eBay: Where's the Fun?

The Wall Street Journal today reports that eBay (EBAY) is again changing its fee structure in a bid to raise customer traffic and increase profits.  The article notes:

"Online auctioneer eBay Inc. said it will lower the fees it charges for products listed for sale at a fixed price, in a bid to become more competitive with rival Web sites such as Amazon. com Inc. Ebay, which sparked seller protests earlier this year when it raised fees for auction listings, said it will reduce the fee for fixed-price listings to 35 cents, down from as much as $4, and increase the duration of a listing to 30 days from seven. The company will simultaneously raise the commission it charges once the products are sold -- in effect taking on more responsibility to drive buyers to the site. Ebay declined to provide details of the commission increase. Both changes are effective Sept. 14. The company is playing catch-up to other Web sites that have focused on fixed-price sales."

What's interesting is not just the fee change, but the fact that the Journal calls Amazon a "rival."    It's correct, of course, but certainly not what eBay set out to be from the start.  It set out to be the un-retailer.   A giant garage sale where bargain hungry buyers and eager sellers could find common ground and make a deal.   And deals were to be had.   It's what first drove me to eBay back in November 1998 when I made my first purchase on the site (100% positive feedback on 32 transactions, I'm happy to say).   Even with the painful dialup speeds on Prodigy it was fun to browse eBay, to discover a deal on something you didn't even realize you wanted.

The point: it was fun.   Rarely did I go on the site to find something I needed.  It was to instead find something I wanted.   The same fun that drives millions of Americans to the newly-verbed activity of "antiquing."  The thrill of the bargain hunt.    And the deals were usually between individual sellers and buyers.   True or not, it feels like you are getting a better deal when buying from a household rather than a retailer on a used good.    Searches now on items like "iPods" and "bikes" shows that many sellers appear to be businesses, not individuals.   My quick, unccientific scan of "buy it now" prices on eBay and the same items on Amazon.com returned similar prices.

I use Amazon, but use it differently.   I use it to shop for goods I already know I want.   It's a comparison shopping site for me.    I don't use it to browse.   Find, click, purchase, ship.   Rarely am I on the website for more than 5 minutes.  This is great for sellers, but not as good for the 'stickiness' of the website and thus advertising rates.

This is why hearing eBay described as a rival to Amazon is likely not what eBay investors want to hear.   Amazon has been in the fixed-price game for a long time and does it well.   It was an early arrival and took advantage of the slow internet buildouts of retailers like Wal-Mart.   But now Wal-Mart, Target and others are fully ensconced on the internet.  And Amazon is no doubt up for a long fight with these powerful stores for web shoppers.   Does eBay really want to get further into that mix by encouraging the fixed-price side of its business?

My advice is for eBay to return to its roots.    Take a lesson from Craigslist, which has really become the "new eBay."   It's actually fun to search the graphics-deficient Craigslist for bargains.    eBay needs to become the "next craigslist."   Find ways to encourage individual sellers and buyers back to the site.   Make it more of the garage-sale-on-the-web it used to be.   It will make buyers feel like they are getting better deals and not simply buying from retailers such as Amazon and Wal-Mart.   Keeping buyers browsing will also raise eyeball time on the site and drive ad rates.

So two notes to eBay:

1) Wal-Mart, Target, Sears and Amazon don't have much interest in the auction market.   Their sizeable insfrastructure costs require more transaction volume than mere auctions can provide.   Stick to the market where you are already the leader.

2) Make it fun again.   When I search for "skis" and most of the 12,534 matches appear to come from full-scale web retailers instead of potentially bargain generating individual sellers, it's not worth it.  If I'm going to pay full price, I'd rather go to the store.