What's Ahead for eBay and You?

Merchant group aims to help the site restore its brand value.

by Brad and Debra Schepp
- Feb 06, 2009

As the new year unfolds, many questions remain unanswered. Will the new American president have a successful administration? Will the economy rebound, and when? When will we get our Auctiva Commerce invitation? What can we expect to see from eBay next?

We can't help much with the first three questions, but to answer the last one, we sat down with Joseph Cortese, founder and chairman of the Professional eBay Sellers Alliance (PeSA). We went straight to Cortese because you'd be hard-pressed to find someone with more experience on eBay, more passion for the idea of eBay and with more expertise in helping others build successful businesses on the site. We found him to be both frustrated and optimistic—which made for quite an interesting interview.

Cortese founded PeSA in August 2003, when eBay was soaring to new heights every month. Over the years, he has seen his group evolve, and the past year has brought more changes than ever.

"PeSA has evolved in the sense that we've been able to identify the fact that sellers are very dependent on eBay, up to a point," Cortese tells us. He notes that this was especially true years ago, when people were first incubating their businesses.

"eBay has helped a lot of people who never had a business before," he adds.

Years ago Cortese and the other PeSA officers recognized the need to move out from under the "eBay umbrella." The result was the eCommerce Merchant's Trade Association (ECTMA), the arm of PeSA that builds partnerships and relationships with other marketplaces. The ECTMA is busier than ever as we step into 2009.

"The trend is very clearly defined," Cortese says. "We see many sellers who have dramatically scaled their eBay presences down to 20 percent of their overall e-commerce business—or even none at all. A lot has happened within the last year. It's hard to find positive things to say about eBay because it's difficult to find the value that some of the recent changes have brought. It's very difficult to introduce a complex series of paradigm-changing features to a business without helping sellers understand what the goal is and how you are meant to arrive at that goal. eBay has introduced enormous change. The frequency has been much too swift and the magnitude has been much too profound."

Looking for direction

Cortese notes that eBay hasn't made it clear to sellers what its new vision is.

Sellers are not really understanding what eBay's vision is. I'm not sure eBay really understands

"We're told we have to reinvent ourselves, but what are we supposed to reinvent ourselves to be?" he asks. "Sellers are not really understanding what eBay's vision is. I'm not sure eBay really understands.

"It's not a rosy picture," he continues. "eBay can do one thing that may seem simple, but it has a huge impact: search, for example. If people can't find what you're selling, you're not going to sell it. I'm not enjoying the turnover conversion that I was a year ago. Those changes have come about very quickly. I think there are very few sellers whose businesses are 100 percent eBay businesses, as compared to a year ago."

Where have those sellers gone? About 18 months ago, 173 PeSA members moved over to Amazon, according to Cortese. "They literally crushed Amazon's third-party sellers."

But the news for eBay is, perhaps, not all grim. "I believe eBay is, for the very first time, realizing how important it is to allow sellers to do what they do well," Cortese says. He adds that PeSA is planning to spend some time with eBay to work through the issues and help the company build relationships with the community. That will help them develop ways to create an environment where eBay is once again a viable marketplace. But what will some of those changes look like?

First and foremost, according to Cortese, eBay must decide what it's going to be. Will it try to become more like Amazon? Will it return to its roots?

"If I'm the CEO of eBay," Cortese muses, "what am I trying to do? Am I going to grow this business and take it to another level, or am I going to just look at it as a cash producer and diversify into other things and look for growth elsewhere?"

If eBay corporate decides to view eBay as a "cash cow," and use that cash to grow other things, then clearly it's been moving in that direction for the past few years. But if eBay looks at its core business, the conclusion is simple, according to Cortese.

"eBay's core business is about sellers. If you're truly partners with your sellers, you create a business where you're making money for each other," he tells us. "eBay has a remaining opportunity to be the best online auction property in existence, but it's going to have to find a way to create that value proposition."

Rebuilding bridges

Once eBay makes that decision, the company will have to work to court its successful sellers and convince them to come back to the fold.

"They're going to have to start looking at sellers as partners," he says. "There are rudimentary fee structures that could be implemented that will allow sellers to feel that eBay is truly their partner. The message is mixed because eBay's actions don't match its words. Feedback [for example] is counter-intuitive. Sellers are considered guilty until proven innocent."

Once you have a loyal performing core, everything else falls into place and can work in harmony

Cortese explains that once you have a loyal performing core, everything else falls into place and can work in harmony. "It used to be that way five years ago," he reminisces. "eBay's problems could probably have been counted on one hand. There were fraud issues then, but eBay got distracted by acquisitions instead of focusing on the core. If eBay continues down this path, it won't be pretty. But if there is some dramatic change and the company does figure out how to create that relationship where everyone can grow, we'll see something like the eBay of 2003 again.

"There's no point having sellers if they're not going to be profitable," Cortese continues. "That's going to be my focus in our discussions. I think we can have a new eBay with an incredibly provocative competitive differentiator—an eBay that wants to the best it can be, in terms of auctions and fixed price sales."

Then, according to Cortese, the greatest challenge will be to get those great sellers who've already left to come back to the site. "If eBay allows us to do it through PeSA, we can get the great sellers to trust in eBay again," he asserts. "If eBay is a viable channel, we'll convince them to come back and share in eBay's profitability. I believe in the power of consolidated markets. If I believed in a true alternative, I'd put my efforts in whatever direction is best for my organization."

As a final note, Cortese adds: "I'm positive that we're working with eBay, and I'm hopeful. If they're willing to work with us to help grow a new brand and a new message, together we may be able to redevelop growth. A lot of companies are able to reinvent themselves."

For Cortese, eBay and all the once-successful eBay sellers who find themselves pining for the olden days of 2003, we'll continue to keep wishing that 2009 will be brighter than the end of 2008 seemed to be. If Cortese can be optimistic after all that he's seen, perhaps there is hope for the rest of us, too.

About the Author

Brad and Debra Schepp are the authors of 20 books, including eBay PowerSeller Secrets and The Official Alibaba.com Success Guide: Insider Tips and Strategies for Sourcing Products from the World's Largest B2B Marketplace. Their most recent book, which Deb co-authored with John Lawson, Kick Ass Social Commerce for E-preneurs: It's Not About Likes—It's About Sales, was recently named the 2015 Small Business Book of the Year in the social media category.

For further information, visit Brad and Deb's website, bradanddeb.com.

Opinions expressed here may not be shared by Auctiva Corp. and/or its principals.

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