Notes from the eBay Top Seller Summit

From Kevin “Sleep is for the Uninspired” Harmon

InflatableMadness.com

Hi guys,

I just returned from the Top Seller Summit in San Francisco. This is eBay’s second annual e-comm conference – they invite the top 200 or so sellers on eBay for a 2 day conference.

It’s a good event to attend because most of eBays top brass are there and mingling about, so I was able to have many quality conversations with the people at eBay who influence decision and direction.

Here’s my main takeaways from the conference:

1. eBay has realized that there are some forces working against them now. They are beginning to acknowledge the level of fraud and to seriously study the growing attrition of buyers. The question is: Can eBay right the ship in time?

2. eBay will be working hard on improving the buying experience – they are rolling out a more detailed feedback 2.0 and working on improvements to the user interface.

3. eBay wants to make eBay fun again. ebay matchups is a good example of this.

I have always said that no matter how I feel about what eBay does as a company, I have never met an eBay employee who I didn’t like – to a person they are smart and friendly. The conference was a nice jug of eBay coolade that is appreciated by us sellers.

Now, if the free eBay bag I received just didn’t cost $500,000, we’d be in business.

Ha!

Kevin

StartupNation

EEF: Bill Cobb keynote, post 4 (FEEDBACK 2.0!!)

Feedback is foundation of eBay. Love it or hate it, it has enabled eBay’s success.

Explained retaliatory negs. Feedback is mostly right, but going to refine it to better meet needs of online shopper. For 2yrs been working on “Feedback 2.0″. Lots of community feedback, etc.

Late next month (Feb), outside US are going to phase in FEEDBACK 2.0:

• Granularity/specificity – four new sub-categories.
  • Item description
  • Communication
  • Shipping time
  • S+H terms
• Positive feedback % will be based on last couple of yrs activity
  • Old negatives/positives will archive
  • Users see most recent (couple years)
  • This comes out in Spring
  • Will be very careful in how this rolls out
  • Testing Intl first (UK/AU/IT) late Feb

Conclusion
2007 will bring major changes to the buyer side – because eBay has to. More competition, drive more buyers to sellers.

Thanks sellers for all they do. Loves working with entrepreneurial sellers. Thanks to sellers from all at eBay.

eBay Strategies

EEF: Bill Cobb keynote, post 3 (T+S)

Highlighted how important T+S is at eBay. Bad guys are getting smarter, Pierre’s vision is still solid, but the BASICALLY part is getting tougher.

Over 2000 employees in T+S fighting the battle vs. the bad guys. Due to this they are going to more actively protect buyers from fraud/bad experiences.

Safeguarding seller IDs for example (this stops fraudulent SCOs). So far fake SCOs are down 80-90%, may need to take additional steps to protect bidder IDs

Another way reducing bad buyer experience is adjusting the seller standards. Repeated information on excessive shipping, late item, INR, bad customer service – causes majority of bad user experiences on eBay.

Historically have allowed practically anyone to sell on eBay with few restrictions, going forward going to significantly raise the bar on who they allow to sell on eBay.

Not fair to the large % of good sellers that small % of bad sellers are driving away buyers.

Example: cross border trade restrictions they started in Q4.

Beginning this week, any new seller who wants to list in US/CA, must offer a safe payment method – paypal/CC.

In October, eliminated private feedback – used to suspend 60%+ of sellers with private feedback. Now they are transparent again.

In 07 there will be more details on how great sellers are advantaged and bad sellers are further restricted.

Counterfeiters – Bill highlighted the changes that have already been instituted here. They are closely monitoring the results, may do more here.

Last week announced doubling of coverage from Paypal protection program. ($1k-$2k on SNAD and INR, other transactions $200 for unqualified items – no processing fee). Buyers love this and sellers should too – makes a statement in confidence of the marketplace.

Shipping and Handling
Covered why it’s bad.

Made some progress in 06 with active enforcement – started in June. Cited cell phone category – S+H is down 25% in that category.

Need to be more proactive – developing some product based solutions – sort by total cost, (editorial note: ebay express does this and best match does too) going forward the approach is going to be to put the right incentives into the product and reduce reliance on manual enforcement. No silver bullet, short of regulating, but they are going to keep at it until contained.

eBay Strategies

EEF: Bill Cobb keynote, post 2 (fun!)

(Bill Cobb keynote continued – post 2)

2007 initiatives

Taking an aggressive approach at T+S issues (S+H/etc.) Reigniting the core auction business – eBay is the heritage and will always be at the center of the experience. Fixed price sellers – that’s less about pricing format and more about the entire site (so don’t worry).

Improving buyer consideration is job #1 at eBay. In 06 intro’d IT campaign and it has worked – bringing buyers to eBay. (showed 3 IT commercials – kids getting in door, dollhouse/robot, alarm clock).

Last month made some changes (covered previously here) to the management team at eBay – intro’d Philipp Justus (pronounced you-stus NOT Justice) – focused on core.

Hint: Introducing some new ‘fun’ ways to interact with eBay.

User interface discussion – eBay has done good job, but bar is raising. Historically put reliability on forefront (backend) and added complexity to front-end UI. This has introduced some buyer frustrations. In 2007 going to address the UI side.

Finding
For 2yrs they have been working on a better finding system. eBay Express has different category layout (Magellan). Smart system based on wisdom of crowds, where makes sense will be testing on eBay.com over several months, monitored closely.

Another advancement, is a new search results page – AJAXy with pop-ups when hovering and with feedback on results page (good results so far) Testing across small % of buyers in US/UK/DE.

Another change that is coming is FUN. In 2007, will reassert the concept of fun. eBay Match ups for example. Showed the Fruit cat helmet vs. Meg page.

eBay Strategies

eBay ecommerce forum – Bill Cobb Keynote

Following Meg Sloan’s talk on the eBay buyer, Bill Cobb took the stage after a good networking break. This is being webcast to be presented later today.

2006 recap

• Last year focused on ecommerce for first time – on and off eBay
• Announced eBay Express
  • Happy with results – 9/10 buyers said the experience met/exceeded expectations.
• EE on GMV trajectory faster than half.com and eBay Stores
  • Committed to nurturing and growing over time
• Unveiled new plan – SIS in core.
  • Led to unbalance
• Did first stab at controlling high S+H costs.
• 212m registered users (end of q306)
• Lumberton NJ – number one eBay community!
  • More ebay transactions than any other town in US in November
• Q4 – Shopping season was dominated by TMX/wii/ps3
  • This created ‘eBay’s finest hour’ – eBay loves these scenarios
  • T+S had to do a lot to make sure that all went off without a hitch

Looking forward: 2007

• eBay’s buyer traffic and conversion to sale is the big differentiator.
• Recapped the 4 segments Meg introduced
• eBay faces more competition than ever before
• Web 2.0 has changed the way people spend time online (youtube/wiki/myspace/etc.)
• eBay’s success has drawn in more bad guys.

eBay Strategies

ebay buyer – post3 (final for this session)

(Post 3 of the Meg Sloan talk)

Given this information, who is NOT a great target buyer for eBay?

• buyers that see online as last resort
• don’t like shopping
• want speed above all else

What kind of opportunity does focusing on these four segments leave?

• Majority of frequent shoppers
• Shopping online 160m times/month
• Buy 60m items/month
• They shop 2X more than other shoppers

(showed video of some of these segments from their on-site/in-home visits to buyers and comments)

One weird guy Chad that spends all day looking for typos to get a deal

The current eBay buyer experience (October 06 dataset referenced)

• eBay comes to mind first (good news)
  • 25% – first choice, 80% in the set of first brands to shop online
  • eBay’s preference is 10 points above the next best competitor
• The brand is unique and well loved (good news)
  • 70% – eBay is among my favorite shopping sites
  • 1.3 times more likely to be considered a favorite than other online shopping sites
  • Buyers give eBay high ratings on price, selection and entertainment
  • eBay’s brand dna (compared to goog/amzn) is shopping+entertainment+tech+inet.
• Buying on eBay comes with issues. (bad news)
• Some of them have significant implications (real bad news)

Why buyers love eBay?

• High ratings on price, selection and entertainment

Top buyer issues

• Entertainment/fun factor has worn off to some degree
  • Buyers that think eBay is fun bid 2x of those that don’t
• Shipping/deals
  • 2/4 segments are price driven – most sensitive to this
  • Most buyer attrition is due to ‘too high’ shipping
  • Total price matters! (could have told you that in 2004 )
  • Shipping costs kills word of mouth
• Based on buyer survey here are the top bad things:
  • Item was late
  • S+H too expensive
  • Not as described
  • Seller unresponsive
• Secondary issues:
  • Never received
  • Item was damaged
  • Poorly packaged
  • Unddeserved negative feedback
  • sold as genuine, but was not

Some data was presented showing that when these bad experiences happen, the buyers leave (worst case) or start buying less/take a breather.

Who does the buyer blame? Overwhelmingly they blame the seller. Buyers want eBay to focus on:

• Shipping (sense a theme here?)
• Feedback
• Ease of use
• Safety
• Buyer/seller conflict resolution

eBay Strategies

eBay buyer – post2

What defines types of online shoppers?

Four segments:

1. Shopping driven passionates
2. Convenience driven enthusiasts
3. Price driven value finders
4. Price driven bargain seekers

Passionates:

• Shopping is in their DNA
• Younger, just completed degree or married
• Rated by eBay at 4/5 spend/yr
• High eBay affinity
• Like auctions
• Not overly price sensitive

What should seller do to attract passionates?

• Highlight brands/style
• Personality in listing
• Gifting options
• Auctions

Convenience Driven Enthusiasts

• 5/5 $/yr – very attractive
• Love shopping for convenience
• More females than males – love pets!

What can seller do for Convenience driven enthusiasts?

• Offer BIN
• Merchandise with flair for fun
• Highlight unique hard to find
• Expedited shipping

Price Driven Value Finders and Bargain Sellers

• Middle age
• Higher income
• 4/5 $/yr on spend
• Think eBay has great prices and hard to find items
• Like auctions
• Think eBay’s shipping is too high
• Don’t like eBay return policies

How can you draw more of these?

• Offer returns
• Highlight the “deal”
• offer detailed product info
• List auctions
• Offer free shipping or discounts

eBay Strategies

eBay ecommerce forum – Live Blog – Kick off – the eBay Buyer – Meg Sloan post1

Opening keynote: Meg Sloan, Director, Consumer Research – In-depth view of the eBay Buyer.

About Meg Sloan
Joined eBay in 2004, 12+ yrs conducting market research. Brand and loyalty research guru. Never shared this externally. Runs team of 6 folks – buyer/brand/seller/site/cust sat/buyer.

What does the Consumer Research Team do?
Research team at eBay charged with maintaining a deep understanding of the market and facilitating “ah-ha” moments of consumer insight and clarity.

• Five areas of insight:
• quantiative surveys
• focus groups
• one on one interviews
• tracking studies
• observational research

Covering lots of topics:

• marketing development
• buyer/seller studies
• site experience
• buyer/seller sat
• eBay brand equity

Research focus
2004 – brand research
2005 – seller research
2006 – Buyer research (based on seller feedback)

2006 – Know thy buyer

How do they do this? Buyer segmentation/research

eBay Strategies

eBay ecommerce forum – Live Blog update by Scot Wingo

Last night eBay treated about 250 of it’s top sellers to cocktails+dinner and opening remarks by John Donahoe, President eBay Marketplaces. He started with some data on the group. The group represents over 7m items sold last year and $500m in annual GMV. The average feedback was around 42k.

Then John hit on some positives about eBay’s brand and the last ten years have been great and sellers have been a great partner, etc. They are stepping up communication with sellers and appreciate all the feedback.

John previewed some of the content of the conference by talking about buyers. It’s in both eBay and seller’s best interest to improve the buyer experience. The topics he talked about were:

• Who is the eBay buyer and what do they want? (a talk will start at 9am about this)
• How can they improve the buyer experience?
  • Finding
  • Ease of use, flows through site
  • Fun – how can they keep eBay fun and quirky
• Feedback – how can they make this better
• Shipping and Handling – this is still a big problem when they talk to buyers

The content today is largely focused on these same areas. We have:

• eBay buyer experience – understanding the eBay buyer
• Bill Cobb keynote
• T+S – making the user experience better (the buzz is we will finally see feedback 2.0 and some more on S+H
• Leveraging SEO+shopping.com
• Top seller panels
• Understanding profitability and your eBay biz (I heard they are going to case study glacierbay as an interesting ‘what did they do wrong’ kind of thing)

Seller reaction has been ‘wait and see’ so far. We know S+H items can be painful and some sellers that have seen Feedback 2.0 (the granularization of feedback) are concerned that it will increase workload and buyer blackmailing, others see it as a net positive. One seller said that eBay has been in denial about the buyer problem so it was good to see them recognize it and admit it’s a problem, but she worries that it’s too late.

eBay Strategies