There was an article over on My Blog Uptopia a few days ago about the Buy.com/eBay partnership.
If you are just tuning in, let’s recap. Buy.com has been selling on eBay for a few months now. While big companies selling on eBay is noting new (I know I drooled over the parts of Mr. Toad’s Wild Ride that Disney was auctioning off a few years ago), sellers were upset over what appeared to be special treatment of Buy.com. Namely, Buy.com didn’t seem to have to keep to the same selling standards as regular sellers and wasn’t paying the same fees. In the interest of honesty, though I have heard these complaints many time, I have never seen evidence of this so this may just be a rumor.
But the main problem is that, if Buy.com is getting special favors, then this goes against eBay Founder Pierre Omidyar’s “level playing field” idea on which eBay was built. His vision was that no one got any special favors, no matter how big a retailer they were, so everyone had equal chance to make a sale.
Now, part of what got everyone worked up about this is that Buy.com got their special deal and, only after sellers cried foul, did eBay introduce a Diamond Level PowerSeller which, essentially, is a level of PS that does get special treatment (negotiable fees, etc). They also announced that 500 other retailers would be joining Buy.com soon (we assume the JetBlue partnership falls under this Diamond umbrella).
So sellers are upset that the big companies are getting to swoop into eBay and sell their stuff alongside the little guys and are getting special treatment to boot. Titanium PowerSeller ColderICE put this best on Twitter last week. He said (and I am paraphrasing), “It’s not just that Walmart is moving into town to compete with the small businesses. It’s that Walmart is getting the land for free and getting a tax break.” I think this really sums up how most people feel about this.
To recap us back to the present, some disgruntled sellers have written up a letter that they want other sellers to send to Buy.com calling them a bully and threatening a boycott. The letter is long so I am going to just link to it on Randy’s blog.
Now here is where I diverge from popular opinion and tick people off. That letter is childish, unprofessional and downright embarrassing. If I may unleash a cliche on you, if you cannot stand the heat, get out of the eBay. It is immature sellers like this that give the rest of us who act like professionals a bad name.
This is the equivalent of the local pizza shop owner going walking into a Pizza Hut and yelling at the kids behind the counter, “You guys are mean old bullies because you are competing with my business.” You can’t just throw a tantrum and expect your competition to fold up because they made you sad. Adjust your business to meet the challenges thrown at it!
Buy.com has existed for many years before they started selling on eBay. It’s certainly cheaper for them to sell on their own site than it is for them to sell on eBay and, on most items, they have raised their prices on eBay to reflect this. The competition from them and their items has always been there, more so if they could sell things for less on their site. If you consider your only competition to be people selling on the exact same platform as you, there is a fundamental flaw in how you run your business. It makes no difference if Buy.com is beating your price on an item on their own site or on eBay. If you have run your business well, your buyers will still choose your item because they prefer the customer experience that you have created. Everyone who is selling the same items as you is your competition regardless of if they are selling on the same site as you or not.
Secondly, Buy.com and other partnerships like it are what could save eBay. They bring in money, they bring in buyers and, most importantly, they bring in trust. I would much prefer an eBay newbie’s first experience was with a well oiled machine like Buy.com than a 2 feedback scammer selling boxes with an “x” on them and calling it an X-Box. And every transaction that a buyer completes on eBay that goes well is another buyer who is likely to come back and buy from someone else. Also, the more products they have listed, the more chance buyers will see your items while looking at theirs. It’s common sense!
Since they have appeared on the scene, I have actually purchased from Buy.com several times. It wasn’t intentional, it was just a matter of, they had what I needed and it was the best deal. They don’t always have the best price and there are quite a few eBay sellers that have them beat on many items so I make my decision case by case. But as a buyer, I have no complaints with them. There is more merchandise on eBay and, as a buyer, I don’t really care why it’s there as long as its there.
As for the special treatment, I agree that this Diamond PowerSeller was handled poorly in how it was rolled out. However, since they have made this a PowerSeller level, it means that it is attainable by anyone who reaches that sale point. I would prefer for them to publish the rates so everything was more transparent, sure, but I maintain that special treatment is irrelevant.
No matter how many benefits eBay is giving them, it still costs more for Buy.com to sell on eBay and use PayPal. This means that they are having to take less of a profit margin to provide the exact same competition that they were providing before on their own website. No matter how many breaks they are getting, they are still paying eBay for the privileged of having their items on the site which, when you already have a huge retail site of your own, cuts into your bottom line.
I won’t even get into the fact that Buy.com has a much higher cost of overhead than most eBay sellers so that sellers can probably beat them on the cost of most items.
I don’t buy from Staples because they are the cheapest, I buy from
them because every time anything has ever gone wrong, they have fixed
it immediately. I buy from them because, for a little extra, I get
peace of mind in my purchase. The same applies everywhere. If you as a
small company can provide a better customer service experience, buyers
will still come to you no matter how much competition there is.
So, essentially, Buy.com has to raise their prices to be able to sell on eBay and eBay sellers are complaining because, while you were cool with their lower prices competing with yours on their own website, their higher prices are appearing on eBay upset you because, what, they are too close? Mommy, he’s touching me? He’s a bully!
Give me a break. This is not an after school soccer game. This is a business. There are no fouls, no time outs, no penalties for paying rough. The problem is that some sellers are still running their business as if it was an after school soccer game.
Of course the bigger fish are going to make deals. Of course you are going to have competition. If the competition is too much, you need to rethink your business or close up shop, that is how business works. If your business crumples under the first sign of competition, you shouldn’t be wasting your time on a letter writing complain, you should be reworking your business model so it is profitable again.
I cannot imagine that Buy.com would take this letter campaign seriously but, as a buyer and seller both, I am hoping they don’t.