Ask the CEO: Does eBay Want to Eliminate Small Sellers?

Auctiva boss Jeff Schlicht answers this and other of your questions.

by staff writer
- Oct 10, 2008

Is there any truth to the rumors that eBay wants to eliminate the small sellers and go to a Wal-Mart-type retail model?

Schlicht: Yes, and no. I don't think eBay ever wants to be a retailer that competes directly with sellers the way Amazon does. eBay's offering a Diamond tier for sellers with sales of more than $500,000 or 50,000 items a month in an effort to compete with Amazon and attempt to bring more buyer traffic back to the site. Diamond-tier sellers must maintain a 4.8 DSR rating or higher, among several other requirements. Currently, the only Diamond-tier seller is, (user id: buy). Here's some sales data for Buy from the past 30 days, as of October 5th.

Total Sales$2,948,389
Total Listings1,113,272
Successful Listings59,998
Total Bids96,314
Items Offered73,066,278
Items Sold96,314
Bids per Listing0.09

As you can see, buy has listed more than 1 million listings with only a 5 percent sell-through rate. That would put most sellers out of business. However since Diamond-tier sellers get to negotiate their fees, it's widely speculated that Buy pays no listing fees and discounted final value fees.

It's said that there are 10 or more other such companies waiting to come join the Diamond tier this holiday shopping season. The impact of these sellers on the marketplace remains to be seen. It could add vibrancy and more buyers to the site by offering a wider selection and good prices. However, it will be more difficult for smaller sellers to compete toe-to-toe on the exact items listed by Diamond-tier sellers given the discounts they receive.

So you're real—not a robot? What's the advantage of purchasing a custom domain name for my Auctiva Store? When I put my link on my eBay page, I got a warning saying that it was an illegal thing to do, as it was directing people outside the eBay site and onto Auctiva's site.

Schlicht: Lol. Sometimes I wish I were a robot—like when my wife asks me to clean up the house. I could just convert to robot mode and do it real quick. Then I'd convert back to lazy husband mode.

The advantage of having your own domain name is that it allows you to create a deeper connection with your customers, encourage repeat purchases, and have a place you can promote and send your buyers to. It's true, though, that eBay does not allow external links on listings. They do this primarily because some sellers would use that to send buyers to their own Web site and then sell the item off eBay, which would cost the site the fees it charges. What you need to do is find more creative ways to use your domain name.

You can use it in your e-mails to users, flyers, business cards, etc. Your domain also allows you to have an e-mail address with your domain name, so you could use that in all your conversations with customers. It's something that would remain on their computers or they could save your e-mail to find your items again. For $7 a year, it's a cheap way of promoting your items, but that promotion is mostly up to you to do.

eBay is saying they will no longer allow third-party checkouts. How is that going to affect Auctiva's checkout, especially when insurance is purchased?

Sellers used to paying very high fees to eBay understand the value of free

Schlicht: We've been working with eBay on this since April. eBay is doing a good job of taking the needs of our customers into consideration, along with the other third parties who offer checkout. It's our hope that we'll still be able to integrate our shipping insurance and other services—such as our soon-to-launch buyer product warranties on electronics. We rely on our checkout to earn some of the money that keeps Auctiva free. Over the past few months, eBay has several times taken action that has reduced our revenue. We continue to add products like the buyer product warranties, but if eBay continues down this path, we may need to consider some alternatives.

Why doesn't Auctiva charge a small monthly or yearly fee to use it? I would gladly pay a subscription fee, as long as it is less expensive than a standard fee charged for an eBay store, or the fees charged by Vendio.>

Schlicht: The main reason we don't charge is because it would make it more difficult to attract new customers. In the 10 years I've been in this business, there hasn't been a good example of a growing, profitable third-party eBay tool. In fact, the few that are around, such as Vendio, are basically here because they received huge amounts of venture capital from investors, and have used that money for massive marketing pushes. We're talking tens of millions of dollars each. Without that money to attract new clients they wouldn't exist. And for that reason, most other third-party tool vendors have gone out of business.

Since I did not have tens of millions of dollars for marketing, I had to come up with another way of attracting new customers: FREE. Free is good. Sellers used to paying very high fees to eBay understand the value of free. I knew when I did it though, that I'd need to find other ways to make money—which is why I came up with shipping insurance and product warranties for buyers. eBay also pays us a small commission on each sale for referring buyers to eBay, but only when we send the buyer to eBay.

Thank you so much for offering Auctiva's alternative eBay listing formats for free! Auctiva allows me to reduce my overhead while presenting my potential buyers with more detailed descriptions with which they can make better decisions—and hopefully increase my sales revenues! What—if any—other free services might Auctiva consider introducing in the near future?

We're actually so busy working on things that help us make money from Auctiva that we don't have a lot of time to work on new projects. One site we have put a lot of effort into building is This site offers eBay buyers around 1 percent cash back on any item they purchase. We also give the person who referred that buyer to KickItBack 0.5 percent. So go sign up, get your referral link, and start promoting it. It helps keep Auctiva free.

Some of the products we've considered building in the past have been a photo sharing site and a service that blocks your computer from going to unsafe or adult-oriented Web sites. I wouldn't recommend trying this, but there are many malicious sites out there that you'll land on automatically just by misspelling the site you were trying to go to, or transposing a couple letters in their name.

Is there any chance that you will eventually expand your services to other online auction sites beyond eBay, such as Bonanzle? I love your service, but am not long for eBay. The biggest thing I'll miss is your fabulous service! I would even be willing to pay a small fee.

We're preparing to launch an open beta of our new Auctiva commerce stores

Schlicht: We aren't considering support for other auction sites right now. The key thing a site would need to convince us to support it would be a large number of active buyers.

We are, however, preparing to launch an open beta of our new Auctiva commerce stores. I'm very excited about this because these stores are truly amazing—most stores with similar features charge more than $1,000 for the software to run them, then you need to find a server to run it on, etc. We're doing all that for you. And they integrate with your Auctiva account. You'll be able to move items from Auctiva to your store. The beta will start in late October and run through early January. Be sure to try them out and provide your feedback. Those two months will be your last chance to give us your input on the changes you'd like to see before we launch the stores and you can begin selling with them.

When oh when are you going to start your own online auction site? Also your counters never match eBay's and hardly ever work lately. Can you guarantee that nobody will sell my info if I do sign up for KickItBack?

Schlicht: I think an auction site would be difficult to compete with eBay on. Unique, auctionable items probably are best sold and realize the highest prices on eBay because of the huge amount of collectors that flock to the site. We do feel confident, though, that on commodity items our new Auctiva commerce storefronts will enable you to sell quite effectively.

As for our counters, we had been working on revamping those for several months and in late September we launched our new counters. They are far better than the past ones in terms of reliability. In fact I have not been to an auction since they've launched and not seen the counter hits—whereas our old ones running on the old Sellathon technology almost never showed up. We began revising listings and most listings have now been converted to the new counter style.

As for selling your data, I don't think I'd ever do that. I've never done it in 10 years, and I can't think of a situation where I would, nor has anyone ever approached me about buying it. Perhaps two or three times in 10-plus years have we sent an e-mail on behalf of a partner, but we did so from our servers; they just gave us the template. And that was quite some time ago, around 2000 or 2001. Our customers are far too valuable to us to risk alienating them by making a few thousand dollars.

What a novel idea to actually post questions to the CEO. Not only that, but you look cool—AND you even spell your name correctly.

Schlicht: Wow. Thank you. Some of the people around the office are getting tired of seeing my picture when they log in. It's sort of big, they say. I think so too, but I wasn't the one to make it. Whenever someone comments around the office like that, I wear the red shirt from the photo the next day. Honestly, was this question was sent in by an employee and not a customer?

What advantage will I gain by using an Auctiva storefront over my current storefront with eBay and their checkout system? Will my customers become confused?

Schlicht: The Auctiva store feature is a promotional tool for you. It showcases everything you're selling on eBay, and is functionally different than an eBay store. We made Auctiva Checkout as similar to eBay's checkout as possible just to avoid confusion. Stats shared by eBay with a few top third-parties have shown that our checkouts actually perform as well or better, meaning just as many or more buyers complete the checkout. This is amazing, given the fact that our checkout has considerably more features—especially for sellers opting to use their own merchant accounts to accept credit cards. One advantage to using our checkout is it helps keep us free. We're able to more effectively offer shipping insurance or product warranties, for example, to those that sell electronics.

I was hoping you could explain why eBay would change the feedback policy so dramatically against its sellers. There is more abuse now than ever.

Schlicht:I have to agree with eBay on this one. The buyer is their customer. And buyers don't want to be told they are wrong, get a negative or be rated by the seller. When buyers feel poorly treated, they don't come back to shop again. I certainly don't want to go shopping at the mall and then, after buying something, have the merchant tell me I'm lame. I wouldn't shop there again and neither would most people.

We all know the buyer isn't always right—but as sellers, it's a good business practice to act as if the buyer is always right. eBay is just forcing you to do that

I don't know any other business where the seller gets to rate the buyer and leave commentary. We all know the buyer isn't always right—but as sellers, it's a good business practice to act as if the buyer is always right. eBay is just forcing you to do that. It's painful, I know, but I think it's the right thing. And yes, I say this knowing just how strongly some of you feel otherwise about it. By stating my opinion I might cause some people reading this to not use Auctiva, but this is still my honest take on the matter.

With this change come some potential abuses, as buyers can attempt to extort sellers. It's eBay's responsibility to curb that buyer behavior and make sure it doesn't become a problem. This is the part eBay was behind on. They came out with the new policy without solid and reliable ways of ensuring the safety for the sellers. I believe they have been working to improve this, though, and are considering sellers' feedback and making improvements.

I have been using Auctiva for a while now—sometimes when I am away from home via a wireless connection. But sometimes I cannot get connected, and therefore am unable to use the site. Are there any plans to have the site available offline?

Schlicht: No. The only way to do so would be desktop software. We were one of the first two desktop listing tools. I wrote the original Auctiva product in 1998, called AuctionPoster98. We later renamed it Auctiva Poster and many sellers still use it today. I wouldn't recommend it though, because it does not have all the latest features of eBay. Those using it have a system down and apparently don't use those features. I won't go into the many problems of desktop software but there are many—the biggest of which is getting people to install it and keep it updated.

Is there any chance of adding Skype links to the templates?

Schlicht: You should be able to do this yourself by using a custom template, but I'll add it to our features list. No guarantees though, as we have literally hundreds of requested features. Each release we prioritize these, adopting those that we can complete in the specified timeframe and that the most users would like to see added. Most sellers don't see a benefit to Skype, given the price of the items they sell and their profit margins. I can see how for certain select items offering Skype in your listings could be beneficial.

I really appreciate the opportunity to contact you directly. Auctiva frustrates the heck out of me, but I love the way my listings look. My question for you is, will we ever be able to talk to a live human being by phone? In order to understand your process, it would really help to be able to have an actual conversation. The text chat is just too slow.

Schlicht: It's already possible, with a caveat. You need to have a certain feedback rating. We simply don't have the time to talk to every customer. Generally speaking larger sellers have more experience and are better suited to supporting over the phone. If we were to support users with a 0 feedback, for example, you can imagine that we'd be on the phone constantly with most of the questions being about what to sell, what times to list, and all sorts of other basic eBay questions. Small sellers thus get support via our support form only. Medium sellers get both chat and support-form support. And larger sellers get phone, chat and support-form access. We do have a lot of video and text tutorials available on our help page. I'd look over those first. If they don't help, you can file a support case on the form, or keep trying chat.

How about an announcement option that would automatically add the same text to all active listings? This would be useful for vacations or weather conditions. I am in hurricane territory and a quick statement about shipping delays due to weather could be useful.

Schlicht: Great suggestion. Sadly, this has been on our feature wish list internally I think for the entire three-and-a-half years since we created the product. It's one of those things that would be nice to have, but it's always hard to justify the time to include the programming of it, so it is consistently passed over.

Will Auctiva ever make it possible to create auction listings within the parameters of eBay Motors? Keep up the great work, and thanks for the opportunity to offer our suggestions and for providing an excellent service.

Schlicht: To list an item with eBay Motors, choose eBay Motors on the top right selection box of the lister page. We also support eBay parts and accessories, eBay U.K., AU, CA and Germany, but you need to select those in that box. The default is the eBay U.S. site.

Hi! I am wondering how the Auctiva templates will integrate with the new eBay listings format.

Schlicht: Yes, we've been battling eBay over this for months and are happy they saw our side of things and elected to allow wider templates.

Greetings from Warsaw, Poland. I wanted to ask whether your page will be available in German or other languages?

Schlicht: Yes, we just added the ability to list on eBay Germany in one of our recent releases. Please choose from the drop-down selector box at the top right corner of our lister page. We don't yet support listings in German, however we plan to in the near future.

You can ask Jeff your own questions by e-mailing him at "AsktheCEO" at the domain. Not all questions will be answered, but those selected will be published with Jeff's responses in future Ask the CEO articles.

To get more insights from Jeff about Auctiva, eBay and the business of selling online, follow him on Twitter.

This article has been updated to clarify references to listing on eBay Germany.

About the Author

Auctiva staff writers constantly monitor trends and best practices of those selling on eBay and elsewhere online. They attend relevant training seminars and trade shows and regularly discuss the market with PowerSellers and other market experts.

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