The Death of eBay Is Coming . . . And I can’t wait

A guest post from Terry Gibbs. I am on Terry’s mailing list and he always talks a lot of sense about eBay, marketing and life in general. This recent information on eBay and Terry’s thoughts is worthy reading.

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The Death of eBay Is Coming . . . And, I can’t wait.

I was originally going to call this article eBay 2010 and show you what eBay will look like in two years. But for two simple reasons I decided to use the death of eBay instead.

First – The death of eBay is more dramatic. This means there is a higher chance you’ll actually read this.

And Second – In two years we won’t care what eBay will look like because we’ll no longer be using eBay as a selling venue.

That sounds pretty optimistic, but I think I’m on the right track. Let me explain. . .

Today I got a notice from eBay about upcoming changes. Just the normal eBay changes we expect every six months or so. Basically a bunch of different things designed to hide fee increases.

That’s normal and if you’ve been following my advice for a while, you can surely stand a small increase in selling costs. It’s a cost of doing business, and we’ll swallow it.

Most of us will even swallow the fee increases without whining.

But there is something else in the announcement that is more important.

Beginning in late October 2008 – only about 60 days from now – eBay will no longer allow buyers to pay with checks or money orders.

When the change goes into effect, buyers can only use PayPal, ProPay or a Merchant account. I’m not familiar with ProPay but they look like a Merchant account with a yearly instead of monthly fee.

What does this mean for eBay sellers like us?

Currently about half of my buyers pay with checks and money orders. Some weeks everyone pays with PayPal, other weeks everyone seems to mail checks or money orders.

This means about half of my buyers will either have to start using PayPal or stop bidding. I bet a lot of them will just stop bidding.

Now remember, I sell used toys to collectors. Antiques and collectibles. People who sell socks and batteries probably get almost all their payments through PayPal. This change will have little, if any, effect on sellers of new merchandise.

For those of us who sell used merchandise ending prices will go down as the bidder pool shrinks.

As a side note – the rarest and most expensive items I sell are almost always paid for with checks or money orders.

Some of this preference is surely because of limits on PayPal transactions, but I think most of the reason is because the people who are buying the rarities are occasional buyers. I don’t think the occasional buyers want the hassle or learning about PayPal. They just want to write a check and put it in the mail.

If this prohibition on taking checks and money orders effects selling prices, and I think it will, it’s still only half the reason for eBay’s coming problems.

Another change eBay announced earlier this year is the end of LiveAuctions. This means later this year, auction houses will no longer be able to list items on eBay they sell at a live public auction.

This change is the doorway that will kill eBay for us.

You see, eBay has been moving from a place where people sell used items – antiques, collectibles and other unwanted items like you’d see at a yard sale or flea market – to a place where people sell new garbage.

A flea market is antiques dealers and people having yard sales at one location. These are really popular in areas of the country where it’s hard for people to have yard sales because they live in small towns. A flea market is a gathering place where buyers can see lots of yard sales at once. The dealers also go because the buyers are there.

EBay used to be just a flea market.

We don’t have flea markets here in Arizona anymore. Partly we don’t have flea markets because the way our towns are laid out it’s easy for shoppers to get from one yard sale to the next.

But mostly we don’t have flea markets because they were taken over by junk sellers. The flea markets became swap marts.

Swap marts are places where people sell brand new imported garbage to people with low standards.

If you want cheap tools you’ll throw out as they brake a swap mart is the place to go.

If you want a pair of socks cheap and don’t mind if one is a little longer than the other – swap mart.

A swap mart is also a good place to find home made candles and other crafts.

But you won’t find quality used merchandise and you surely won’t find antiques and collectibles dealers.

The dealers won’t go to a swap mart twice because the buyers aren’t there. The buyers won’t go twice either because the sellers aren’t there.

One of eBay’s advantages has always been their category structure. As a shopper I can look only in the specific categories that interest me. I can ignore the whole swap mart area.

The problem is the swap mart side is where the majority of eBay’s complaints come from. This is probably where the majority of their buyers and sellers are.

The swap mart side of eBay is surely the area their MBA (Master Bullshit Artist) managers are comfortable with. These managers wouldn’t know an antique if their interior decorators picked it out for them.

Because the swap mart side of eBay is where the people who create problems are and where the MBA running eBay are focus we get screwed.

You can see the evidence of problems and rules springing from the swap meet side in eBay’s changes.

As part of the changes, eBay is now setting shipping rates for books and music. In February eBay added rules prohibiting some sellers from offering electronics and other swap mart items.

Oddly, porn sellers will be able to continue to take checks and money orders. I guess that’s one area of the swap mart where eBay doesn’t have problems. Or maybe their managers just like porn?

I don’t know and the porn rules don’t effect me and probably don’t effect you either so lets move on.

The point I’m making here is eBay is making rules for all users based on problems with a small group of users. This means sellers of antiques and collectibles like us are being hurt by the people on the swap mart side.

Back to the Death of eBay statement. . .

Today lots of antiques and collectibles are sold on eBay. EBay is probably the number one online venue in terms of dollar value. LiveAuctions is probably second in terms of dollar value and lots of their sales currently go through eBay.

Following those two online venues are mall type sites like TIAS. TIAS probably comes in a distant third. There are also other malls.

As far as I know there are no other online auction venues with a big following of users for antiques and collectibles.

EBay’s changes that negatively effect antiques and collectibles dealers present an opportunity for someone smart enough to exploit it.

I think – at least I hope – what we’ll see early next year is a venture capitalist teaming up with LiveAuctions to start a specialized auction site just for antiques and collectibles.

LiveAuctions will get the buyers to start shopping, and the removal of the restrictions eBay is forced to implement because of their Swap Mart mentality will get the sellers to shift over.

Think about it. An auction house like Heritage in Texas with a huge following in the sports collectibles and comics niches would expose all their users – hundreds of thousands of them to the new site.

As more auction houses in other niches move onto the new venue more buyers will follow. Get enough buyers on there and the sellers like you and I will move our listings over.

If the new site is like what eBay was 10 years ago we’ll be happy to move our auctions over.  Especially if the new site offers lower rates and fewer onerous rules.

Some discounted listing fees or even better no listing or and cheap reserve fees during the introductory period and we’ll be listing on the new site instead of eBay.

The transition to the new site will take a year or two, but once sellers start seeing good results on the new site, word will spread fast.

It’s just a matter of time before this happens. Because the transition will take time, we’ll still be able to get fair prices on eBay, and ALL the eBay selling skills we’ve learned will transfer right over to the new site.

Now you’ve got something to look forward to.

Side Note: If you’re a VC already working on this concept, you should buy me lunch. I know lots of antiques dealers and understand their concerns well. I also know just a little bit about marketing. I won’t eat at McDonald’s but Burger King is OK.

Terry

Terry’s website is IWantCollectibles

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