As many of you know, one of the primary ways I have been "making a living" for the past 15-odd years is through having a couple of (sometimes more) online businesses that primarily are conducted through eBay.
eBay has changed a lot through the years. When I created my first account there in 1998, it was more or less like a giant online garage sale and collectibles market for individual traders all over the world.
What was so cool about it was that whether you collected Beanie Babies, MTG cards or antique pottery, suddenly you had a means by which to access thousands of fellow collectors all around the world... and suddenly there was an open marketplace for buying, selling and trading.
What will YOU harvest?
Growth Means it Goes to Shit?
In time, what I have come to see as the "inevitable" evolution in a westernized capitalist market came to pass: Individuals got increasingly squeezed out, at the hands of large organizations and corporate sellers.
I tend to think of it as the "WalMart-ization" of an industry.
And — ironically — the last time I ordered office supplies on eBay, the seller actually turned out to be Sam's Club, a division of Wal-Mart!
Now, I'm not going to editorialize at length on the process, I'm simply going to point it out.
eBay is currently in the final phase of "WalMart-ization;" they became a publicly traded company. Effect? The focus now shifts from "providing a product/service" to "maximizing profits at all costs to satisfy investors."
Having worked for a couple of startups that became Fortune-500 companies, I have experienced that process, up close and personal.
All in all, I'd rather be on the beach...
So You Should Just LOWER THE PRICE!
So to circle back to what got me in a slightly "ranty" mood, one of eBay's newest "features" for sellers is that they keep track of your listings, and if someone adds one of your items as a favorite, eBay shoots you out a message saying "Your items have be put in shopping carts! Lower the price now to make the sale!"
With so many small business people "barely making it," in the first place, knocking 10% off the price of something only serves eBay's immediate goals: To increase their sales, so they can collect more seller fees, so their can keep profits growing and keep INVESTORS happy.
Of course, it's a short term strategy with more sinister long term implications.
Sure, I could knock 10% off my price to some people, but here's the thing: It's a kind of "Creeping Elegance." eBay incurs little risk, I'm the one agreeing to cut my profits.
What's more, the price doesn't go back up to where it was before if the potential buyer doesn't respond within a reasonable time... it stays at the lower mark (unless I go back and manually change it). And then next time the lowered price item ends up in someone's shopping cart, what do you think will happen?
Yup. eBay will shoot me a note, suggesting I "LOWER THE PRICE" to make the sale.
Walking in the woods...
Anger vs. Sadness
Many of my fellow small sellers are just angry about this new trend.
Inevitably, some sellers are going to be desperate/hungry enough to lower their prices; so indirectly eBay is "guiding" the overall market lower with its new strategy.
Meanwhile, sellers keep getting notified that in order to combat rising costs, seller fees and other services keep nudging UP in price.
And shipping, and packaging, and electricity and what the heck else anyone uses in the course of running their business keep going UP.
I actually feel more "sad" than "angry" at the whole ball of wax.
From where I am sitting, it comes back to the whole "short term thinking" and "instant gratification" mentality we even deal with here on Steemit.
How can you expect to "Build For The Future" if you keep over-harvesting the present? You CAN'T!
Metaphorically speaking, SURE you can harvest and sell every last bean in your bean field to squeeze out a few more dollars of profit, but because you didn't preserve some of the beans to sow for next year's crop, you'll starve to death next year. But sure, you made "record profits" this year. Congratulations!
Thanks for reading!
What do YOU think? You may not be an eBay seller, but do you experience "short term thinking" in other contexts? Have you seen a "squeeze" between rising business expenses and continual pressure for lowered prices? Where do you think that's going to come from? What do you think the outcome will be? Leave a comment-- share your experiences-- be part of the conversation!
(As usual, all text and images by the author, unless otherwise credited. This is original content, created expressly for Steemit)
Created at 180922 17:10 PDT
Published via SteemPeak.com
It would seem that the only place you can compete long term, without being faced with race to the lowest possible price, is in personalized service. People will always pay a higher price when individualized attention is a part of the transaction. And not the annoying kind through a third party who automates it.
And that is, in general, the primary thing that has kept us going.
We can do, find, and provide things for people that you simply can't get from an automated warehouse where your order is packed by a robot.
"The automated kind" made me laugh! I was reminded on sitting on a phone to some "customer service" department, listening to "Your call is IMPORTANT to us!" over and over again... very clearly is it NOT, or I wouldn't have been on hold for 42 minutes!
In my jewelry supplies business, my edge has always been "no waste." I deal with a lot of small independent jewelry makers who are pretty broke, themselves. I can sell them "exactly 13" of something they need, that's only available in a "box of 100" from a megasupplier. So they appreciate the personal service. The "squeeze" becomes that it takes just as long to pack a $4 order as it does to pack a $40 order.
Their whole system is selfish, it’s like they’ve sacrificed the relationships they have with sellers, who are like the backbone of eBay and are gearing towards making more sales.
It’s harmful strategy in the long run when they realise that business is about people than it is about the sales or the money, there are many things wrong with eBay in the seller side, fixing those would boost their relationship up and then those sales will start coming.
Make it easier for seller to make sales not cheaper sales.
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As organizations grow and become BIG, they have a tendency to move from a focus on people, to a focus on numbers. And the competitive trend is that they would rather make 50 cents each on a million sales than $50 each on 10,000 sales, even though the bottom line is identical. The automated "50 cents each" option tends to preclude people because you can't go to the supermarket and get anything for 50 cents.
And that's how a lot of individual people are going broke, or close to it, even while "the economy" is allegedly doing well, or so the economists tell us.
I’ve heard the same thing about Etsy. I used to love buying original pottery and clothing on there, but now it’s all mass produced crap from Asia with the lowest quality materials and construction.
I suspect that the only thing that stops the squeeze is what they call Blue Ocean; you start something so unique that you have no competition. That works until the cycle repeats.
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It's kind of true of Etsy, as well... and they "went public" a couple of years ago.
Question one becomes "How do we increase revenues?" And the unspoken answer tends to be: By completely ignoring our mission, values and principles... and only focusing on profit.
Yeah, I'm familiar with the "Blue Ocean" principle... but pioneering is super hard (done it three times!), and usually someone with better funding comes in and displaces you, as soon as you start to make money.
This is why I retired from business consulting. It's late here and time for me to go to bed, but the short of it is that I eventually saw that there wasn't enough blue ocean left out there for new "bootstrappers" to reliably have a chance. It was more a factor of luck unless you could enter the market in a high barrier to entry manner. Meaning you needed to either have lots of your own money or that special formula venture capitalists are looking for (which generally also begins with investing at least $50k of your own money to show you're serious).
In reality I have a much more metaphysical take on all of this, and have positioned myself accordingly.
In general, I do, too. My wife and I both do... which presents its own set of challenges, when it comes to living with the reality of the "3D world." We always amuse ourselves with the fact that the electric company (an energy provider) actually doesn't give a rat's rear end about "energy" (as we think of it)!
LOL!
Oceans to puddles.... emotions to glances... one day we will reach out but everything and everyone will be so far away we will no longer be able to reach.
We live in amazing but often despairingly shallow times.
Yes, they are amazing and interesting times @jaynie... sometimes I lose a little of my enthusiastic edge because the type of peaceful and harmonious coexistence I strive for seldom seems to get me anywhere. Which kinda sucks.
So I end up sharing words across a chasm with someone... in South Africa. I'm glad we can still reach through something like this to those of similar ideals!
same thing with the book market.
you should take it as an example.
e-books by Indies are going for $3.00...
hardcovers by 'professionals' were going for $25.00 up.
...................
hmm...how'd that work out?
The book market is a tricky example.
Now ANYone can publish their own e-book.
That's cool and convenient.
But is the average writer better off or worse off than they were when manuscripts had to pass all manners of editors and standards to be published?
Were the royalties better?
Now ANYone can publish their own e-book
3D printing comes to mind. How long will it be before ANYONE can print ANYTHING...for free?
But is the average writer better off or worse off than they were when manuscripts had to pass all manners of editors and standards to be published?
The average writer (like you or me) never got noticed. If what they wrote wasn't politically correct and went thru an agent it was never read, much less published.
At one time the Hugo Awards were recommendations for good Science Fiction. I've been reading scienfiction since the late fifties. Now the Hugos are anti recommendations...what NOT to buy...unless you like to read sermons.
Were the royalties better?
You only got royalties if you were published...(see above)
sir denmarkguy! isn't this kinda like etsy where all the best little producers are forced out eventually? Is there any other places to sell your stuff than ebay? someone needs to start another ebay type that will do what ebay and etsy used to do.
I nominate denmarkguy to do that!
Hi @janton! There were those two guys who were trying to create a decentralized marketplace here on Steemit, but it seems like their enthusiasm has waned a little bit. I keep thinking that's what we need more of... marketplaces that exist at a "community" level so we can all trade with each other. The marketplace exists purely as a facilitator, not as a profit center.
yes sir exactly, like etsy and ebay USED to be more like, right? Well, as the platform here grows perhaps it will take hold at some point.
Sounds like a rough long term trend where you find yourself on the front lines.
An interesting parallel and observation i had while reading.... I’ve often wondered why airlines and hotels don’t do the same thing with unnsold seats and rooms the day of the flight/booking. There is a general consensus that this is not done, but the reasons vary. Mostly it has to do with brand image and consumer psychology, although the marginal costs of each passenger/guest are not negligible. So even big companies have to deal with this question of not setting the floor too low.
Enter tech.
Marginal costs of an ad or a listing are nonexistent. The product is you. The supply is limitless. So they don’t have to play by the same rules. Instead they do what you are saying: prodding their customers to race to the bottom. I don’t see an end in sight.
I am not sure there is an end in sight. All the "air" has to come out of the system... and that is not going to be easy, because a lot of people's lives are held up by air.
Take housing. A pile of wood, nails, wiring and concrete + a "fair profit" for a builder might amount to $90,000, and yet the finished house (even considering land) in Seattle might be $750K, of which $600K is "air."
In your airline example, Scandinavian Airlines actually used to have something like that, flying from Copenhagen. They were called "green departures;" but you had to show up at the gate at departure time with NO guarantee you'd be on a flight... a sort of ultra standby. But if they had ten seats at the end, they'd let ten people from the waiting area get on a $300 flight for $75 or something like that.
Rent seeking behavior once again :D
That's really interesting! I think cruises will do something similar for last-minute cruise deals, probably because their marginal costs per passenger.
SideNote: somethings I don't LIKE to buy from corporations. I want to buy from individuals.
I'll pay a premium to do so.
/ᐠ.ᆽ.ᐟ\
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I really do agree with this and it's sad that it is the inevitablity of every new online market.
I used to sell some of my prints and one offs and little sketches on ebay. IT was a fun way to take some of my studies or smaller works and find homes for them and the earnings were a good sort of 'side business'. I haven't done that in years though.
I'm not sure where we are headed in this ever increasing digital world but I suppose we shall just have to wait to see what comes to pass.