Monday, August 15, 2005

What's new?

one stop under left a comment on the entry about the top 20 auction sites.

"Top 20 auction sites? Isn't there only one that matters? This is pretty much a "winner takes all" industry, with numbers 2 to 20 fighting over scraps."

So I have been thinking about it, and the simple answer to that is no. Look at my previous entry.
You will note that the retail world is going to change drastically over the next five to ten years. Online Auctioning is going to become a big part of e-commerce for many small and large companies. Yes eBay currently have a monopoly in the market, especially the consumer market. But the model is just to simple, i.e its easily copied. What protects eBay? Perhaps patents around the way they display and the tools they have used. Can someone work around that. Yes I think so, but in this case I am only talking about the consumer market. The business market is open to the world and thus why Yahoo has bought a stake in eBay have been unsuccessful moving into the Japanese market and now they are going to have to put up a fight to stay in the Chinese market.

Ok so big deal you may say since eBay's core market is the consumer market and no one break that. That's incorrect. An auctioning site can open up their site to allow people to reference their eBay seller status for a start. I don't know if this is legal...something I have to look into.

The other thing is, eBays growth is coming from online eBay stores, i.e the power sellers. But once they move to the more sophisticated model, eBay is going to loose a lot of its clientele.
If they then create a relationships in they can keep that relationship when moving to Yahoo auctions for example.

I don't think eBay is going to remain number one in this game. Only thing going for eBay is PayPal which if they can become large enough quick enough and work out the micropayment model, that alone is going to become a multibillion dollar business. The micropayment model is a hard one to crack and if it is cracked chances are all the banks will be there sharing the spoils so may not end up being as big a cash cow as eBay hopes.

Something to watch for.


One Stop Under said...

Don't forget that eBay has the brand name, and they have all the users. There's little point trying to sell stuff on other auction sites (remember, because all the eyeballs are over at eBay. Sellers go where the buyers are.

eBay has the users locked in - their auction history and reputation can't be transferred to another service. eBay's software, design, etc can be easily copied by a competitor, but they're going to have a lot of trouble getting a critical mass of buyers and sellers to challenge eBay.

Of course, eBay needs to be careful. They have pretty bad customer service, and if they turn away too many people, one of their competitors might start to eat into their market share.

Vinny said...

Yes you are right they do have brandname awarnes and the eBay brand name is worth a lot.
I don't know what the legalities are around taking your status across from eBay into another auction site. I'll take your word for it, that it can not be transfered, but that does not matter.
Say Vinny Auctions allow their users to point to their eBay auctions when they list an item. Yes that may canabalise some sales but you are doing that to create a relationship initialy.
So how would something like this work?
You refer the person to your ebay listing or store and get them to ask you a question and in that question quote a yahoo listing which belongs to you. tell them you will give them a discount of 5% for doing so. If they do that, they verify that you are legit, and will then purchase from your vinny's auctions listing. This way you start to build a history in vinny's auctions.
Now the question is why would you do that? Why would you give some one a 5% discount? Well you would do it because Yahoo is not charging because they are establishing themselves in the game and perhaps providing you with some other incentive like discounted credit transactions or discounted access into or some other venture of theirs.

The above is all hypothetical. I dont know if there are again legalities with the above.
Perhaps you can not solicite a sale in any manner using eBay, even if it is not the item actually being sold. I dont see how that could be the case when people refer their buyers to their business sites which are not affiliated with eBay, but then again i could be wrong!

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