Has Donahoe Succeeded in Remaking eBay?
An article written by Douglas MacMillan in CRM Daily, titled “eBay’s Last Minute Delivery Push” published December 24th 2009 caught my attention. CRM Daily is an e-publication delivering “Customer Relationship Management news for Pros”.
Here is the ‘hook’:
“eBay’s expansion into selling new products has brought in more customers who expect cheap, fast delivery; flexible return policies; and attentive customer support. Those have been tough demands for the company to achieve, and could be affecting the site’s popularity. In November, eBay’s online visitors dropped by eight percent.”
In my opinion eBay could use some CRM tips because their philosophy under current CEO John Donahoe is to channel Rhett Butler in Gone With The Wind; “Frankly my dear, I don’t give a damn” as seasoned sellers look for the exits. eBay is clueless and indifferent (def. #1) when it comes to Customer Relationship Management, but I digress.
Off Target
The implied frame of reference for the article is that eBay is the seller, not “only a venue” for sales by independent retailers. It posits (def.#2) buyers as eBay’s customers, and sellers as merely eBay’s suppliers. This causes a dilemma (def.#2) in that any eBay CRM program targeting the consumer will not target the customer; the one who pays fees to eBay. A sampling of key phrases that support my contention are:
- order-fulfillment problems bedeviling eBay
- eBay doesn’t have as tight a control of its supply chain as rivals
- eBay’s expansion into selling new products
Another quote in the article would appear to indicate that the perception of eBay as retailer is becoming much more widespread.
“They started as an auction site, but they are now seen by most people as a retailer,” says Larry Freed, CEO of market researcher ForeSee Results.
The Heart of the Issue
Mr MacMillan compares eBay’s performance as retailer with Amazon and to a lesser degree with WalMart. There are deep flaws in the comparison.
Unlike Amazon which started as a retailer before permitting third-party merchants (3P) on the site, eBay has never had product to sell, never sourced, listed, picked, packed or shipped. eBay is not a retailer, without 3Ps eBay has no product to sell.
Like eBay, Amazon claims the transaction, in other words the buyer is Amazon’s. A major difference between the platforms is that Amazon takes responsibility for the transaction, offering an A - Z guarantee to the buyer, while verifying the buyer and processing payment for the seller. All Amazon buyers are verified, there is no sale without payment, the Non Paying Buyer (NPB) does not exist.
eBay disavows any responsibility and has maintained for years that it is only a venue and is therefore not responsible for the items bought or sold on its site. Liability is passed to the seller and eBay’s role is limited to collecting fees from them at every opportunity, including for unconsummated transactions, the ones in which sellers do not get paid.
Amazon clearly delineates the expectations and obligations of a partnership, a relationship that is characterized by mutual cooperation, responsibility and benefit. eBay prefers a punishment based authoritarian and adversarial relationship with 3Ps, clearly shown by secret search algorithms and an unnecessarily complex fee to listing structure which intentionally makes it very difficult for sellers to calculate costs and predict margins.
Finally, Amazon spells out realistic time frame expectations for buyers to receive their purchases. A seller who can deliver faster has a happy customer and so does Amazon. eBay doesn’t have a clue and the result is everyone is mad at each other.
Crystal Ball Department
Salute to a master, Randy Smythe said it in 2007. So far, I would say he called it exactly right.
Has Donahoe succeeded in remaking eBay?
What is the new eBay?
Y’all come back!
