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Mar 2011

Has eBay given up on being eBay?

Posted in Business tactics | 0 Comments

Two-point-four billion dollars. The highest purchase eBay’s ever made, and now GSI Commerce is theirs, they’ve got access to a mind-numbing amount of brands, in an ongoing attempt to transform themselves from the site that’s sold everything from your old wardrobe to one person’s virginity and someone else’s blackness, to something more similar to Amazon.

Sadly, it’s not going to work. If you found yourself on the principles of an open market, an auction house that allows anyone to sell almost anything, and find success beyond your wildest dreams, you have one main advantage: your service tends to make Amazon’s Marketplace look fairly bad.

A crisis meeting may have been called. Evidence that Amazon Marketplace is, in fact, very reliable, was probably shown to company directors. And of course, most eBay users do not log on to buy anything from eBay itself.

In their new direction, I think this may be what eBay are missing – they are not an online shop to most people. They are the site where people sell their stuff, nothing but a middle-man. To start selling products out of their own garage is going to throw people, slightly. I’ve seen their brand pages, and even after getting over my aversion to eBay a wee while back (my old argument being it’s being run by anonymous users with infinitely less accountability than corporations – incorrect, I know), I wouldn’t touch them with a tent pole.

It’s worth asking what makes me feel that way, and I guess the answer would simply be that they’re not a company I buy things from, just a site I use to buy things from random people around the world. I’d stick with that angle, because no one’s ever going to out-do them.

Competing with Amazon, even if you’re just as big, if not even bigger, is a fairly silly idea. As is Microsoft’s attempt to rival Google’s eponymous engine with Bing. It begs the question of why, exactly, companies this large haven’t yet realised that they are their own brand. Amazon is “buy new stuff, at a shop on the web.” eBay is “bid on auctions”. They all have their unique angles, and bar Apple and Google, no one’s done that well by attempting to branch out.

Arguably, the range of brands is impressive, with GSI Commerce having deals with everyone from Ralph Lauren to Hewlett-Packard. The problem this raises is that sellers are now going to need to slash their prices.

It’s a buyer’s market – if I know eBay’s doing a Ralph Lauren polo for £80, I can guarantee someone’s selling it, with postage costs included, for £75. It looks like a bizarre eventuality, of eBay competing in a price-war with its own users. Then again, if it wasn’t going well, it wouldn’t be expanding, so we’ll wait and see.

Still getting my new stuff from sellers and Amazon, though. For now.

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