Archive for May, 2009
May 30th, 2009
Fred Wilson is a venture capitalst who I've never had the pleasure of working with, but I read his blog regularly and he posited an interesting question today about why PayPal isn't actually more wide-spread than it is.
As is frequently the case with Fred's posts, the real value-add is in the comments.
Give the post+comments a read as I think eBay Strategies readers will find it of interest as well.
Do you think PayPal has a big brand/customer service problem out there?
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May 30th, 2009
I did this interview with Business Week about classifieds today and it got me thinking….
On this blog I've spent a good bit of time comparing eBay vs. Amazon's seller business. I definitely think when it comes to 'practicals' Amazon is taking significant share from eBay and others in ecommerce.
But if you think back to the recessionary period of 2000/2001, eBay was counter cyclical. People used eBay to clean out their garages, attics and turning their old stuff into cash.
Newspapers were losing classified revenue to eBay hand over fist as eBay gave people a much easier way to turn their items into cash. You can call a newspaper, create an ad for some wacky $/word formula, put in your phone number and deal with all that, or upload some picture(s) to eBay, set your terms, run an auction and hope for bid-up (which frequently came in those days). eBay even had a local feature where you could look for items around you. I remember getting my first flat-screen LCD monitor and selling my 21" tube-based monitor for $50 on eBay to a local person that stopped by and got it. I don't think you could do that on eBay today – the local aspects have been dumped over the years.
In the current 08/09 recession, eBay hasn't been countercyclical – Why? I've been somewhat 'blaming' Amazon, but some new data out today sheds a big spot-light on classifieds that have been under the radar for a while, but shouldn't be any longer.
Classified Usage Doubled in last 4 Years
The Pew Internet Project has a report out today that you can find here, that shows that classified sites (mainly craigslist), have doubled in usage between 2005-2009. According to the Pew research, half of the online audience has visited a classified site. On any given day about 10% of the online audience visits a classified site.
This graph shows the dramatic growth in classified usage in the last four years:
Over that timeframe, checkout what happened to the newspaper classified business.
Newspaper classifieds peaked in the late 90's and then they got hit with eBay. Ultimately they recovered – mostly by focusing on the non 'for-sale' classifieds that eBay was chewing away at such as jobs, vehicles, real estate and personals. You can see in the chart that they started to recover by around 2005. Then **WHAM** look at that drop by half from $19b to $9.9b.
What's the impact on eBay?
eBay doesn't break out transactions by seller-type – individual, small business, large-business, etc. so there's no way to know how many of the what I call FSBO (For Sale By Owner) types of sellers and their corresponding GMV have left eBay.
Thinking through some back of the napkin math, if there are 40m unique visitors to craigslist, let's assume half of them are there to buy products and the other half are there for non-product oriented categories.
20m buyers/month at a 10% conversion rate and a $100 ASP yields $2.4b/yr. The ASP on craigslist could be considerably higher if there is a larger % of car sales.
I'd say that a big chunk of that – 80% or so is straight out of eBay's GMV pie or approx $2b/yr. At their $60b/yr GMV run-rate that would be about a 3.5-7% headwind depending on the ASP. If amazon is in the $4b range, you can attribute eBay's 10% y/y decline path in a pretty clear way.
eBay is in a tough spot – Amazon is eating away at selection from the top-end – large and SMB retailers. Craigslist is pulling selection from individuals and the Local element. Buyers follow selection. It will be interesting to see how eBay navigates this strategic dilemm over the next year or so and if they can carve out a spot in the middle or do they need to more aggressively take on Amazon, craigslist, or both?
SeekingAlpha disclosure – I am long Amazon and Google. eBay is a strategic investor in ChannelAdvisor.
May 30th, 2009
There's more changing in the world of Comparison Shopping Engines (CSEs for short) this year than I can remember since back to the 99/00 timeframe.
The short-list:
- Amazon Product Ads are doing really well and have come out of nowhere to be a top CSE for many of our retailers. We have more details over at sister-site Amazon Strategies.
- Biztrate (shopzilla's sister site) – has an entire new UI (details at siter-site CSE Strategies) that highlights coupons.
- Shopping.com has announced tons of new things – tiered pricing, a new feed specification and more. I bet coupons are coming (in the feed spec).
- Microsoft/MSN/Live - MSFT has no fewer than 3-4 CSEs now and they seem to be combining them into one platform.
- PriceGrabber - Coupons and some AOL changes coming
- AOL - Rolling out their own (used to be Pricegrabber partnership) CSE
- NextTag - lots of changes similar to above
- Become.com – actually increasing rates (!?)
- Smarter - feature store and logo opportunities
We have a large team of business folks and engineers at ChannelAdvisor staying on top of these changes from a product perspective and they also have put the details into a white paper that you can download for free here.
May 30th, 2009
eBay Strategies readers, two up-coming events to notify you of:
- Tomorrow (5/20@2pm ET) – Piper Jaffery is doing a call where we'll be going over the new Amazon offering – ProductAds. Details @ the Amazon Strategies Blog.
- June 3/4 in the ATL – I'm going to be speaking at ECMTA/PESA's annual confab in Atlanta on June 4th. At 10am, I'm giving a 'state of e-commerce' presentation and then in the afternoon we're doing something that should be really fun – Mad Ecommerce. This will be a riff on CNBC's Jim Cramer – Mad Money show. Welcome to Cramerica! There's going to be a wicked-cool social element as well..
May 30th, 2009
We’re excited to launch a new sister blog to eBay Strategies called…. Amazon Strategies!
The same style of coverage targeted towards serious sellers on the eBay platform is now coming your way with an intense focus on all things ‘selling on Amazon’.
So to recap the various areas you can read ChannelAdvisor’s thoughts on ecommerce channels:
- eBay Strategies – News, analysis and strategies for optimizing your sales on eBay.
- Amazon Strategies – Our newest blog, focused on advanced amazon strategies for ProMerchant, ProductAds, FBA, CBA, etc.
- CSE Strategies – Everything related to Comparison Shopping Engines. There’s more coming in 2009 for CSEs than any time I’ve seen in the last year – stay tuned here.
- SearchMarketing.com – We have a team of paid-search geniuses at ChannelAdvisor that spend day and night optimizing search marketing campaigns for hundreds of top retailers.
- Blog.channeladvisor.com – Product-related thoughts from some of our top engineers, product managers and services folks at ChannelAdvisor.
- Strategy and Support Center - For our customers, we provide even more in-depth strategy and channel details in the SSC (new beta is out check it out!)
Since Amazon Strategies is brand new and I suspect many of the eBay Strategy readers will e interested (but not all) in what we’re covering over there, we’ll mention bigger posts here for the next month or so to make sure everyone has a chance to add that feed to their favorite reader, email, etc. We’re also thinking of setting up twitter accounts where we can fire out the quick/short things that go on with these channels. Let me know your thoughts on that as well as our various blogs in comments.
Oh yeah – almost forgot – we’re kicking off Amazon Strategies with a post that is intented to answer the FAQ we keep getting: How big is Amazon Prime? You can go direct to that post here.
May 30th, 2009
I'm off to a meeting, but very briefly – the first social auction had some great feedback and action. Thanks to 'fluffythewondercat' for the winning $100 bid – I'll be in touch for an addr for the Koala Webkinz, etc.
You can view the item here. http://snipr.com/socialauction
You can view the bids here http://snipr.com/hhedj. (powered by google spreadsheet)
I have some ideas on what to do next with the experiment, stay tuned!
May 30th, 2009
Yesterday about this time, I launched the first Twitter-powered online auction using twitter+google spreadsheets+google forms+this blog. The fun thing is I didn't have to write any code to do the experiment and I put it together literally over a couple of hours while watching TV.
You can view the item here. http://snipr.com/socialauction
You can view the bids here http://snipr.com/hhedj. (powered by google spreadsheet)
You can bid here (powered by google forms) http://snipr.com/hhed2
Day 1 update…2k visitors and converting to a charity auction!
I was really surprised that bidding for the Koala Webkinz reached the $29 mark in the first day. This is only one datapoint I realize and folks are experimenting, but I'm encouraged by this first datapoint. Thanks to everyone that participated directly via bidding or re-tweeting.
The intent of the experiment was to learn more about the intersection of twitter+auctions, not to make a profite selling Webkinz, so I wanted to announce today that all proceeds of the sale of the webkinz will go to the Lustgarten foundation who is 100% researching a cure for Pancreatic cancer. I have a good friend plus an aquantance that have been diagnosed recently and many folks are familiar with Randy Pausch's plight with the disease via his famous Last Lecture video and book.
Checking the blog and google analytics, a little over 2000 unique visitors have seen the auction since I launched it. I looked at our eBay data and the average visitors to an auction in our system (not fp) is around 45 – so again an interesting first datapoint.
Thoughts on the experiment
So my original thesis was that Twitter's ability to communicate openly in a synchronous+asynchronous fashion plus the social/community 'graph' aspects would make it a good 'platform' for auctions. I think that is really playing out even more than I thought.
One nice thing about the google spreadsheet+forms being relative free form is that people were able to jump bid (e.g. bid more than the .50 min increment). However, the free form (e.g. you can't force or use a formula for a value) has downsides:
- People can put anything in the fields – it isn't constrained to text/$/etc. One joker kept putting in some sports-related thing instead of a bid!
- The spreadsheet is a weird way to look at bidders to me – I guess I'm used to looking at them in reverse chrono order vs. chrono
- Of course there's no verification system or anything so I'm manually watching for random behavior around that and backing out those bids.
Of course I'm manually having to do some tweets to underbidders and what-not as the auction progresses so that should be automated as well.
I'm curious to think if sellers out there think twitter could be an auction platform or if I'm barking up the wrong tree. Let me know in comments what you think.
May 30th, 2009
eBay Strategy readers – I'm excited to introduce a guest post from ChannelAdvisor's COO, David Spitz. A lot of readers think I'm pretty analytical – well you haven't met David! David penned this piece on a general ecommerce trend and I've had lots of discussions with eBay folks around the 'free shipping/low prices/coupon' topic and thought you would be interested in his insights. Now without further ado heeeeeerrreeeeeee's Dave....-Scot
We spend a lot of time at ChannelAdvisor thinking about e-commerce trends so we can make sure we’re helping our customers stay ahead of the curve. Today, our friends over at Google announced an embeddable Google Trends gadget, which reminded me of an interesting query I ran the other day. We hear a lot about the pros and cons of free shipping, and obviously Amazon Prime has been a great growth driver for Amazon over the past couple of years. But we also know that, especially in this economic environment, more and more people are turning to e-commerce as a way to get the best possible price and save money. So I wondered: what do people spend more time looking for when shopping online – free shipping, or the lowest price?
Turns out, as you can see below, people search for “free shipping” about five times as often as they search for “lowest price.” Even more interesting, that trend has accelerated significantly in the past couple of years, and is particularly pronounced during the holiday shopping season. I’m betting that Amazon has really raised the bar here and set the expectation in a lot of peoples’ minds that shipping can and should be free.
Then, thinking about my own shopping habits, I wondered how many other people look for coupon codes before completing a purchase. At our Catalyst conference last week, one of the participants on our consumer panel talked about how she would always stop half-way through the checkout process when making a purchase to open up another browser and search for an applicable coupon code, all to try and get a last-second discount during checkout.
She and I have a lot of company: as you can see from the trend chart below, the search frequency for “coupon code” has accelerated faster than “free shipping”, and eyeballing the graph is now a good 40-50% higher.
So, what should you do? Well, as always, keep your prices low and competitive, but if you don’t have free shipping and promotion programs, you should implement them now (especially by Q4) and aggressively promote them on your site and on all your marketing channels.
May 30th, 2009
I was chatting with some entrepreneurs lately that are active in the social space and we got to brainstorming some concepts about the intersection of ecommerce and social media.
It occured to me that auctions+twitter+social are a great possible marriage. Think back to when auctions were fun on eBay. You could watch what others were bidding on, things started at low prices and had bid-up, out-bid notifications mattered and most importantly you got some great deals. You also didn't have to worry about spam, phishing, etc.
Now imagine you could get all of that good old auction excitement back, but through the twitter platform. You would be alerted of new items with tweets and then follow any outbids. you could also see what other twitter'ers were bidding on and decide if you want to lurk or jump into the fray.
This was rolling around in the back of my brain and then I remembered an article where someone had done a quick and dirty auction on craigslist using google forms+spreadsheet.
Thus I thought it would be fun to test this concept out in a very rudimentary way using those basic free tools. So here is what I believe to be the first social auction!
The world's first social auction – running for 3 days -ends at noon on 5/9 ET
Picture: (click for larger version)
Description:
Up for social-auction starting at $1 with $.50 increments is this adorable Webkinz Koala bear. It has been in a smoke free home since purchased about a year ago and is in mint condition. The webkinz-world code is intact and has never been activated. This one of the larger webkinz, not the inferior 'lil kinz.
Shipping+handling:
I'll do free shipping on this puppy, er.. koala
How to bid:
You can check the current bid at this link. http://snipr.com/hhedj
You can submit a bid at this link. http://snipr.com/hhed2
How to pay:
Let's do paypal! I'll send you a manual request for money after the auction ends.
How to help the experiment:
In the interest of helping with the experiment if you could use the hashtag #socialauction and help get the word out on your network that would be great:
- Twitter - retweeet – e.g. "RT @scotwingo – first social auction is here - http://snipr.com/socialauction - webkinz panda #socialauction"
- Facebook - change your status for a second to be this: "First social auction – learn more here: http://snipr.com/socialauction. Or you can post a link (go to facebook homepage and in the upper left you'll see a 'links' area – this is the link to post:
- myspace, plaxo, linkedin, etc. – You can change your status or post a link that gets populated to friends – the link should be http://snipr.com/socialauction.
I'll report back with the results in 3 days on how many folks this reaches and of course how the auction concludes. I won't be accepting bids post noon on 5/9 so bid early and often!
