Originally Posted by
MetalPedaler
Ebay's motivations and dysfunctional actions are like those of Congress- they seldom make sense. (In fact, it almost seems like both organizations are being run by the same idiots).
Ebay was a recession-proof business with no competition. When CEO Donahoe came on-board, he openly declared that he wanted to get rid of Ebay's "flea market image" and go head to head with Amazon. Why anyone would want to take on a formidable business such as Amazon, which they were NOT in direct competition with, is beyond me- but that is what they wanted- so they proceeded to wage war on the very people who had built Ebay (The small amateur sellers).
Their love affair with mega-sellers isn't working out too good. Their partnership with General Motors [in an effort to make Ebay Motors a virtual nationwide dealer showroom] didn't last long. Many large retailers have also jumped ship- Neiman Marcus being the most recent. And of course, all these big retailers and e-sellers, like Buy.com have their own websites, and their only interest in using Ebay and paying extra fees [although not as high as you and I would pay- as they get a discount] is just to lure more people to their own sites after an initial sale on Ebay.
So you're right- it doesn't make sense; Give the big sellers a substantial discount; lose PayEnemy revenue, because all the big retailers/etailers can process credit card payments directly; lose customers who are lured to the seller's website after the initial transaction; etc. etc. But that's Ebay- NOTHING they've done in the last 5 years makes any sense to a reasonable and intelligent observer.
Donahoe is an advocate of/practitioner of "disruptive innovation"[Google it if not familiar]. His actions sure have been disruptive; and not the kind of innovations that anyone would want to brag about....but rather, the kind which require "creative accounting" to justify.
A smaller business having taken Ebay's course of actions, would have failed by now; Ebay, being huge and having benefited from being there first, is like many other large giants which have gone down recently- seeming too big to fail....but in fact, their death is just ever so slow and protracted- like James Cagney being shot and staggering two blocks.
If you think about Ebay's calculus...it is no different than other corporations....vol. X margin = profit. It like a big poker game.
When ebay enacts rules that alienate membership, they have to extoll more margin to derive the same profit.
Perception here on the 41 seems to be...the pendulum has swung too far in favor of the buyer. Perhaps with Paypal fee's, the buyer is who ebay tries to protect...versus sellers....or ebay believes if buyer's flee from the market..worse than losing more sellers because of uneven playing field.
When anybody here takes exception to ebay's practices...look no further than the bottom line for ebay. We just don't see it...but the guys at the controls sure do and what steers their decisions.