June 04, 2010
eBay's John Donahoe on the Future of eCommerce & BTW, He Loves the iPadeBay's John Donahoe was on the D Conference (D: All Things Digital) stage this past week....after the talk, a common thing I heard over and over again from attendees was that it has really become a site for sellers not buyers, or rather one that favors sellers over buyers.
In addition to learning what their core focus areas are today and where they're heading in the future (for example - who knew that fashion/retail/accessories was so big on eBay?), they spent a lot of time discussing the role of Paypal.
Walt Mossberg asks "why do you need them?" It was as if Donahoe was ready to pounce on the question, almost as if Paypal was his wife and another man had just attacked her. (at least that's how it seemed to me).
Most people I know avoid Paypal if they have an option for a number of reasons, including phishing. But, Donahoe says, "Phishing was a big issue for eBay and Paypal five years ago and we were the two sites that did a lot of money exchange at the time. We've come a long way and fraud is down 80% over the past five years. Anytime anyone reports something, we take the site down in 12 hours." When asked who their main competitor was today, John responds with Amazon, Walmart and Etsy in that order. He says, "We're an eCommerce site - that's WHAT we are."
He reminds that eCommerce is only 5% of all retail. Walmart is the largest discount retailer in the world and they're unstoppable. They have about 7% of online retail. Costco and Target compete in the same niche and both successfully. We're at the beginning. Each of us needs to focus on what we're all really good at."
In the future, more and more devices will be part of our online purchasing experience. He gives examples, i.e., "you can imagine someone walking into a store using a red laser from a mobile device and then buying it online from inside the store. People will use their iPads for browsing so they can look at a product's specs in details before they buy." Then he adds, "if you want to see the best eBay experience, go to our iPad app."
I thought - egads, if one more speaker touts how much they're in love with their iPad, I'm going to think that Jobs bribed everyone before they set foot on the stage - it's a beautiful device, but c'mon already.
"What makes the iPad different?" asks Walt. "Let's look at the core eBay website experience on a scale of 1 to 10," says John. "We've gone from a 2 to a 4 and we should be proud of the improvements we've made, but we need to make this a more compelling experience for those 90 million users around the world. The iPad has forced us to start over. You'll start to see vertical market apps, such as a fashion app. We can now serve just a segment of users in the way they want to shop. We're not trying to do it all from one browser."
On market segments, John says, "eBay is the largest seller of fashion, clothes and accessories online worldwide by far. eBay has a really loyal following; we're driving more tailored vertical market shopping online. Fashion is really high (clothing, shoes and accessories) which we call the Fashion Vault."
Think image search, i.e, I'm looking for a blue shirt and I want to see more blue shirts. You shop for clothing differently than you shop for a Blackberry.
Walt moves to Stubhub; here, there's a lot of controversy around this as a model where tickets can be resold, how they're resold and priced.
Says John in response, "Stubhub is a simply a marketplace. What Stubhub has done that scalpers have never done is make it totally transparent. Stubhub guarantees every purchase - and they provide complete transparency. At the end of the day, it should be the fan's choice to resell their ticket if they want to."
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Really? eBay is a site that favors sellers over buyers?
eBay has become so hostile to the small seller that if I check my feedback the vast majority of honest sellers with whom I had very satisfactory transactions over a ten year period are inactive. I left eBay in 2008 because the writing was on the wall, I was marginally profitable, eBay/PayPal's take was already greater than mine and the cost of compliance with eBay's constant changes was unsustainable.
In the real word, not fantasy land, eBay comes down in favor of the buyer 99% of the time. Despite any evidence to the contrary, for example USPS delivery confirmation, if a buyer claims item not received seller is SOL.
This only affects genuine sellers. eBay is still full of crooks and scammers. When their ID becomes too soiled to be viable they simply get a new one. Another technique is to wait until the old one becomes clean enough to use again (thanks to the rolling feedback policy instituted by the boy wonder Donahoe) and revive it.
The large sellers known as Diamond Sellers, who pay no insertion fees and negotiated final value fees, are pretty much untouchable. eBay does not enforce compliance on them in any meaningful way.
Insight into the (not so small) seller viewpoint can be read on this latest post from The Brews News blog http://tinyurl.com/28vh68g or almost anywhere on my blog (small seller) Red Ink Diary.
Look at this latest change to PayPal which affects any internet seller who allows a UK buyer to purchase from their website. http://tinyurl.com/3xselmg
You should know that eBay does not have any means of telling if an item is counterfeit or not. They do not employ authenticators. In the USA items go to a liquidator who then resells them in bulk lots, they are known to appear back on eBay, again.
eBay is largely a site to avoid these days, but not because they side with the sellers.
Posted by: Henrietta of Red Ink Diary | Jun 5, 2010 8:30:18 AM
Great post Henrietta! I might add that Ebay is probably the only site where sellers can lose their money, their item AND still pay fees! When is the government or at least the California Attorney General are going to look at these dealings? Their "ugly daughter" Paypal institutes 21 to 180 day holds on sellers' money and not just on new sellers. Sellers with established reputations on Ebay have also been snagged in this net - it seems to be totally random. There is now a class action lawsuit filed against Ebay/Paypal on may 12, 2010 regarding this issue....and its long overdue! When Donahoe speaks one needs to read between the lines. He has not been truthful about Ebay or Paypal and just gushes at how "successful" they are. Nobody wants to hear about the largest this or that....or the most listings..... SALES and revenue is what counts and those are declining. Visa and Mastercard are not long behind paypal in putting out their own version of Paypal - then what happens? Without Paypal to brag about what I Donahoe going to hide behind? He's taken a much loved, workable and unique business model and utterly destroyed it. Now, Ebay is just one drop in the ever growing sea of retailers and they look shabby and disorganized against their competition! Good going Donahoe...you need to win a medal for what you've done - I just can't figure out what kind of a medal. I suggest a large one made of elephant dung!
Posted by: Patricia013 | Jun 5, 2010 10:53:07 AM
Did someone mention eBay/PayPal?
You can tell that Donahoe is in fact a lobotomized chimpanzee by the way he waves his arms about.
eBay SEC Form 10-K, 31 December 2009
“Negative publicity and user sentiment generated as a result of fraudulent or deceptive conduct by users of our Marketplaces and Payments services could damage our reputation, reduce our ability to attract new users or retain our current users, and diminish the value of our brand names. We believe that negative user experiences are one of the primary reasons users stop using our services.”
What? “Fraudulent or deceptive conduct by USERS.” No mention of eBay’s own deliberate criminal facilitation of shill bidding fraud by unscrupulous sellers on its buyers!
Regardless, they’ve got one bit right, “negative user experiences” are THE primary reason users—both buyers and sellers—stop using eBay’s and PayPal’s services. And the great majority of those “negative user experiences” are caused directly or indirectly by eBay itself due to the devious mechanics of the auction process on the eBay Marketplace and its ugly daughter, PayPal. Shill bidding fraud has always been a serious problem on the eBay marketplace but since “Devious” Donahoe has taken the helm, even more, outrageous, criminal fraud-facilitating mechanisms have been introduced to the auction process.
The Banks, via their partners Visa and Mastercard, prepare to put PayPal back into its eBay coffin box
Draft Media Release—Confidential
It is with very great sadness that John Donahoe (aka Peter Principle—among many other things), eBay’s Chief Headless Turkey, announced the probable demise of eBay’s most ugly daughter, PayPal. PayPal is about to be stricken by particularly virulent strains of Visa+CyberSource and the Mastercard open platform, along with insurmountable financial institutions complications and much PayPal user/merchant dissatisfaction. PayPal’s health may therefore be expected to deteriorate and, if ultimately not completely incapacitated, will most likely be eventually confined to what little there is by then left of the Donahoe-devastated eBay Marketplaces. There is no cure for this condition, and the “eBafia Don” is particularly saddened by the inevitable presumption that it is unlikely that PayPal will be able to continue to underpin eBay’s bottom line in the future.
A detailed examination of and prognosis for PayPal (including the “PayPal Nightmare Tour”) at
PayPal: Dead Man Walking
And, for anyone seriously interested in the utter stupidity and deviousness of eBay’s executive management generally, and in particular eBay’s demonstrable and deliberate criminal facilitation of the rampant shill bidding fraud being perpetrated, by a great many unscrupulous professional sellers, on buyers, on nominal-start auctions, an introduction thereto (along with some PayPal horror stories thrown in for good measure) can be found at
eBay: Dead Man Walking
A practical observation on the risks of stupidity was made by the German General Kurt von Hammerstein-Equord in “Truppenführung”, 1933: “I divide my officers into four classes; the clever, the lazy, the industrious, and the stupid. Each officer possesses at least two of these qualities. Those who are clever and industrious are fitted for the highest staff appointments. Use can be made of those who are stupid and lazy. The man who is clever and lazy however is for the very highest command; he has the temperament and nerves to deal with all situations. But whoever is stupid and industrious is a menace and must be removed immediately!”
Clearly, the Stanford-trained and Bain & Co-matured sociopath, “Noise” Donahoe, and his gaggle of gobbling, apparently sycophantic, fellow headless turkeys at eBay fall into this last group, and should be “removed immediately”, before these incompetent fools can complete the total destruction of the eBay Marketplace—although I suspect that by now the patient has been well and truly mortally wounded by this lobotomized head quack’s clearly stupid and criminal policies and totally incompetent case management.
Donahoe & Gaggle: Dead Men Walking
Posted by: Philip Cohen | Jun 6, 2010 6:04:08 AM
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