The question I ask myself after reading this post: “Is it more likely for eBay to successfully improve from the outside or the inside?” You already mentioned that EE did not succeed because of other internal initiatives, and probably financial strain based on the cost of the project. In my conclusion (backed up by reinforcement of the message communicated at the recent eBay developers conferences) the eBay API, and the external developers community have been targeted as the platform participants that have an opportunity to make major improvements to the buyer focused side of the eBay platform. Mark Carges talked about some great internal initiatives that he was championing at the company, but he also shared that a great opportunity exists for the eBay developer community to enhance the platform.

So if the developer community does have this great opportunity then the next question to ask is “What is best for the buyer?” The post mentioned that eBay is a marketplace of “Value and selection buyers”. I think one problem with EE was trying to adapt to the “convenience and trust” buyers instead of educating and innovating the growth of the “value and selection” audience. The improvements required to grow or sustain growth could be as simple as improving the site experience for “value and selection” buyers. Innovate on ways to create more intuitive and informative experiences for the buyer and help them find relevant listings. I personally believe the mission should be to make the buyer experience more seller agnostic, and provide tools that address the buyer’s preferences through a deeply customizable rich internet application.

BuyerCommand.com is an eBay API based buyer tool that I have developed to transmute a vision I have for an “alternative user interface for browsing eBay listings“. The eBay marketplace is extremely fluid because of many factors and variant attributes, and it requires a more in-depth tool for discovering and evaluating eBay listings. BuyerCommand presents an alternative workflow design to assist buyers to discover, browse, and decide on even more eBay listings. The eBay buyer interface has to address the inconsistency of incoming user generated content, variant product conditions and attributes, seller variability and quality, and even historical or external pricing comparison. Many of these factors require a human review. A website design the presents more item facts so that the buyer can make an educated decision is critical for the eBay marketplace. Efficiency is also a crucial attribute of any tool that expects to assist the intermediate to advanced eBay buyer. BuyerCommand has a mission of providing an efficient and effective solution for eBay buyers to “Take Command of Their Buying Experience”.

I will not pitch the specifics of the application in this post, but more information is available at BuyerCommand.com. I really want to discover if I can be a participant in successfully improving eBay from the outside. I have answered the call that John Donahoe and Mark Carges communicated during the eBay developers conferences. My mission now is to incrementally enhance BuyerCommand.com, and build awareness of the application. It will be interesting to see if eBay can be successfully improved from the outside.

I think if all the risk had not been dumped on sellers it would have been much more successful.

Late to the EE RIP Party here, but I for one do not look back so fondly on eBay Express. Leading the efforts on authentication and messaging meant endless days of meetings and endless nights doing the work. I even had the pleasure of rerolling the entire train (redeploying the entire eBay codebase), a unprecedented feat never to be wished upon anybody

But alas, an intense but memorable time working with the best and brightest at eBay. RIP, EE. It’s been real.

-Mark

And a +1 to low margins being somewhat of a competitive advantage. The topic has been discussed quite a bit here. Dell’s move into CE products is an interesting example.

-w (not sure if you remember me, friend of Harry’s)

I always felt that if EE was on separated from the site during these rollouts that it would attract a new type of shopper. Remember when they wanted it to draw from the outside bring them to ebay. Then switched gears direct from existing user base. It never made sense, especially with BUY IT NOW available already within the site. But ohhh , time to move on!

I love you more today than yesterday. I miss you

Great to have you post here. Fee structure was always set up to support category-specific pricing. With no listing fees, eBay Express was already set up for CPA-based pricing, but it never had a chance to execute. It’s hard when you have eBay margins and structure as a comparable.

The cannibalization issue was a huge debate topic, but misses the larger picture. If eBay was the only game in town, this would be the big issue, but in the end, given the churn eBay sees around buyer retention and buyer growth, the focus should be on the future market size, not the present.

eBay Express did get a lot of traffic from eBay, but it resolved all cannibalization issues due to the higher conversion rate. It was also a conscious choice to get the marketplace to a significant size quickly (over $100M+ run-rate) to get the engine going. Over the long term, it was clear that eBay Express was demonstrating three key benefits to handle this critique: higher conversion rate, better retention, and growth in organic traffic. Unfortunately, all of those things require persistent investment and resource, and that’s not in ample supply right now.

You are, however, correct about margins, which is why Amazon delights in moving into eBay’s space, and eBay shudders at moving into theirs. Low margins can be a strategic advantage, in a way.

Take care,
Adam

Thanks for your thoughtful post. The only thing I have to add to your Inventory section is that the economics simply didn’t work for certain categories. In electronics, for example, where margins are in the 3-5% range, it’s tough to sell new, in-season products on eBay. If the economics won’t work, large sellers won’t list, and the user experience suffers from poor comprehensiveness. Try buying a new Canon Rebel Xti body on eBay today. It’s almost impossible to find a good deal from a large seller.

The other related issue is cannibalization. EE needed to 1) generate a large base of new users (these convenience oriented shoppers you mentioned) or 2) significantly increase the conversion to sale so that the effort was ultimately accretive. It also needed a pricing model that would get inventory not offered on eBay. Without new inventory, EE would just be a giant fancy search filter on top of eBay.

Ultimately, most of the traffic to EE came from eBay, meaning that it was essentially intercepting buyers already acquired, resulting in simply cannibalizing revenue.

I believe the root of this problem lies in the fact that eBay’s core value proposition has always been about making inefficient markets efficient. But the new, in-season, fixed-priced hard goods market is already pretty efficient. That means there’s very little margin or value left to extract. eBay can pursue Amazonifying the experience. But to get there, it will need to mirror Amazon’s margins–which suck (relative to eBay’s).

-jd

After so much confusion, I have decided to write it all. Here it is:

From a Platinum-Powerseller: This was the worst year of ebay for a reason. They totally missed the point of ebay. eBay is openness, and like I always said: ebay is the only channel where we could sell solutions, not only products like amazon. I decided to sell accessories exactly for that reason, ebay allowed me to put together solutions for different industries (photography in this case). I was able to offer kits for realtors, kits for dentists, all by combining various products out there. Other example: If I didn’t understand about surveillance, I would visit ebay and could buy a solution that included a cheap DVR and webcams put together software and all by a random guy that obviously played with it and without the need of a UPC could sell to us the whole solution. Inside ebay we are able to talk to that guy… If you want security system for your house and installing it yourself, you could count on ebay. I could keep giving examples…

They are destroying this experience, by focusing on the aligning all sellers to conform with their new rules. Making us upset by lowering visibility (search standing) if we get less than 4.7 stars out of 5 (makes me laugh because I don’t want to cry). Instead of attracting sellers full of ideas, they are scaring us of — leaving the few old big guys. Okay, they could have done that a few years ago when ebay was the only game in town, but now we can do our own website in less than a week. Promoting it is not as expensive as ebay and we actually keep what we build without the need of company’s like channel advisor. To summarize these are the three ebay mistakes: discourage and upset sellers (ebay’s main asset), try forcefully organize search standing (all that work for the same results — you will see), lack of understanding of their own business and the philosophy that created their own success (openness & equality — giving the same search standing to a guy in Namibia trying to sell a hand made sweater than the ceo of Ralph & Lauren — this is gone!!).

When ebay brainless dictators started all the changes, I kept telling myself, they will never be able to compete with amazon at these prices (yes they kept increasing them instead of leveling them), but that’s okay, they could afford it, because like I said, ebay allowed the average Joe to sell solutions fast and easy!! Put them side by side with the biggest brand names. I laugh so many times, with ebay ads, one time I found this guy who imported iPod like Mp4 players (brandless -no UPC), and did his comparison chart comparing it to the beset iPod; Side by side, it was a better proposition for half the price. He sold it all! Can you imagine a little Taiwanese street vendor perhaps being able to compete with a giant like apple — yes they are not the David anymore (they still try to pretend they are:)… I also kept telling myself, their ideas are not bad, but why mess up something like ebay trying to implement them (After I dismantled my sister’s bike trying to make a bubble making machine when I was 9, i was taught by my father to never destroy something in order to make something else — logical isn’t it), that is why I applauded the previous management team when they came up with ebay express (they were listening and were willing to experiment) — the only mistake they made was the fees (yes! ebay express was about fast shopping cart, not communication with experts selling Solutions). The outcome would be completely different if they offered free listings, low closing fees following “grow fast” marketing used by amazon when they started. Instead, ebay express was the ebay Buy it now, that everyone knew were more expensive than the auction starting price in ebay (in fact: Sellers highest possible price). Where was the common sense of the guys creating it? — just give it gas, I guarantee sellers were ready.

So you might think, sellers are happy because they finally got it, they have lower prices and introduced FP30. No my friends, this is another huge mistake my friends… We sellers price products according to the channel’s fees, so now turns out that my Buy-it-Now prices are lower than my auction starting prices. Good for me, but this is a huge strategically mistake for ebay. They are competing with themselves:AUTO-DESTRUCTION!!. Instead of doing it on another site, like ebay express, they decided to close it and put all eggs in the already fragile egg’s nest (they decided to do dismantel the bike, and I doubt their father is a mechanical engineer that will put it back together even when I had lost half the screws). So what’s going to happen with channels? First let me clarify, that ebay FP30 low starting price and same closing price as amazon is still far from achieving fees a yahoo store (1.5%) or amazon (8%) is able to offer. Please remember that amazon charges 8%, but that includes credit card processing (almost 3%) and customer service ($$$). Can you imagine? So as you can clearly see, they have given these monkeys a machete and invited them to our elevator. I loved ebay, I made a dissent living for the past 5 years and hurts watching them destroy it. Coming back to what’s going to happen with channels, the business will become more competitive. Paying 2% for channel advisor, will be a huge deal, not a drop in the bucket, yes we sellers compete with other sellers and their tool selection.

In conclusion, closing ebay-express and introducing lower fees for fixed price, will hurt the whole multi-channel industry (service providers, not sellers). Their only hope for getting something out of their changes is gone with ebay express. They will be forced to lower prices for auctions because all sellers will do Buy it now on low price items. The confusion created for sellers and buyers has opened amazon doors wide open, where a french guy will receive you with open arms (you know who I am talking about… He is awesome!).

I kept quiet all this time, but this month was worst than ever, so there you have it. Please, please someone forward it to the ebay management team. Tell them to treat my deserving insults as frank constructive criticism lol.

Good bye cruel ebay!

Chung, as I remember it, you made me take the “tastes great, less filling” piece out of that review deck.

Adam

My own lookback echoes yours. In hindsight, one of the biggest strategic mis-step was to give up seller agnostic too early and too easily. Without that shield, we didn’t have the option of building the business one brick at a time. With it, we would have avoided a number of the “what killed it” issues, especially the need to scale traffic overnight, meeting irrational expectations, and the inevitable seller backlash.

I’m proud of the team that contributed to eBay Express, and am personal humbled for having the opportunity to be part of it. It’s gratifying that eBay is incorporating so much of the original eBay Express ethos externally and internally in it’s re-invention. I wish eBay the best in doing so.

On a personal note, don’t forget the sage’ish advice of “taste great, less filling” when faced with a difficult issue

Looking forward to hanging out with the gang.

cheers,
Chung

Thanks for taking the time to bring us all together once again, Adam. Looking forward to having one last war room meeting as EE is put to rest.

Thanks for the comment. I’m a bit confused, however, since one of the features of our new classification engine and finding experience was exactly what you describe – the ability for buyers to easily specify, either by keyword or by links, specific attributes that they were looking for. In fact, it was the first search classification technology for eBay to allow this even for sellers who did not specify the attributes on their listing, but just used keywords in their title.

Try it today – you absolutely can pick colors and sizes (or hard drive sizes or gemstone types or over 2000 other attributes across over 800 categories of product).

eBay Express also launched integrated catalog-based finding in categories like Books, Movies, Music & Games – allowing buyers to easily shop by attributes across products, and then to pick individual listings (like Half.com, Shopping.com, Amazon.com, etc).

Adam

Simply summarized, eBay Express was released before it was ready. eBay Express was an eCommerce product without eCommerce features. Features such as product attributes (allowing customers to choose colors, sizes, etc.) had to be there. Without it, there was no way to make it a product or service that could meet the needs to convenience-oriented buyers.

Actually, Amazon has nearly 10 years in this, since I truly believe they’ve been iterating on the constructs for third-party inclusion since the zShop days. It’s really been in the last three years, though, that they’ve hit the winning formula for their third party marketplace.

If you think about it, Amazon’s play is extremely risky. They’ve cultivated a high value brand around customer service and quality, but then they are basically “lending” that brand to third party sellers. Also, they inherently compete with their sellers, creating

Instead of retreating from that danger, they have gone headlong into programs and systems to make sure the buyer is always taken care of, and providing infrastructure that makes it both easier/cheaper for the seller AND generates a higher quality experience for the buyer.

You are correct about the brand risk for eBay. We did focus groups in 6 cities and 3 countries, and at the time, it was very consistent. The eBay brand means a lot of very good things to people, but at it’s core, eBay means auctions & used items. Obviously, the challenge for eBay will be to shift this towards eBay meaning shopping. (Actually, the “it” campaign had a bit of this shift at it’s heart.)

I don’t think we should understate the challenges Amazon will face here, and also I think we’re ignoring that the Amazon-system is unlikely to really allow people to build new businesses as effectively as eBay has. eBay has a lot of opportunity for success if it’s able to leverage it’s unique advantages into a great customer experience.

Adam

When Express first came out, I captured some of the quotes I found from buyers who were expressing their reaction to the site:

“Ebay Express was easier to search than Amazon is.”

“yipee!! I just went shopping on express!!! How cool..”

“I like the new design. Especially when you’re looking through the categories. Very slick, eBay should adopt this.”

And, as Adam knows, a true sign of success: this quote from a Pottery and Glass seller: “I’d like to know if there are any plans to include the Pottery & Glass category.”

Farewell, eBay Express!

Excellent post and great insight into how things work(ed) at eBay. I was left thinking about your prediction for the future of eBay core given what you know about EE and Amazon.

If I take your logic and push it forward:
* eBay brand (auctions/flea market) didn’t help, it hurt EE.
* Amazon has put a solid 3yrs into this.

Thus, my question is do you really think eBay’s strategy of adding a bunch of fixed-price inventory to eBay core will work? Won’t it suffer the same fate that EE did because they haven’t solved the brand problem (in fact I could argue it will be worse – at least EE had the ‘express’) AND during all this time, Amazon now has a 3yr advantage?

Curious to hear your thoughts. From a pure “MBA case study” perspective, I think it’s very interesting to look at the position that eBay has worked themselves into (with some help from Amazon).

Scot

Cheers to all that worked on Express and a special thanks to Adam for his gracious farewell.