Could the eBay Diamond Deal Give Buy.com a “Scarlet Letter”?

Written by John Comments
Last Updated October 15, 2008

Hey there! Click to follow me! I send FREE content that includes the latest hints, tips, and "edutainment" research with videos, MP3's, and industry content You might want to subscribe to the RSS feed for updates on this topic.

Ok yeah, that movie version sucked, but the story of a young woman ran out of town with a scarlet letter “A” on her bosom for the act of adultery is one hell of a good analogy for what I read today!

This morning our friend and eBay “watch dog” Randy Smythe (one of my Top 5 eBay bloggers!) from My Blog Utopia posted what feel is a burn burner story. He writes on his blog today a story that is titled On eBay: The Little Guy Can’t Take it Anymore!”

Now after endless protests over the years by sellers on eBay bitchin’ bout everything that eBay has ever changed under the sun and boycotts over price increases, price decreases, listing tools, feedback changes, the color of fingernail polish…blah, blah, blah. This “scarlet” letter simply smelled a little different.

So I had to call Randy up ASAP and get the scoop on what the hey is going on. Randy was so cool that he did an on the spot interview on what I believe could really be a game changing position for eBay sellers upset with the removal of the level playing field and the sweet Diamond Seller positioning on eBay.

I am all for competition on any platform, but I do not like having the scale tipped in ANYONES favor, just cause they are larger. That sucks ass to me, but that is just me. Give this a listen and tell us what you think?

(press play button)

Below is a full reprinting of the letter that was sent anonymously to Randy this morning…

Topic: Why we’re not buying at buy.com

Nobody likes a bully. They push and shove to get their way and don’t care about others. Pretty selfish behavior.

Usually they get away with it too. If they are bigger and stronger, who is to stop them?

Well we can’t speak for patrolling the school corridors, but when it comes to companies like buy.com bulling their way onto the eBay marketplace we believe it’s time to take stand. Together.

Everyone knows that eBay is the best place in the world to find a huge variety of merchandise. It is the self-titled “World’s Greatest Marketplace”. The diversity of eBay’s products is matched only by the diversity of people who buy and sell on the site. In fact, it is these people, millions of them around the country, who actually create the eBay marketplace. Without them, there would be no buying and selling on eBay.

Approximately 1.3 million people make a living selling on eBay. Most are hard working Americans like you and me who are trying to make ends meet in a very tough economy. Some are stay-at-home moms and individuals with disabilities who count on non-traditional jobs, like selling on eBay, to pay their bills.

We applaud all of their efforts, courage and hard work and want to support them.

So who is bullying our hard working neighbors on eBay? They are what eBay calls “Diamond Sellers” and they get special treatment and fee discounts on eBay that gives them an unfair advantage over the smaller sellers who are the heart of eBay.

These Diamond Sellers use their size to push other sellers aside by listing thousands of items and monopolizing the categories they list in so eventually they get most of the customers on eBay too. Not exactly the “level playing field” ideology that was a founding principle of eBay. So Diamond Seller growth is coming at the expense of small businesses who conduct hard, honest work every day…Not cool.

What type of company you ask, would do such a mean thing? I mean what type of a CEO wants to answer this question:

“Do you think it is ethical for your business to enrich its executives and shareholders at the expense of working mothers, disabled persons and small businesses around the country?” Uh, next question PLEASE.

So we would like to ask senior management at buy.com what they were thinking when (based on what we can see on eBay) they decided it would be okay to dump hundreds of thousands of items onto the eBay marketplace in return a sweetheart Diamond seller deal on listing fees?*

* All sellers must pay a fee to list an item on eBay in order to avoid crowding the marketplace with stuff. eBay has historically spoken of how important this listing fee is to ensuring the diversity and quality of products on the marketplace but does not disclose the specific terms given to Diamond sellers.

Do you think buy.com considered the 1.3 million hard working Americans around the country that rely on eBay to make a living? Did buy.com think that a stay at home mother raising children and using her eBay business to help pay the bills would get a job as an accountant instead? Do they think that an eBay that resembles the local mall and only sells homogenized goods from big name retailers is what this country needs more of?

We hope not. We’re guessing they didn’t think about these things at all and maybe it’s not their fault. The eBay team and the buy.com team probably had some meetings. Maybe even a nice steak dinner and they looked at the numbers together and smiled and said, “Hey, we can definitely afford desert now!”

Fortunately it’s not too late for buy.com. They can do the honorable thing and excuse themselves from their eBay “test”. They probably didn’t know how many businesses they would wipe out with this deal. Hopefully they have a better understanding now.

After all, if we wanted to buy from them we could simply go to the buy.com website. Isn’t that the reason they added us to the buy.com mailing list (we don’t recall opting-in to that, hmmm) after we made a test purchase on eBay?!

But until buy.com removes their items from the eBay marketplace we won’t be buying from them. We won’t be buying from them on eBay and we won’t be buying from their website either. We won’t be buying from them now or when we start shopping for holiday presents this year. In fact, we’re not sure why anyone would want to support buy.com at a time when they are putting our friends and neighbors out of business.

After all, nobody likes a bully.

And as for any other large retailers (you know the ones with the huge customer service departments that make you wait on hold for an hour when you call – if you can even find the phone number) who are considering selling their mass-market products on eBay, we strongly encourage them to reconsider.

So, are we calling for a buy.com boycott you ask? No, not yet.

Press "Play" to listen now

Ecommerce edutainment on demand

Be sure to subscribe so you do not miss an episode.

fgc

This may be the letter...

Dear Sir or Madam

It is with regret that I have to inform you that I will no longer
purchase merchandise from your web store, physical store and most
assuredly from your Ebay listings.

I am opposed on principal that a large company should deliberately
(either by ignorance or greed) undermine the incomes of the
housebound, the mothers and fathers, the infirm, and the elderly who
do not have the economic equity to affect direct competition.

The existence of large non-fee paying diamond sellers on the Ebay
platform has had a detrimental effect on the financial position of the
small independent Ebay seller.
Further, that the Ebay platform should be so skewed enabling a large
corporation to exploit the advantages of free listing and free
advertising subsidised by the listings of the small independent Ebay
seller.

Branger

PLEASE see the petition to remove John Donahoe as ebay's CEO by doing an internet search of:

"Ebay Stockholders and Sellers Calling For Immediate Termination of John Donohoe CEO"

at petitiononline.com

Cliff Aliperti

All right, let me try to break down my points made on twitter today in a little more than 140 characters.

I said, "I don't have a problem with a volume discount in theory, but in practice."

To me this is similar to the examples I posted:

Do the people w/the letter also want to personally pay the same tax rate as the CEOs of these co.'s they rail against
Or maybe it's not fair for a wholesale rate card to exist when the little guy is paying full retail?

Buy.com has a lot more listings than your or I, so what I'm asking is would you have a problem with your customer cutting out the middle man and buying the goods you sell directly from your wholesaler at the same rate?

I don't see anything morally wrong with Buy accepting this deal. You wouldn't turn it down and I wouldn't turn it down. This is how life works.

Would you expect to pay the same rate for a tiny classified ad in a magazine as you would a full-page four color ad? Is the bigger company wrong for paying for that extra exposure?

That said, I don't even find anything morally wrong with eBay extending the offer. I see it as a volume discount.

Now here's where I make this confusing. Despite those feelings, personally I realize that the eBay/Buy deal is bad for eBay buyers, sellers and in the end eBay. But the fault lies with eBay for not understanding their own platform and extending the offer in the first place, not Buy for accepting it.

Further complicating my feelings is that I don't have a problem with the letter itself. Do I think it will make a difference? Personally, no. But the tactic worked with eBay Australia and Nextel, so it's a natural step to take and well worth a try. I also don't put much validity in it being an anonymous letter--that will hopefully change. I mean, hell, who's to say someone w/Google or Amazon didn't pen this thing out of spite?

I think what's going to have to happen here, as mentioned in John's interview with Randy above, is that Buy.com is going to have to find out that any deal with eBay is not worth it financially. I don't think individuals are going to be able to make much of a difference here, I think the eBay market will naturally take care of.

That's all just this one man's opinion. I say best of luck to the letter campaign, while at the same time I don't agree with much of it's content.

Thanks,Cliff