Part II/IV — Analysis of eBay 2015 Fall Seller Update
This is part two of a four part series covering eBay’s 2015 Fall Seller release:
1. EBay 2015 Fall Seller Update: What you need to know: In this post, we covered the highlights of the release that have the most impact for larger sellers and details of ChannelAdvisor’s support.
2. Analysis of eBay 2015 Fall Seller Update (you are here): What does this release mean for sellers? In this post, Scot Wingo, Executive Chairman, provides thoughts on what this means for where eBay is taking the marketplace in the post-PayPal-separation world.
3. What’s NOT in the eBay 2015 Fall Seller Update: One of the most telling parts of the release is what is not included. In this post we’ll look at that and analyze why key changes were not made at this time.
4. EBay Product Identifier (ePI) Update: We’re getting a lot of questions from sellers about ePI and the status of this initiative. In this fourth post, Scot will give an update on this key eBay strategic initiative.
Analysis of EBay 2015 Fall Seller Update
In the first post, we walked you through all of the updates that eBay is making in this release. In a nutshell they are: simplified seller standards, seller hub and returns management.
What’s important to realize about this seller release is that it’s the first release following the eBay/PayPal split and under new CEO Devin Wenig. Back in April, before the PayPal/eBay separation (which was July 20th), eBay announced that Hal Lawton, from Home Depot, would be the new leader for the North American marketplace business. Hal came in and built a new team and this is the first release under their leadership.
For long-time eBay sellers, this release is interesting because not only is it the first post-separation, but it gives us some insight into the thinking of this new management team. In this post, we’ll look at the features through that lens to get a feel for anything in the tea leaves that can help you plan for the future of eBay. In short, we think eBay got some things right, but left some significant questions unanswered.
First Things First, What Sellers Does EBay ‘Want’?
In the spring, eBay hosted a top seller event and talked to many of the largest eBay sellers about their plans and got feedback around some of the changes we learned about last week. Then, as part of the roadshow and a PR blitz, CEO Devin Wenig was quoted saying eBay is focused on small and medium sellers, not large sellers. For example, this Internet Retailer article and Marketwatch piece mention similar comments.
At ChannelAdvisor, we primarily work with eBay’s largest sellers (what they would call large sellers, top sellers, etc.) and they were confused: “In the spring eBay loved us, now they are saying we aren’t the focus. What kinds of sellers is eBay seeking?” I was recently able to catch up with Hal Lawton and get some clarification here.
At the end of the day, it comes down to semantics. In the US, after experimenting with eBay Now (ship from brick and mortar stores), BOPUS (Buy Online Pickup Up in Store aka Milo) and other ‘offline/brick-and-mortar’ areas, eBay has decided it’s time to stop actively recruiting those types of businesses (what I would call IR 200 or omnichannel players). Instead, it is focusing on the SMBs (what we call mid-market at ChannelAdvisor) and C2C sellers (the closet cleaners or what I call FSBO type sellers). The other nuance here is the word ‘recruiting.’ If you’re an omnichannel IR 200 and want to sell on eBay, you’re welcome to, but eBay is not focused on the recruitment of those types of sellers like they were previously. We explore the ‘why’ of this change in a bit.
So to recap:
- Large sellers, top sellers, Platinum PowerSellers, gold PowerSellers, etc — eBay still loves you and in fact wants to re-focus on your success.
- Small sellers — eBay loves you too.
- Individual sellers/FSBO/closet cleaners — eBay is re-focusing on you.
- Large brick-and-mortar retailers/IR 200/omnichannel players — you’re welcome to sell on the platform with >157M buyers, but going forward, eBay’s not going to be heavily focused on recruiting you.
There are two pieces of this strategy that we don’t agree with:
- IR 200/large brands — The implication of not going after big brands and retailers is that they haven’t been successful on eBay. Sure, there have been some high profile flameouts, but there are also many successes. When brands and retailers understand eBay’s audience and treat the marketplace more like an outlet/discount channel, rather an ‘in-season comparison shopping-esque’ channel, the results are quite strong. In fact, these types of sellers drive a LOT of the eBay Daily Deals, which eBay also touted as a huge success during their separation roadshow. IMHO, eBay has to be careful not to throw the baby out with the bathwater here. The right IR 200 and top brands can bring a lot to eBay and co-exist. As we’ve learned at ChannelAdvisor over the last 14 years, the trick is to set these retailers’ expectations correctly and work with them to get the right product for the eBay audience. When you do that, these retailers bring a lot to the eBay ecosystem and make it better for everyone (think anchor tenants in a mall).
- C2C/FSBO — EBay has more data than I do, but I don’t get this one. EBay is competing against a ton of other venues that going after these folks and most of them are free. You have the old-school Craigslist (free) or the slew of new apps that are designed to help you sell stuff online with a local flavor or a certain vertical — such as PoshMark, OfferUp, NextDoor and perhaps scariest, Facebook. This is the tip of the iceberg. About once a month I see an article about a new ‘free local commerce/classified company raising $100M to take on Craigslist, like this one. All of those options (even eBay’s own Kijiji) are free. Yep, free. Heck, while I was writing this, I saw that ThredUp raised $80M+ for its C2C apparel solution. Who is going to elect to spend 10%+ on eBay to sell something and generally pay listing fees for an item that doesn’t sell versus listing an item for free? It’s anecdotal, but everyone I know that had a hobby selling on eBay has stopped because of the fees and moved to free alternatives. Thus my theory is that in order to win this segment, eBay will have to move to free. So, what’s the point?
Conclusion: Driving eBay’s strategy is a desire to offer a full ‘spectrum of value’ to consumers, from new in-season to liquidation to refurb to used — which makes some sense in terms of differentiating from Amazon. But on tactic of defocusing on IR 200 and refocusing on C2C to achieve this, I ‘agree to disagree’ with eBay and look forward to your point-of-view in comments. The re-focusing on top sellers is a good move in my opinion. Also, getting out of the delivery business and offline stuff is smart because all of that was a distraction.
Now that we have the ‘what sellers does eBay want’ angle settled, let’s look at the 2015 fall seller release.
Thoughts on the Fall Seller Release ‘Package’
As we mentioned before, if you could find one theme for this release, it’s ‘simplification.’ Overall, we think this will be a welcomed change for sellers. My favorite part of the release is the ‘new seller standards,’ so let’s start there.
New Seller Standards
Like many of you readers, we’ve been working with eBay for more than 14 of its 20 years — so, we’ve seen a lot of changes. One thing I’ve noticed, and I’m sure most of you have too, is that the first two things a new management team touches is the feedback system and fee structure. When we say ‘new standards’ that’s what we’re talking about. Pierre was positive/negative/neutral feedback, Donahoe added DSRs then there was a shadow-feedback system around NPS.
The teams under Devin and Hal are trying to both simplify things (we have feedback + DSRs + NPS + ODR + ? today — I honestly can’t keep up with it all, and most sellers have gotten numb to it) and make it more objective (based on things you can measure with a computer) vs. subjective (“do you feel like the seller did a good job!?”). Simplifying this area is a great move and shows this new team is taking a common sense approach to things, which is important. For example, one poorly thought-out move eBay made in the last big update to seller standards was effectively having returns count as defects and impact seller ratings. Why should eBay automatically penalize sellers for returns? Returns are a natural part of commerce. They happen in e-commerce and the best companies (think Zappos/Amazon) work hard to make them a pleasant experience for everyone involved.
Treating returns as automatic negative events kills sellers in categories like shoes/apparel and used/refurbs in particular. This one change has driven away many, many great sellers that were deemed ‘below standard’ because they had too many returns. These same sellers are flourishing on other platforms.
In conclusion, the move to simplify the seller standards is a good and smart move and can’t happen fast enough — and we applaud the eBay team for these changes.
But, this leaves a couple critical questions unanswered…
It does make you step back and ask the question: If sellers are going to be held to two measures — defect rate and on-time shipping — why do we have all the other stuff? Feedback and DSRs will still be on the site. I’m assuming NPS surveys will still go out. Wouldn’t it simplify the buyer experience to go ahead and strip all that stuff out? Feedback, DSRs and NPS are now effectively extraneous metrics without any clarity around how or if they’ll be applied.
For example, here’s Rock Bottom Golf’s eBay feedback page. And here’s their Amazon feedback page. Put yourself in the shoes of a buyer. On the Amazon page, I see they have great feedback. Then I’m on to the A-to-Z guarantee and their return policy–ice, clean retail experience. On the eBay page, I have ~700,000 feedback posts I can slog through; one, six and twelve month periods to sort by. and DSRs where if I hover my mouse, I can get to 1/10 precision. Where’s the return policy? Where does eBay say, “Hey here’s feedback, but BTW, we will stand by these guys.”? None of that is there because there’s so much other stuff. Also, ironically, I’m not 100% sure, but I’m willing to bet that the two areas eBay is actually measuring sellers on (on-time shipping and ODR) won’t be visible to buyers.
So, we are heading to a parallel universe where sellers will be measured on something buyers can’t ‘see’ and buyers will be looking at a bunch of starts and positives/negatives/neutral that effectively don’t matter. EBay needs to decide what counts and strip away the other stuff to keep things clear and simple for buyers and sellers.
Seller Hub looks like a good refresh to the myriad selling options (SYI, Seller Manager, Seller Manager Pro, TurboLister, Blackthorne, etc). But, with 25M sellers, Seller Hub really appears targeted towards very small sellers and everything is quite manual. So, if you’re a large seller, you may want to look at a couple of reports here around traffic data, but everything else will probably be too manual for the scale of thousands of listings to have a positive ROI for your eBay business. For small sellers (< $10K/M), this should be a great way for you to finally get to all the information you need in one place vs. having to go through two to five different ‘my eBay’ screens that aren’t interconnected.
On the surface, one of the nicest reports is the Terapeak-like price recommendation report. Here’s an example:
The challenge with all of these types of reports on eBay is that they look good on the surface, but when you go beyond scratching the surface, you find that the comparable product data is often unreliable. For example, eBay did a previous iteration of this where it would say things like “you should price your iPad at $50 because that’s the average.” When you looked at five listings included in the analysis, they were for either iPad knock-offs or accessories. The data wasn’t structured or accurate, so we’d recommend going into this one with caution until eBay gets its product catalog strategy 100% solved (the focus of our next post).
New Returns Management
It’s good to see eBay consolidate all the different returns ‘systems’ for merchants. This definitely has a traditional retailer’s (Lawton) fingerprints all over it. Not only is it a good move, but I think it bodes well that we have a real-world retailer at eBay that I imagine is looking at some of these processes and saying, “Guys, I ran a big retailer and you can’t have X different return flows. Let’s consolidate this for our sellers.”
Up Next, What’s NOT in the Release…
To summarize, there are three key components to this release: seller standard, seller hub and returns management. But what about the top two items on sellers’ minds that did NOT make this release? In the next post, we reveal those and dig into what we think eBay needs to do to survive the next decade of e-commerce.
Blog post by Scot Wingo, Executive Chairman and Founder, ChannelAdvisor