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Chris Dawson is the co-founder of eBay-related blog TameBay and a consultant on how to sell via online marketplaces.
We asked him a few things about how eBay is developing as an e-commerce channel for businesses in the UK.
How is eBay developing as a sales platform?
I see eBay as undergoing a seismic change this year under the new management team. eBay will become more business seller-oriented with less focus on the casual seller.
I believe eBay recognises that business sellers can provide a wide range of stock at competitive prices and a great buyer experience, which is closely aligned to eBay’s stated goals.
The new management team is likely to focus less on auction business, although that will still be important to the fun element of eBay, and more on fixed price listings, which are essential to the velocity of sales on the site.
What’s the major mistake you see from companies on eBay?
The major pain point for companies is understanding the level of customer interaction and service required.
On a traditional e-commerce site or offline, when a customer places an order with a 28 day lead time, no communication between placing the order and confirmation of the delivery date doesn’t cause concern.
On eBay, buyers expect more communication and faster delivery times.
You have be prepared to invest in dedicated resources to manage your eBay operation, but many companies don’t realise this. You can’t just tell the IT department to set something up and forget about it. It needs to be customer service orientated with buy in throughout the whole company.
Why divert resources to eBay over other investments you could make online?
Basically because eBay have all the buyers. I believe that any online retailer should expect sales to come from a multitude of different sources, including their own website, eBay, Amazon, shopping comparison engines and social networking sites. And of course direct search engines.
If you are not offering your product on eBay, you are missing out on a large sector of buyers. In the UK, we have the highest spend per capita on eBay in the world. And missing out on that spending power is stupid.
If a small business sets up a website, they will have to drive traffic themselves. But eBay’s business is about driving buyers to the site and they have enormous budget and resource to do this. Businesses should look at eBay as a customer acquisition tool where they can attract customers and drive them to their own website for future sales.
Do you expect to see greater competition for eBay in the UK?
I’ve been at ChannelAdvisor Catalyst in the US this week and got a sense that with the weak dollar, many US merchants are eyeing overseas markets and marketplaces are likely to follow them.
Overstock has stated it will be launching in the UK later this year and I would expect Buy.com to follow soon after.
But there is room for expansion both on eBay and through other channels. eBay’s biggest challenge will be distributed sales, where leads come from Web 2.0 enabled sites like Facebook and sales may be processed without the buyer even visiting the eBay site.
What other changes do you expect to see from eBay this year?
I’d expect to see changes that aim to promote products from the best sellers, in preference to those with poorer feedback.
Fees will be more closely aligned with the sales achieved by merchants, so broadly speaking, this will include lower insertion fees and higher final value fees, and fees being aligned with the cost of doing business on a category by category basis.