Whilst I was checking my email at 6am this morning, I opened an EMail from John Thornhill of PlanetSMS urging me to read his blog. What I read initially made me gasp in horror and had me reaching for my Strategic Business Plan for a review and rewrite. Then I read on and then read the actual release by EBay.
In short, EBay have changed their policy so that anything listed in the Everything Else -> Information Product category can now only be advertised by using the Classified Ad format.
WHY? The EBay stated reason is fairly clear – EBay believe that the sale of digital downloadable products creates the potential for Feedback Manipulation (both real and perceived).
Let’s examine that a little a further. I know that when I wanted to use EBay, I needed to have a minimum Feedback rating (you know, it was so long ago I don’t remember why I needed it and how much I needed, I’m sure one of my readers can tell us!). I did my research and found that if I offered up a digital product at an extremely low price, I could easily make the number of sales I needed and get my feedback rating to where I needed it to be. Could I be manipulating my Feedback score?
The other thing to be recognised here is that EBay also realise that many Information Products suppliers use EBay sales as a lead generation method.
Let’s have a look at a few things. I was reading a PC Authority the other day (yes,I do actually read computer mags!) and the lead article was about EBay- EBay Friend or Foe. This article, which was quite lengthy, states that the Auction revenue, EBays Lifeblood, now only comprises 60% of its revenue instead of the 80% it held a few years ago. The drop in Auction revenue is attributed to the flourishing EBay stores. The article goes on to state that the ability to buy from an EBay store at a fixed price, instead of bidding leaves customers with a feeling that there are no more bargains to be had.
The article allows notes that changes in the feedback system could leave the impression that the customer is always rights. As a result Sellers appear to be unhappy and buyers aren’t coming back as frequently as they were.
So why is that relevant. Simply, if EBay wants to survive and flourish again, it must do something with its business model. It needs to review its entire operation, ditch what doesn’t work and use what does.
When EBay started business however many years ago, one of the strongest selling points was the feedback system and the ability for purchasers and sellers to feel that they had some protection in the transactions. If the feedback system is manipulated, then one of the main underpinning strategies for the EBay business comes tumbling down.
Personally, I don’t have a feeling one way or another about EBay removing digital products. It will affect me somewhat, but I will review my market strategy and work out what to do. One suggestion is to produce the digital products on a CD or DVD and deliver them. Neat, I’ll consider it.
What does have me somewhat miffed though is the three or four emails I have received since Johns email this morning that use the PANIC techniques trying to flog something else to me. Yes, it’s a big change, yes it will affect some peoples business in a big way and yes, the notice is short. However, if the change is going to cause that much of a hole in your business, you should be thinking about it strategically (quickly but strategically) and making informed decisions. Certainly not panicking.
What am I interested in is just how many businesses are affected by this change and the magnitude of the change – any comments?
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