market appeal, eBay is implicitly discouraging the Long Tail market. The management has recently created a special category of Power Seller that provides special treatment for super sellers of mainstream products such as Buy.com. Additionally, eBay’s most recent promotion was aimed at increasing the number of fixed-priced listings - a selling format that is much more common in the mass-market product arena than the Long Tail market.
It’s ironic that as eBay implements changes to make it more like Amazon.com, Amazon is broadening their market to encompass more niches. Good thing for Amazon, especially since they have the tools to accomplish the task!
* Brynjolfsson, Erik, Hu, Yu Jeffrey and Smith, Michael D.,From Niches to Riches: Anatomy of the Long Tail. Sloan Management Review, Vol. 47, No. 4, pp. 67-71, Summer 2006
Available at SSRN: http://ssrn.com/abstract=918142
Jul
31
eBay: Long Tail Marketplace or Commodity Exchange? Part 1
Filed Under Industry News & Analysis | Leave a Comment
eBay is in a transition period. The auction sites early success was that of one of the world’s first “Long Tail” markets. eBay’s corporate vision seems to think that greener pastures lie in the realm of what is basically a commodities exchange marketplace.
What’s the difference?
A Long Tail market describes a niche strategy of business in which the market offers a large quantity of unique items in relatively small numbers. Chris Anderson coined the phrase, and published an influential book on the subject entitled, The Long Tail: Why the Future of Business is Selling Less of More.
This Long Tail concept in a nut shell is that there is money to be made in selling obscure goods to niche markets. The graph below provides a pictorial representation of the Long Tail concept. The vertical axis represents the popularity or mass market appeal for an item. The horizontal axis represents a particular product. For example’s sake, let’s call them DVD’s. The “Head,” the part of the graph that is shaded green, represents the popular, mainstream movies. This is where a significant portion of the market is concentrated - but not all of it.
Traditional markets typically are constrained to the Head (green area) because of physics:
- How many products can the merchant stock in a limited amount of space?
- How many customers in the local area are willing to pay for those products?
The niche strategy of business seeks to break these constraints by selling a large number of unique items.
The Long Tail
The yellow part of the graph represents the Long Tail. These are the movies that not everybody is interested in, but there are niches of people who would like to own or rent those particular titles. Your neighborhood Blockbuster is going to devote their limited shelf-space to the more popular titles in the green portion while, in aggregate, Netflix rents more videos from the Long Tail portion of the graph than the green portion.
The factors that keep most business models in the green section of the graph above deal with search, storage, and distribution. I’ll discuss these specific topics in greater detail in a future post, so let it suffice to say for now that the costs involved with marketing to small niches, storing the goods until they are sold, and distribution were so prohibitive for most entrepreneurs that most didn’t consider it a viable opportunity before the internet existed in its present form.
eBay’s early success has been in providing a marketplace for the Long Tail. The company provided a central location and a search mechanism for consumers interested Long Tail products to buy them, and a venue for Long Tail merchants to sell to this market.
The Consumer Commodity Exchange
Now eBay is heading away from their roots and focusing on becoming a venue for products that have a mass-market appeal. Even while more and more of the internet is becoming aware of the value of the Long Tail market (what Chris Anderson describes as “selling less of more”), eBay is focused on becoming what is essentially a consumers commodity exchange.
Economists define a commodity as something of value, of uniform quality, available in large quantities by different producers. Do a search for iPod or WebKinz on eBay and you’ll soon understand that these are basically a commodity.
The price of a commodity is universal and fluctuates based on supply and demand. There’s little profit for sellers of commodities unless they control some aspect of the supply or can successfully predict fluctuations in demand. Therefore, the sellers who will be able to compete successfully on the new eBay are not necessarily those who were able to compete successfully on the old eBay.
Why is eBay moving from the Long Tail market to the consumer commodities market?
- More consistency over who sells in their market and what’s selling. (Does this open them up to more piracy and counterfeit risk?)
- They think that’s what the consumer wants. (Didn’t Coke make the same mistake 25 years ago?)
- The think they will make more revenue. (After all, Amazon is growing.)
It’s worthwhile to remember that it’s the commodity brokers that make the most money in the commodites markets. They make a commission whether the market is going up or going down. The commodities traders (the new eBay sellers) are open to constant risk when they play the market - and are usually encouraged by the brokers.
Are you ready to play the market on the new eBay?
Jul
28
The phrase “old-fashioned internet auctions” seems like an oxymoron, but several pundits have declared traditional auction formats, if not dead, terminally ill.
According to the New York Times, the days of the traditional online auction format on eBay are numbered:
The golden era of the small seller on eBay, hawking gewgaws and knickknacks from the basement or garage, is coming to a noisy and ignominious end.
Consumers appear to be tiring of online auctions, and rivals like Amazon.com are attracting more shoppers with fixed-price listings, while eBay has been struggling for growth.
eBay seemed to confirm this sentiment a week later when they offered a promotion aimed squarely at encouraging the number of fixed-price listings on the “auction” site.
Maybe I’m just old-fashioned (seems like a strange term to associate with the internet) and stuck in the first part of this decade, but I still have a strong preference for buying and selling on eBay using the auction format.
Selling with the Auction Format is Still Fun
I’ll admit that I don’t sell on eBay full-time, so I my indulgence in the traditional auction format is a liberty that many full-time sellers can’t afford, but I still like my listings to have a absurdly low starting price with no-reserve.
Sure, some of my auctions will close for less than they should, but I’m still surprised by how often a listing will close for more than it should. That’s because there’s an emotional component to buying at the auction format that you just can’t duplicate when you are selling at a fixed price or on Amazon.
This keeps selling on eBay fun for me. And you don’t hear a whole lot of sellers talking about fun anymore. Maybe there’s a connection between the level of satisfaction and the listing format.
Buying on eBay is About Bargains
eBay is pushing the fixed price format because they want to be more like Amazon and “are concerned about the buying experience.” Message to eBay: I buy on eBay because I’m looking for a bargain. That’s the buying experience I’m looking for on eBay. The bargains are the lightly-used stuff that has been sitting in some person’s closet that they are listed in the traditional auction format.
Even when a listing has a buy-it-now price of only 5% more than the current auction-style bid price, I’ll take my chances placing a bid, thank you very much.
I’m looking for a bargain, and maybe hoping to have a little fun while I’m doing it. A lot of bloggers mocked eBay’s marketing slogan’s (Windorphins and Don’t just shop, win), but I think it really captured the true buying experience that I most enjoy on eBay.
Apparently I’m not the only person with a whimsical fondness for the glory days of eBay buying a selling. Here’s a few great comments from SlashDot’s post about the NYT’s article quoted above:
One feature alone would instantly pull me from eBay to whatever competitor there is: search and filter by “used item” vs. “new item” and also “individual seller” vs. “large retail outlet”.
When I go to online auctions, I’m looking for a deal on something used. I’m tired of living in a society where paying full priced new is the only option: it means individuals who’d be happy with a used widget have to spend more and our landfills fill up with still-useful widgets.
When I search eBay now for (tools/computers/whatever), I get 90% listings from large businesses selling new, usually crappy knock-off, items. I don’t want a cheap Chinese $20 wood router that barely functions. I want a used porter-cable router from some hobbyist who is downsizing his garage or upgrading to a newer tool. But the floods of cheap Chinese crap are all I can find on eBay!
I completely understand that businesses need to make money, and the buydotcom route may be one way to do that. However, eBay is WIDELY opening a door for another company to undercut them in the small seller market, and those of us who collect, buy, and sell anything used on a small scale and aren’t interested in just shopping online for new stuff that we can get down the street at Wal-mart or wherever.
How far eBay has strayed from it’s original purpose of being the “garage sale of the Internet” to now just essentially being an outlet mall. Perhaps it’s just an inevitable result of gaining too much popularity; regardless something tells me there’s money to be made in picking up the slack.
There’s your entrepreneurial idea for the day kids. I’m sure garagesale.com is already taken (and isn’t a Web 2.0 name anyway), but just go read a Klingon dictionary and I’m sure you’ll find a good alternative. Your tagline is “What eBay used to be”, at least until you pop up on their lawyers’ radar. Market it as specializing in collectibles, unique trinkets and such, and in your literature equate eBay with Wal-Mart.
I like the idea of a viable online auction site whose marketing mantra is “What eBay used to be.”
Randy Smythe argues that the company best poised to capitalize on the old-fashioned internet auction market is eBay itself. In a recent post, Randy suggested that eBay spin itself into three different entities:
The gist of the idea is this:
- eBay Stores have been the red-headed step child of eBay because they aren’t as profitable as other segments of the business, yet there are over 500,000 stores/shops worldwide. eBay should set them free –empower eBay store owners and get out of the way.
- Auctions: I contend that Auctions are dying because of Fixed price being in the same marketplace, many of you disagree. Auctions need scarcity and uniqueness of product to thrive and the concept of auctions is 100’s of years old — It just isn’t a high growth business any longer. eBay should set them free — empower auction sellers and get out of the way.
- Fixed-Price: A fixed price retail environment is the growth engine for ecommerce and eBay needs to maximize this business, but they can’t do it on the same platform as Auctions and they can’t do it without spending money. eBay Express was a good idea that was poorly executed from a business and marketing standpoint. It always need to be a separate platform with separate inventory and a huge, well thought out advertising campaign without one mention of the name eBay.
eBay has precious few months, if not weeks to turn this ship around or it will be a painful experience for all involved (employees, investors, sellers and buyers).
That’s great advice eBay, are you listening?