What Happened to eBay? | Chris Malta's EBiz Insider Podcast

Chris Malta's EBiz Insider Podcast

From the late 90's into the late 2000's, eBay was actually a decent place to make some money. It was just people selling stuff to people, and all was right with the world. Unfortunately, Meg Whitman left eBay in March of 2008. That's when eBay started to slide downhill.

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EPISODE TRANSCRIPT

Let's talk about the question that more and more eBay Sellers are asking more and more every day: What happened to eBay?

To do that we have to start with a little history lesson.

From the late 90's into the late 2000's, eBay was actually a decent place to make some money. It was just people selling stuff to people, and all was right with the world. I was very involved with eBay back then. I was an eBay Developer Partner. I was a speaker at their national eBay Live conventions. I spent years as a regular guest on eBay Radio. When eBay wanted info and content on Wholesaling, they called me. In about 2006, they asked me to write a book about how to find stuff to sell on eBay, and I did. It was published by McGraw-Hill and is still in bookstores today, although I would not recommend it now, because eBay has gone seriously downhill since about 2009.

I firmly believe that the driving force behind all the things that were GOOD about eBay in those days was Meg Whitman, eBay's CEO back then. On her watch, the eBay Partner Program was created. eBay Educators were trained and certified to help potential sellers. Outreach programs for disadvantaged people who wanted to start a business were created. The eBay Radio Show began. The "eBay Live!" national convention was created. The 'eBay Bible" was written.

I met Meg Whitman at the eBay convention in Las Vegas in 2006, when I was there as a speaker. Very smart person, and very interesting to talk to.

Unfortunately, Ms. Whitman left eBay in March of 2008. That's when eBay started to slide downhill.

eBay is a price-driven marketplace. It's like a flea market, actually. Everybody who shops there is looking for deal and bargains; they all look for the lowest price. That was okay when it was just people selling to other people back in the glory days. That marketplace tended to correct itself with respect to general pricing.

After Meg Whitman left and the new management took over, it seems that the people running things got greedy. It started to look like everything was about earning more money for eBay in any way possible, even if it was at their Sellers' expense.

The 'eBay Live!' conventions were shut down. The training and partner programs were shut down. eBay University was shut down. Regulations got more regulatory. Customer Service got less customer servicey. Fees went up, more and more each year. eBay stopped backing up their sellers as much as they used to during problem resolutions, and started siding with the buyers much more often.

Sometime in about 2009 I was contacted by eBay and asked if I would work with one of their groups, to teach them how wholesale companies operated and how to properly communicate with them. I figured, "Great, eBay wants to learn more about how wholesale works!" That couldn't be a bad thing, right? So I did what they asked. Later on, I learned what they had really been interested in. They had started a project which, if I remember correctly (don't quote me on this) they internally called the 'Enterprise Project'.

They basically opened a back-channel into eBay and began contacting wholesale and manufacturing companies, and invited them to come in and sell directly on eBay. Under assumed Seller names, so that nobody would know who they really were. In other words, eBay was no longer just people selling to people; it became more and more about wholesalers selling to people, but most people didn't know that.

The effect is that eBay has been flooded with wholesalers who can sell at much lower prices than individual eBay Sellers can. That's a terrible thing for eBay Sellers. In fact, more and more eBay Sellers are complaining that they can't find cheap enough wholesale sources of products to beat their competition on eBay and make a profit. Those Sellers blame their wholesalers for that. The reality is that eBay Sellers simply can't compete against other 'Sellers' that they don't realize ARE wholesale companies.

As I said earlier, eBay has always been a price-driven marketplace. People looking for the lowest prices. Searching for what they want, then clicking the "Sort By Lowest Price" button. So of course eBay Sellers can't compete, because the wholesalers will always have the lowest price!

It's important to understand that the worst place you can possibly put a home-based retail business is squarely in the path of the most bargain-hunting consumers. That's a given no matter where you're selling because home-based business owners need real profit margins (at least 20%) to sustain a business, and 30 to 35% to grow that business. That doesn't happen in ANY bargain-hunting, price driven marketplace. Add direct wholesalers into the mix, and you can forget it. At this point, in my experienced opinion, eBay is no longer a place where a home-based business owner can make any significant money. YET...there are HUNDREDS of "Make Money On eBay!" programs, tools and systems out there, many that sell for thousands of dollars, run by sniveling weasels who know they're lying to you.

There are OTHER programs and systems that tell you that eBay should be a PART of your online business, along with Amazon and your own Website.

Anybody who knows this business knows that's post-digestive dog food, because price-driven marketplaces like eBay and Amazon do NOT mesh with properly marketing-driven businesses like Websites. But the weasels lie to you and sell you that junk for college-tuition-level money anyway.

Don't you believe them. For bargain hunters who SHOP on eBay, things have gotten BETTER.

For the home-based business owner who tries to make a serious full time living SELLING on eBay, it's game over.

For MUCH more home based EBiz info you just won't learn anywhere else, check out my FREE EBiz Insider Video Series at Chris Malta.com

Thanks for listening, and I'll catch you next time.