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Technology Stocks : eBay - Superb Internet Business Model -- Ignore unavailable to you. Want to Upgrade?

To: JF2155 who wrote (4993)	8/21/1999 8:47:00 PM
From: GMW	Read Replies (2) \| Respond to of 7772

I bring this letter as a point of information:To whom it may concern: I am truly disappointed in EBAY?S decision to handle reserve auctions in the manner chosen. The manner in which EBAY has chosen to solve this ?Perceived Problem? has drawn into question if EBAY knows how long reaching effect this may have. Reserves are a sacrosanct industry standard. The reserve is a core protection in any auction venue. When a reserve is met there is no problem. When the reserve is not met it is a high bidders choice to meet that reserve, again no problem. When the high bidder chooses not to meet the reserve, again no problem. I personally use the reserve to protect me, the unfortunate seller. When timing or circumstances make EBAYS? system or the local internet providers or phone companies or individual computers themselves unavailable for fluid bidding, the reserve protects me. The FACT that sometimes that an item does not sell is, in my opinion, my problem not EBAYS? since you are paid anyway. The seller is the only one who can set the price for the item and meet the sellers need. The buyer setting the price and method of sale ridicules every business standard I know. I believe that if a buyer set policy, your service would be free. Considering the Fact that the buyer does not add directly to your bottom line why penalize the seller. The buyers complaints as to prices, store hours, and business policy are as old as time it self. The one thing that never works is ?Big Brother? taking sides. This action is like charging extra because a seller chooses to put items under glass where a thief can not get them. The effect is the seller charges more for the item. This causes the customer to buy less and the seller looses any way. The way a business person chooses to display, secure or where to begin there pricing is not usually determined by the real-estate owner. I acknowledge that this is dependent on industry standard. Charging for any service forced by the buyer and not passed on to the buyer is an unbelievable precedent. I know that if I demanded that every buyer incur the cost of the reserve or the loss from not using one in their purchase, forced by Ebay, this would be just as unrealistic. I would like to address the monetary portion of your letter. Charging $1.00, and the 25% rule seems perfectly all right short term, just cost of doing business. Lets be honest, in my opinion, since these complaining users are buyers and are not on your billing, this is a bottom line issue and not a reserve auctions one. This is not a way of raising profits and growing business like the gallery. This, in my opinion, is an ill-advised attempt to cover past losses caused by down time and perceived back door deals. I would like for someone to bite the bullet and own what and why they are doing something. Business people quickly lose confidence in those who do not. You will find that when any good business person loses confidence or trust they pull back. They reevaluate and check their crystal ball to see the future: 1. Quality items will dwindle (long & short term) A. Discouraging reserve protection with a fee in and out, non-refundable or propaganda, threats or entreaties or any other method eventually will take its toll. B. Lulling inexperienced sellers into a false sense of security alluding that more bidders will bid if there is no reserve will cause novices to take the chance ,not use the reserve and lose, when experienced auction people know that prices are dependent on QUALITY MERCHANDISE regardless of the price. Quality buyers will wade through a pile of junk to get to what they want, but will not lead the pack at auction because they draw competition and only bid at the end with the collectors and dealers. This is why ?Sniping? happens. C. EBAY interceding for the buyer and allowing the buyer to affect how sellers do business (at least 25%of reserve) will effect the type of merchandise as well as the price. (BIG BROTHER EFFECT) D. Arbitrary pricing based on perceived lack of value (no reserve) have and will lower net prices. E. Higher beginning bids will result in fewer start bidders. This will also result in fewer bids and lower net prices and sales for sellers. (Not affecting Ebay in the short run because of built in costs, listing fees and value fees. The long run however, as a seller, if I cannot get my price I can not risk my better items) check the high starting bids at the end of auction in any category!!! 2. Your stock price will go up (short term). A. Covering the losses from down time allowances with an added fee both in and out enhancing your quarterly earnings. 3. Your stock price will go down (long term) A. As more costly merchandise dwindles so will your bottom line. The in and out fees on lesser items will not be enough to sustain operations and you will have to increase prices. This will cause an unsettling effect among both customer and buyer not to mention those pesky day traders. Since sellers items are the bread and butter of this type of auction it may even be necessary to institute an Oh My God 10% buyer's premium or a club fee to salvage the loss of those mid to higher priced items. Then those same buyers will say ?the nerve of those people charging us when there isn?t any thing but low end stuff there anyway.? This statement has been heard at any low end show in the country. These same people have not paid a legitimate price for anything in years. These opinions are based on limited auction experience only about 20 years buying and selling at auctions on the eastern seaboard watching how some grow and some go out of business. The key is how they handled their consignors and the merchandise that they could generate. I have determined most importantly that it is neither the price nor the auctioneer nor the ambiance of the hall ? IT IS THE MERCHANDISE? first last and always. Any decisions that discourage the consigning of QUALITY MERCHANDISE should be, reverently and solemnly considered then FORGOTTEN!!!!! When you have the merchandise BUYERS will come. History has proven this over the years. An auction is a GAME where sellers come to get the best competitive price possible, and a buyer comes to buy at the lowest price possible. Fair value is contingent on free flow of bids STARTING where the BUYER feels comfortable (NO ONE CAN DICTATE THIS) and ending when the top competitive price is reached (NO ONE CAN PREDICT THIS). Any interference no matter how well intentioned results in an inequity effecting the outcome. Reserves are one of the most important protections in the game. The Reserve protects the most vulnerable person from the most unethical person. The fact that Ebay has chosen to take advantage of this is unconscionable, and in my opinion, a really long reaching bad business decision. Respectfully 1PM Listings 2,685,912 7PM Listings 2,477,891 Short term loss 208,021 X at least .25 cc File EBAY