eBay is one of those “the community really matters” success stories. The company slowly and steadily built a community around niche products, antiques, hard-to-find stuff, collectibles, etc. eBay was so successful that neither Yahoo nor Amazon could even dabble in the space.
But that was a few years ago, and many things have changed. For one, we have a whole new generation of Internet users. The “millenials” are less likely to seek out collectibles or memorabilia, as they’ve been brought up with the Internet right at their side. An old Sega Genesis kit is much less exciting to a 25-year-old than an Atari 2600 is to a 35-year-old.
More relevant to the decline in eBay traffic is the erosion of trust for the brand. As the company served the needs of its shareholders, instead of its users, it catered to the bottom line. And that bottom line meant foregoing the concept of nurturing the community, and instead to increased sales and transactional revenue. Which, in turn, means less value is placed on the individual seller, and a higher value to the institutional or semi-pro seller.
When faced with the challenge of selling my Vaio (now $1000, want it? anyone? I’m throwing in the docking station too!), my wife and I initially turned to eBay. We put up a fairly standard listing, but have a zero rating. We had a handful of inquiries, every one of them turned out to be a scammer (including one who very cleverly had establish a history of 35 items purchased, but as I checked I realized they were all under $5). Similarly, I’m going to assume we had no other offers due to our 0 rating. I’m trying again now.
The above experience is the core problem of eBay today. It works for power sellers, and is probably still just fine for the collectibles and hobbyists. But “regular people” trying to sell decent-sized items are unable to leverage the millions of people who use eBay. It’s almost off-limits to us. I actually found the process more daunting and nerve-wracking than experimenting with Priceline and playing Call of Duty 4 on Xbox Live with 12-year-olds.
As I’ve polled my friends and peers, many have expressed similar doubts and concerns. “eBaying it” is no longer the action verb it once was, and if a company loses it’s position as brand-category, it’s in trouble. Their stock price is down over 50% this year alone (I sure hope nobody takes that one too seriously, but hey, it’s the Internet).
The interesting thing to me here is the opportunity. I think eBay could easily rebuild, but they’ll have to make some tough decisions. I also think it’s a great time for another brand to attempt to enter the online auction market (you’ve got to lock that down!), with an emphasis on trusted sellers and buyers, integrated community selling (I tried importing my sale into my facebook account, but it was very non-obvious and failed miserably), and empowering individuals.