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IS IT TIME FOR EBAY TO SELL THEIR AUCTION BUSINESS?

April 30th, 2010 by Skip McGrath

At eBay’s annual meeting, CEO John Donohoe said that auctions now make up less than half of all listings on the site. And he predicted it would drop to 30% by 2011.   Just a few years ago, auctions made up around 70 percent of the listings on the site but in the last quarter they were only 45 percent.

This is not by accident. Since Donohoe took over, eBay has made a concerted effort to look more like Amazon, attract large merchants and focus their growth on fixed price selling.The very nature of the auction business is that it only works when there is a sense of community and a shared passion between buyers and sellers. Those are the traits that made eBay successful. And, these are the same traits that  eBay has assiduously tried to kill over the last few years since Donohoe arrived. Actually it started somewhat before Donohoe took over, but has accelerated under his leadership (or should I say lack of leadership).

So John – since you don’t care for that segment of your business, why don’t you just spin it off like you did with Skype.  I am sure there are buyers and it could even make sense as a public offering. You could sell the auction business with the caveat that whoever buys it cannot compete with eBay in fixed prices selling –it would have to remain an “auction only” business.

Who would buy eBay’s Auction Business?

Personally I think it would be a good acquisition for Yahoo. They are struggling and this could make them right over night. Yahoo tried the auction business once and they did a good job with it –but they were too late as eBay already had the market share and Yahoo just couldn’t penetrate. But today it could work.

I suspect there are also some venture capital groups out there who would salivate over an opportunity like this. eBay could sell 60% to a VC group who would fix the site and take it public and eBay would have a win-win. They would be getting rid of something they don’t like and they would make a ton of money.

So what do you think? Leave a comment. I would love to hear your thoughts.

Skip McGrath

Comments

Comment from Susan Weinberg
Time April 30, 2010 at 11:56 pm

Hi Skip,

My husband thinks that’s an excellent idea of Yahoo or someone with venture capital buying it.

Regards,

Susan W

Comment from Sarah
Time May 1, 2010 at 8:21 am

I think you are right on the money! The whole charm of eBay has changed and is making people a bit cynical about it. If John doesn’t want the auctions…sell it to someone who does.

Comment from Beth Cherkowsky
Time May 2, 2010 at 9:24 am

I think it’s a marvelous idea – now how do we get someone to pull the trigger on it?

I am SO not interested in doing Fixed Price listings. I love auctions – If I wanted to sell Fixed price I’d sell socks

Comment from TomH
Time May 2, 2010 at 11:44 pm

When the disruption started many suggested the eBay platform be split with eBay Classic as the auction element. I thought at the time that was a good suggestion as I have never understood how you can mesh Fixed Price and auctions in the same search pool realistically.

When Yahoo auctions were running we were selling 45 percent of our volume there. Yahoo ended auctions realistically also, as I remember, adding a bit of time after the last bid.

However, Skip, if your proposal ever happened I would hope that the resulting platform would be simple and clean like Google’s appearance (but I would not want a Google auctions).

Comment from Consignment Pal Resale Directory
Time May 3, 2010 at 7:24 am

Excellent idea Skip!

eBay Trading Assistant consignment sellers would love an auction platform that “loved” them back.

Now eBay is way too one-sided in favor of the buyers and the DSR situation will get even worse in September!

Linda

Comment from jesspetersen
Time May 3, 2010 at 8:09 am

Selling the auction portion would be a win for everyone. eBay would prefer fixed price only and the current users would prefer a better auction climate. Plus whoever purchased eBay auction would make money.

Comment from Monty
Time May 3, 2010 at 4:48 pm

I think it’s a great idea! Since I started listing with eBay there have been so many changes that have hurt our business that we closed our store and are looking for other options. It was great when we started but they have changed way too much. They are clearly not into the auction side of things anymore. They are also not taking care of sellers who work really hard and have perfect scores it’s all about the buyers these days. That leaves sellers feeling like we are not supported in the eBay community. Time for a big change.

Comment from mojavelyn
Time May 3, 2010 at 6:48 pm

1. Yahoo tried auctions. Remember folks? then they kicked the Americans off and only allowed Asians. And you want that back? And if Yahoo couldn’t make a go of it then, what makes you think they can make a go of it now?

2. Ebay just won the patent for an online auction process. After 11 years in court, they aren’t going to just ‘give’ that away even for a few Billion.

Comment from jeanne
Time May 3, 2010 at 7:37 pm

I sold for a short time on Yahoo and loved the site and was very disappointed when they shut it down. Your idea makes so much sense but I think JD is a very sadistic person and would not be interested in making available to all the ex ebayers and current ones that are struggling to survive an opportunity to sell what they love,vintage items and sell them in an auction. I can’t believe times have changed so much that it would not be a successful undertaking.

Comment from Digby
Time May 3, 2010 at 11:03 pm

It would take a lot of money.
And if auctions are declining, why would someone with lots of money buy it ?
If you want auctions – try ebid.

Comment from Mary C.
Time May 4, 2010 at 5:39 am

I think it’s a good idea, IF they get rid of DSRs, IF they allow the sellers to give negative feedback to non-paying buyers, and IF they charge reasonable fees!

Comment from Delores S.
Time May 4, 2010 at 11:43 am

It would be nice if ebay sold the auction portion of their company. I personally have always preferred auctions as a buyer and seller over fixed priced items. If someone like Yahoo bought it, those few remaining ebay sellers and buyers who do not like fixed price listing could walk out on ebay and head over to the new auction site. This would prove to Mr. Donahoe that his ideas stink and that most people want auctions. There will always be those who want fixed price items but ebay can forget about being as big as Amazon. It will never happen unless Amazon was struck by lightning in 2012.

Comment from Betty
Time May 4, 2010 at 3:42 pm

I think the real answer is to get rid of John Donahoe, but seeing as that is not likely to happen, you’re yahoo suggestion sounds ideal ! Donahoe, or Meg, or a combination of the two…decided auctions were not want they wanted for Ebay. Sales began to drop like crazy. Everyone LOVES the auctions- this is what drew us to Ebay in the first place. Then, we became ‘The Noise’ (per Donahoe) ‘The Fleamarket groups’… You know, all that which made Ebay successful? Fixed price items were always available on Amazon and in Google Search- Ebay was our own place to join in and bid on those great items. New stuff? That can be found anywhere!! We were selling the ‘Unique’, the ‘hard-to-find’, vintage items. Folks loved it!! This change- plus the addition of Best Match, Sponsored listings, the DSR system and taking away the seller’s right to leave anything but a positive feedback for buyers, has ruined our beloved Ebay.
We all want it back. WHY doesn’t Donahoe listen? Is he crazy? Betty

Comment from Betty
Time May 4, 2010 at 4:31 pm

Can you imagine what would happen if it were announced that the OLD EBAY was back?

That auctions were IN- the fleamarket and garagesale look was back?
That the DSR system is gone.
That honest feedback can now be left by buyers and sellers?
That BEST MATCH no longer exists?
That your items are ALWAYS found in search?

Can you even begin to imagine how MANY buyers and sellers would FLOCK to EBAY?
This would be the news HEARD AROUND THE WORLD!!
And Ebay has it IN THEIR POWER to do just that !!

Family incomes would one again be raised !
Our local Post Offices would once again be FLOODED with our business!
People could afford to BUY AGAIN !
Unemployment would DROP..

Our sales never stopped due to the Economy-
Ebay was a MAJOR cause of the drop in the Economy !
They (EBAY) COULD BRING IT BACK !!
Does anyone think it strange that the economy dropped when Donahoe hit Ebay”
Think about it. Betty Lou

Comment from kevin
Time May 4, 2010 at 6:57 pm

sellers have been crying out for a viable alternative to ebay (that actually has buyers) for years. It will actually happen someday, that’s just the way the marketplace works. Businesses rise and fall. So will ebay. There is opportunity, and someone will seize it. I just hope it happens sooner than later. Ebay just does not get that if they want they want sellers to provide this outstanding service to buyers, perhaps the crappy customer service they provide to sellers is setting a poor example. They just don’t lead by example. They don’t care now, but someday they will wish they did

Comment from Barbara
Time May 4, 2010 at 7:06 pm

From your lips to JDs ears! This would solve a multitude of problems for sellers, bidders AND ebay (from what we understand) 😉

Comment from Adam
Time May 5, 2010 at 6:44 am

You would think auctions would be their pride and joy. Auctions on a timer create a sense of urgency. Anyone in sales knows how important this is. Fear of best match search results are likely the only reason for the decline. Ebay thinks buyers are sick of auctions and being outbid. That may well be true. However, as long as there are good deals to be bought in a safe trading environment buyers will always come. Example…New dvd player 99 cents no reserve auction with results showing time ending soonest…..Anyone really believe this item won’t sell?……Even if the seller loses money on that item ebay still gets paid regardless. So why do they wish to kill that segment of their business? How could this possibly make sense? While trying to be like amazon ebay is just losing more customers to them…..

Comment from QOOL Q
Time May 5, 2010 at 2:50 pm

I believe selling the auction side would be a great idea. The auction market needs undivided attention and must hold value to it’s owner, if ebay doesn’t value auctions anymore, then many of us auctioneers won’t have a successful outlet.

Comment from RANDY JOHNSON
Time May 5, 2010 at 8:19 pm

JOHN DONAHOE IS CLUELESS AS A CEO. I HAVE NEVER SEEN A MORE COLD HEARTED COMPANY IN ALL MY LIFE. THE GREED THAT HAS COME FROM THIS
COMPANY IS UNBELIEAVABLE. HE HAS SCREWED UP THE FEEDBACK,THE AUCTIONS,THE STORES,THE FORCED PAYPAL FIASCO AND NOW HE TOOK AWAY THE STORES.I WOULD MOVE MY ENTIRE INVENTORY OVER TO YAHOO OR ANYWHERE ELSE IN A HEART BEAT AND USE GOOGLE CHECKOUT. I CURRENTLY USE PROPAY FOR PAYMENTS AND WILL NEVER ACCEPT PAYPAL AS IT WOULD TAKE A LAWYER TO READ THROUGH THE PAYPAL DISCLAIMER. I WONDER WHY THEY DON’T BECOME A CREDIBLE CREDIT CARD PROCESSOR INSTEAD OF A ONE SIDED MONSTER. THEY CAN HOLD ANYONES MONEY FOR 6 MONTHS FOR NO REASON AND COLLECT INTEREST ON IT. EBAY IS ON IT’S WAY OUT AND SITES LIKE ECRATER ARE STARTING TO COME TO LIFE. I SOLD $900.00 WORTH OF RAILROAD LANTERNS TODAY TO AN EBAY CUSTOMER AND IT COST ME NOTHING IN LISTING AND SELLING FEES.DO THE MATH AND FIGURE OUT WHY THE PEOPLE ARE MOVING. I HOPE EBAY IMPLODES ALONG WITH DONAHOE LOOSING HIS JOB.RANDY-CURLIEQLINK

Comment from Russ Ketter
Time May 6, 2010 at 5:10 pm

Hi Skip, nice idea, wrong world, ebay wants every penny that Amazon, Wal-Mart and the banking/wall street guys can’t scoop up first. Business in America? Nah, ship customer support out of the country, along with your sales (auctions) so you can copy the above named. Is this really what they teach in America’s business schools? Or is it just a Bain & Co. thing. Great idea, fat chance.

Comment from Kathryn
Time May 7, 2010 at 12:53 pm

I thought eBay was migrating away from auctions. I’m glad to know I was not losing my mind!

Selling off the auction component makes sense – maybe they should sell it to Amazon. Now there’s a company that respects its sellers and customers!

Comment from Hilary
Time May 7, 2010 at 1:51 pm

For us folks who still love to sell vintage/antique items via auction, I would think it best eBay sells it. They do not appear interested in what really started eBay which was the casual setting of auctions of old/pre-loved items. I am retired and over “the rules” as I used to think eBay was fun. Now, it’s one big hassle.

Comment from Susan
Time May 7, 2010 at 2:59 pm

I could not agree with you more! I have ridden the rough ‘seas of change’ through the Donahoe reign and I could not be more unhappy. The ‘old’ eBay was fun AND responsible. Buyers and sellers, generally, respected each other and enjoyed the entire buy-and-sell transaction. The original concept of eBay being that ‘BASICALLY people are honest’ is a concept that has long gone away. Sellers AND buyers used to understand when ‘things happen’ ~ an item got ruined and money got refunded .. or.. a buyer ended up in a hospital and TRULY could no longer afford to pay for the item. Seller AND buyer understood these types of happenings! Now…. well, how it has changed. I, as a seller, now even have to be responsible for packages that ‘never arrived’ even through the Delivery Confirmation shows it was delivered to the RIGHT address. (I am NOT Macy’s and can afford to refund all expenses to a buyer and be out the item as well as the payment as well as the postage paid to the Post Office!!) As a seller, I can no longer warn other sellers with a negative feedback on a ‘questionable’ buyer. As a seller, I can ‘only’ accept payments through Paypal! Now, were I a buyer, my rights are FABULOUS!!! As a buyer, I could claim my package never arrived and with little effort, get my money back, my shipping costs back, AND cause the seller to get a ‘mark’ that could cause their suspension. As a buyer, I KNOW my handling of the transaction can receive NOTHING but a POSITIVE feedback. Doesn’t this all sound a little one-sided?? What in the world was wrong with eBay being DIFFERENT than Amazon? It was a wonderful way to make a little extra money – or make a living – without it costing an extreme amount of ‘fees’ – making fair deals to both buyer and seller. Older and antique items were WONDERFUL here on eBay ~ now – surely not an avenue of profit! Something HAS to CHANGE! Selling the auction department of eBay ~ GREAT idea, but will never happen. Someone needs to follow eBay’s lead – go back to the ORIGINAL ways of ‘honest’ buying and selling – have ‘affordable’ fees – rebuild the TRUST between buyer and seller – stand behind BOTH seller and buyer and a transaction WHEN necessary (but in the ‘old days’ buyers and sellers used to be able to ‘fix’ problems without major issue!!!) We just need someone to care. eBay no longer cares about anything but IT’S BOTTOM LINE! How sad. Most of us keep holding on to memories – hoping and praying our pleas will be heard and things will return to the way-they-were. I truly believe the ONLY possible way to have this even BEGIN to improve is to remove John Donahue from his position. STOCKHOLDERS speak YOUR MIND – Hear our warning – YOUR company is going under!! Sell your stock now! Thanks for giving this opportunity for me to ‘spout-off’! Regards, Susan

Comment from Debbie
Time May 7, 2010 at 6:30 pm

I have been a seller on eBay for 8 years. My biz grew, but with all the fluff junk on the search pages (i.e. Top Rated Seller Ribbon)-the site looks junky and has done nothing but lose sellers. Sellers are discouraged (not only do we have the feedback but now Donahoe has implemented TRS making sellers more vulnerable to hurtful comments).

I think the idea of selling off the auctions to another company is a great idea. I know I would follow.

I can’t stand the way Donahoe is handling eBay and had a very bad feeling about him the day he took over. My intuitions were right on the money.

Most of my previous customers have left eBay because of the daunting changes that have taken place. We need a simple platform and it has yet to be accomplished. Instead the site has become more cumbersome and complicated. Thank you for letting me post my disgust with the way eBay is being run now. Where is Meg???

Comment from josie
Time May 8, 2010 at 7:38 pm

A friend told me today about Overstock.com having auctions available on their site.

Does anyone sell or has anyone had luck selling through their auction venue?

Looked at it today & it appeared interesting & to be similiar to the way ebay was set up originally with their auctions & fees.

I don’t remember hearing or reading anything about it.

Any information would be appreciated.

Thanks

Comment from bob
Time May 9, 2010 at 6:03 pm

I started in Ebay in the nineties, and had a blast selling and buying vintage stuff for many years. I never had a bounced check, and had only a couple of eventful auctions out of hundreds, both resolved amicably. A few years ago, D and crew started wrecking the magic. I went offline when they required paypal, and have been offline since. I have an account set up to get back on Ebay (having realized no one else is taking over in earnist). Problem is I just can’t be bothered to do it. I just don’t have the initiative I had when Ebay was fun. It’s sad when I prepare to get back in and feel dread about it.
I hope the auction site is sold, and the rest of the Ebay tripe go down in flames. They deserve it.

Comment from Jim
Time May 13, 2010 at 2:08 pm

This would be the best news ever !!

All the eBay auctions would move to Yahoo Auctions. Everyone from eBay would simply transfer to Yahoo who wanted the auction format. The amount of auctions would then remain the same. When Yahoo was running their own auctions, everyone was still on eBay and Yahoo just couldn’t compete. Without eBay that problem would dissapear.

The BEST thing that would happen — NO MORE FORCED PAYPAL !! Yes, checks and money orders become reality again !!! And you can give your buyer FEEDBACK !!!!

Please — let’s all pray to the Auction Gods that this will occur !!!!!

Comment from Terri
Time May 15, 2010 at 10:54 pm

I have forwarded this article to Yahoo and asked them to forward it to Yahoo’s CEO. I suggest everyone do the same and ask all your friends and family including your friends on facebook/twitter/myspace to pass it on to Yahoo. Maybe they will, if they know enough people would like them to start auctions again, now that ebay is DEAD and don’t give a rats arse about anyone but themselves!!
Greed will catch up to ebay and Donahoe someday, and not soon enough!
Can anyone say KARMA?!

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