By the way, for those who missed it, here is Pierre's letter
that was posted on EBay's Announcements board during the
weekend, then yanked when they pulled back the reserve
auction changes (highlights mine):
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Dear eBay Community, I am writing to respond to the
concerns many of you have raised in reaction to our
change in reserve auction policies and pricing. I
have answered many of you via private e-mail, but
I thought it would make more sense to make a single
statement here that everyone could read.
First, let me reiterate the fact that this decision
was made with the best interests of the community in
mind. As I've said before, our success is based on
your success, so it doesn't make a whole lot of sense
for us to do something that would intentionally
hamper your success. eBay has always tried to do its
best to support its buyers. Buyers don't pay us a
single dime, but they do pay our sellers. And we think
it's important to do our best to provide the best
possible service for buyers. Most sellers realize this,
but I just wanted to restate the obvious. Reserve price
auctions had two fundamental problems, from our point of
view: one, buyers don't like them; and two, they cost
more for us to support.
Let me explain both points. Buyers have always told us
that they dislike reserve price auctions. This is primarily
because they don't know how high the reserve might be,
so they don't know if it's worth their while to bid on
the item. Nothing is more frustrating than becoming
involved in an auction but having it close below the
reserve. You've wasted precious time, and nothing has
come of it. There were many possible ways to deal with
this issue, including revealing the reserve at the end
of the auction. We didn't like that idea because the
prospective bidder still doesn't know if they're wasting
their time. But what a traditional auctioneer typically does
is start the bidding in an auction at 1/4 to 1/2 of the
reserve. That way, prospective bidders have a way of
estimating what the item may eventually sell for, without
knowing the precise reserve of the seller. So that's how
we decided to do it at eBay, as well. You can set your
minimum bid at any reasonable price. "Reasonable" is defined
to be at least 1/4 of the reserve. Why waste time processing
a $5.00 bid for a $5000.00 item? In my mind, it doesn't
make sense. Anyone bidding $5.00 for a $5000.00 item doesn't
really expect to get it, and the excitement generated by
bidding low fizzles out by the time the bidding approaches
true market value, and people begin to get serious.
Having said that, this change in format was simply our best
idea. We think it will work, but it may not. We would like
everyone to give it a try. Remember, it's a level playing
field. So if you choose to use a reserve price auction, you
will have this restriction along with everyone else who uses
reserve price auctions. If this turns out to be a total
disaster, we'll reconsider it. Give us time to see if this
is working -- we think it will result in a higher success
rate for reserve auctions, and higher selling prices.
If it doesn't, we'll revisit this. Remember, it's in our
best interest to make you successful, because we make more
money that way. If we do something to hurt your success,
obviously we will correct that.
On the second point: because of the confusion and frustration
around reserve price auctions, we receive a higher proportion
of customer support and Safe Harbor e-mail relating to them.
These cost us more to handle, of course. And since reserve
auctions have lower success rates, we collect fewer final value
fees on them than a typical auction. That's why we decided on
a $1.00 additional fee for using this feature. While nobody
likes new fees, we hope this will discourage unnecessary use
of the feature, which will give buyers more no-reserve auctions
to choose from. And for sellers who still need to use the
format, the additional cost will help support our additional
expenses.
And finally, it's only a dollar -- hopefully, you'll get an
extra dollar for your item if you use the reserve auction format.
If not, don't use the format. In order for the eBay community
to continue to thrive, it must evolve as it grows, even though
sometimes change can be unsettling.
Again, these new policies were made with the best interests of
the community in mind. You have raised some valid concerns,
and we hope you will give our idea a chance. We are truly
trying to make things better. Reserve price auctions are
optional -- you can decide whether or not they are working
for you, and then decide if they are the right choice for you.
I want to thank you for all the constructive suggestions that
have come out of this, and I'm sure that together we will
continue to make eBay a better and better place to trade.
Regards, Pierre
-------------------- end quote ---------
My comments:
1. Pierre gives two reasons - "buyers dont like'em" and
"they cost us more to process". When the policy was changed
a few hours after the above message, the reserve auctions
were left precisely as they were - thus buyers would still
"not like them" - but the fees were (though reduced) left
in. Is there any doubt then that the priority was on squeezing
extra $$ instead of carding for the buyers? Why lie then.
2. "If it turns out to be a total disaster, we'll reconsider it" -
you reconsidered it a few hours after this message. Is
this an example of yoyoing that should be expected of management
of a multibillion dollar company?
3. "It's only a dollar" - wrong. It's hundreds of dollars
(if not thousands) a year to individual sellers and
tens of millions of dollars in EBay coffers. So why bring
it up? If "it's only a dollar" - don't charge it!
4. "If not, don't use the format." and "you can decide
whether or not they are working for you, and then decide
if they are the right choice for you." - a lot of people
took this to mean "EBay - love it or leave it". Well,
it seems quite a few sellers are taking the second alternative. |
