Will eBay bounce back?

What the heck happened to eBay?

A few years ago many of us were complaining that finding “it” online was the final nail in the coffin of every brick and mortar shop around. A recent Associated Press report now states that eBay subsidiary PayPal could overtake the giant online marketplace in gross revenues by 2011. It’s not that surprising since eBay remains an online marketplace and PayPal has the capacity to be used everywhere for a variety of goods and services.

But why isn’t eBay projected to grow in lock step with PayPal? After all, we who stood by the behemoth when it required us to accept PayPal for every transaction dutifully signed up and paid the fee for the right to do commerce on eBay.

The crippling snag is likely due to a slew of major site and policy changes that occurred at the same time as a calamitous worldwide financial meltdown.

During the past two years eBay has worked to develop new ways to claim their rightful share in the millions of transactions through its sites. EBay had every right to find new ways to make money from the site – business is business. However, the difficulty came when it started to over regulate the transactions and encourage sellers of antiques to “get in line” or get out.

What makes eBay most successful for sellers is the massive flow of site traffic. The extra bells and whistles added on to a seller’s listing are nice but they wouldn’t be worth squat if eBay didn’t attract so many millions of unique users. It’s what is separating other startups with feisty fee structures from becoming the No. 1 Web site for selling antiques and collectibles online. However, there is a downward trend at eBay. Just last month AuctionBytes.com’s Ina Steiner reported eBay’s August-September site traffic has hit a five-year low.

Many of my favorite dealers packed up and left – some in the middle of transactions. One situation I remember vividly: I was all set to buy a framed print when the seller told me in a response to one of my questions that he was no longer selling eBay … right now. He blamed the overly aggressive changes to feedback policies, among other changes. He hasn’t been back since.

So as PayPal breaks into new and growing markets and methods for making payments (some predict we’ll be using our cell phones to buy antiques at brick and mortar shops in just a few years) where is eBay supposed to grow?

Will the threat of losing its valuable site traffic encourage it to rethink some of its policy changes? Even if major changes were reversed – would they be enough to bring sellers back when the economy rebounds?

Eric Bradley


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