EBay Won’t Back Down From Amazon

Discussion
Aug 09, 2012

A grain of salt is required for the next statement. Over the years, from the outside looking in, I’ve developed the impression that eBay suffers from Amazon envy.

But with no way to prove my initial thesis short of obtaining a secretly made MP4 recording of eBay CEO John Donahoe expressing his jealousy (send all secret recordings to geoanderson@retailwire.com), I’ve got little to go on unless you consider all the steps that the company has taken recently to meet or exceed what Amazon is doing in the marketplace.

A key point is eBay’s test of same-day delivery in San Francisco in partnership with a number of large chains, including Best Buy, Macy’s, Target, Toys "R" Us and Walgreens. Amazon is also reported to be tinkering with same-day service in some markets.

For a $5 fee, consumers can place and receive orders seven days a week. Hours, according to TechCrunch, which originally broke the story, are nine-to-nine Monday through Saturday and nine-to-six on Sunday. The service, called eBay Now, is available through an Apple’s iOS app.

A Reuters piece pointed to the significance of eBay partnering with large retail chains as a response to Amazon. A wide variety of chains, including Aeropostale, Barnes & Noble, GNC, Neiman Marcus and RadioShack, have opened eBay storefronts while bypassing the much larger Amazon marketplace audience.

"EBay has been an exceptional partner, working with Barnes & Noble to effectively promote Nook to its massive user base," Mary Ellen Keating, a spokesperson for the bookstore chain, told Reuters. "Amazon is a competitor. We don’t sell on Amazon and have no plans to do so."

Discussion Questions: What do you think of the steps that eBay is taking to establish itself as a major retail presence? Do any of the steps being taken by eBay represent a threat to Amazon.com?

Please practice The RetailWire Golden Rule when submitting your comments.

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9 Comments on "EBay Won’t Back Down From Amazon"


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Rick Moss
Guest
9 years 9 months ago

A search for “Barnes & Noble NOOK Tablet” on eBay returns a 16GB version as the top result for $235 (a 16% savings). On BN.com it’s listed for $249. On eBay, the model is being offered “NEW” from a third party vendor, not from B&N. For the same model, eBay lists “31 new from: $208.99, 75 used from: $19.99, 7 refurbished from: $167.00.”

Perhaps B&N is promoting it in other ways via eBay, but I’m confused on how this represents a partnership. You can do a search for “Amazon Kindle Fire” and pick up similar resold and used deals on that as well.

Camille P. Schuster, Ph.D.
Guest
9 years 9 months ago

Amazon has partnered with some retailers but the partnership is not always announced or broadly promoted. eBay needs to change the image in consumers’ minds of going to eBay for used items or items being resold by individuals. In terms of copying services, all companies need to be aware of services being offered to consumers because once consumers experience a service they like it becomes part of their expectation for other companies with which they do business.

Max Goldberg
Guest
9 years 9 months ago

Good move on the part of eBay. Amazon once worked with many of the larger chains, now they focus on their own business and affiliate ecosystem. eBay has seen its business slump as the auction model has cooled.

Consumers have shown a desire for faster delivery. If eBay can deliver same day service for the big stores, it will have reinvented itself at best, or at worst developed a new revenue stream.

Fabien Tiburce
Guest
Fabien Tiburce
9 years 9 months ago

EBay to me is like MySpace. I know it’s still out there but I don’t know a single person who still uses it. Those high sales commissions didn’t exactly make a great impression, especially when Amazon has none and Craigslist is free. If eBay has indeed changed, it may want to run a PR campaign to tell the world, otherwise it might just remain the “site you used to go to.”

Gordon Arnold
Guest
9 years 9 months ago

A very interesting article. I am of the unsubstantiated opinion that eBay is finding it difficult to provide “offers of interest” in the numbers they need to keep their customers coming back. This is not a problem that the Amazon market is suffering from to the same extent. Perhaps eBay is trying a new pitch in a new market like… “Interested in e-commerce? So why not give it a try in a similar company with fewer big players competing for a bid like eBay for instance.” The focus here is not envy, it is market share.

The better part of this article was only briefly discussed, free shipping. This is a man-made virus spreading throughout the e-commerce industry with no cure in site. It may someday soon even become the leading cause of death for e-commerce participant companies.

Craig Sundstrom
Guest
9 years 9 months ago

Fabian should be happy to know that I still use eBay (just HOW much I realized when I was reviewing my bank statements the other day!). But like everyone else here, I have doubts: in my case they center on the wisdom of moving from something they did well — or at least notably — to something they really don’t have experience in (e.g. selling things). Presumably “partnering” with actual retailers is meant to address this issue, but I find the concept contrived more than innovative…handing off the selling experience to someone else doesn’t sound like a winning strategy.

Mark Price
Guest
Mark Price
9 years 9 months ago

Aside from well publicized initiatives with Target and a couple other major chains, Amazon has maintained a focus on building their own brand, and provides a broader and broader range of products and services under that brand. The knowledge they have accumulated on customer preferences and the Prime service, has made Amazon into a significant retail force.

eBay is taking the only approach that might work as a competitive alternative, using the cachet of other brands to drive traffic to their sites and businesses. The question will be whether eBay can harness the data from those brands and create customer intimacy they way that Amazon does. Otherwise, those brands on the eBay sit will remain disconnected and never receive the leverage that could come from sharing the data.

Dan Frechtling
Guest
9 years 9 months ago

Two observations:

1. Most purchases today touch the internet in some form, whether researching products, finding where to buy, or buying directly. To quote eBay CEO John Donahoe, consumers are taking the “e” out of “ecommerce,” so that it simply becomes commerce.

2. While Amazon has 180 million active customers to eBay’s 100 million, more large retailers have recently chosen eBay than Amazon, partly due to concerns about Amazon’s using retailers’ sales date to compete directly with them.

eBay has addressed the compression of ecommerce into commerce through a series of acquisitions that include Magento (online stores), Milo and RedLaser (local inventory searches), both complementing PayPal. The reason for eBay to emulate Amazon isn’t simply envy, it’s the combination of consumers and retailers seeking an alternative.

Brien Lee
Guest
Brien Lee
9 years 9 months ago

eBay hasn’t been eBay for a long time. As a buyer and seller, I feel more secure under this management. But there are no bargains, from a buyer’s perspective. Many of eBay’s tools are dedicated to flattening prices. It tells sellers when it thinks the seller is offering a price that’s below median as an example. The net result is fewer sales, more relistings, more fees for eBay. So yes, eBay has Amazon envy, but it is undermining its USP. If an Amazon clone is what I’m looking for, I can go to Amazon, and have the item in two days.

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