Tuesday, March 10, 2009

Leaving eBay successfully... Is it possible?

It was October, 2006, and I was preparing to leave eBay. Paypal's "random" screening freeze on my account had practically ruined my feedback in less than 2 weeks, and there was no way to recover on a new ID or one of my old ID's in time to salvage my repuation. Preparations were in order. I had contacted my sales rep with my supplier to let him know I would be ordering far less, contacted my past customers to tell them about my new venue, and setup an account with a couple other payment processors. By January, my $30,000 online monthly sales fell to less than $300, and my offline sales slumped after Christmas. I was frazzled, fried, and fed up in less than 3 months.
Where did I go wrong?

There's a big hurdle that a former eBay seller must prepare to jump before leaving eBay. The world of online business is in reality nothing like eBay.

There are customer loyalties that don't match eBay shoppers. For instance, a customer on eBay may buy the same types of products from a different seller each time, while they will only buy that product from one or two independent merchant sites. The reason is, that these shoppers ARE loyal, but loyal to eBay - not to the seller. Have you ever had anyone tell you, "I bought this from eforcecity (or other major eBay seller) on eBay? No, likely they just "bought it on eBay." A customer may be a loyal shopper of Overstock.com, NewEgg.com, and eBay.com. But that shopper may not really care if they buy from these companies or a private seller on their sites.

Before the loyalties even start, a departing seller must be able to prove himself as reliable and trustworthy. I know very few sellers who started right away on eBay selling a high volume of Plasma TV's, but they may have been able to start selling HDMI cables to build their reputation and feedback first, moving on later to the high end products. The same is true with an independent website. A merchant must be able to prove that he is reliable, which can be accomplished in a few simple ways. Remember the HDMI example, and follow this story:
I begin selling handmade leather jackets on a website, but my prices are over $200 each and I haven't been live long enough to build a reputation. Here are 3 options to build trust before being able to sell my jackets.
1. I can run giveaway freebie contests and run keyword ads to promote them. This can work, but even a minimal advertising campaign will reap few immediate rewards.
2. I can give rewards to customers I carry from eBay when they refer new customers. This may work, but would they really put much effort in if they still have to get their reward by spending more money? I could possibly do better by adapting this into an affiliate program paying $5 for each new customer they refer.
3. I can start by selling belts and custom patches for about $25-30, and build my reputation on shopping sites with my merchant reviews. I could even offer free shipping on a future order for each customer that reviews my site, good or bad. Advertising budgets would be kept to a low rate, and I could get to know my customers early through post sale surveys. Who knows, I may even open up a whole new market in leather for myself.

Many leave eBay and think that their regular customers will loyally follow to their new sites. I have yet to witness more than a handful of examples, such as eMovieposter and Bargainland, who were able to pull this off successfully. When I shop on eBay, I don't care about anything but price and feedback. If I bought from that seller before, great, if not, I will hope it goes well.

Last is maintenance. Not maintaining your descriptions and products, but your customer accounts. All a customer expects is for you to deliver their order on time and offer an easy return policy if things go wrong. That's it. It's not complex, but many businesses make it more complicated than it should be.
1. "Sorry, the supplier is out of stock." This doesn't cut it with a customer waiting on their sister's birthday present. The real heroes of ecommerce will fill any backorder from a competitor, even if it means losing a few bucks. That customer receives the email stating, "Do not be concerned if your package arrives in a New Egg box. We made a mistake on our inventory count and are out of this product. We have ordered from a different merchant to ensure timely delivery of your order ot no extra charge to you." Most times, that customer comes back, because it is pretty unlikely that New Egg would do the same to serve them. Even if they start shopping with New Egg, they probably weren't coming back if you didn't fill their order elsewhere. It's a calculated gamble that works most of the time.
2. "Our business hours are 8-5, Monday-Friday." Well, I hate to tell these businesses, but I won't shop there. I don't shop at those times because I work too. If I have a problem, I want to talk to someone quickly, and since I work during their business hours I am out of luck. Honestly, who only reads email 5 days a week in any business, other than sites that outsource all labor from communication to fulfilment.
3. "The product must be returned in new condition, and a 20% restocking fee will apply. Shipping is non-refundable, and you must pay return shipping." They just lost me. If I get something and change my mind within a couple weeks, I want a refund. Their price of return is nearly not worth the effort to return it. Unfortunately, this is normal with thousands of merchants, and they strictly follow their policies.

eBay is a business opportunity, not a way of doing business. Needless to say, it is far easier to build business off eBay while still operating an eBay selling account, but it is possible that after the fact you can start fresh, leaving eBay behind. Just as with all that has been said about leaving eBay, if Foot Locker decided to leave a shopping mall, would the entire foot locker customer base travel somewhere else to shop with them? Probably not, and the shoe stores that are still in the mall would take the extra business gladly. But you can take on a whole new world of online shoppers who never shop eBay, but still don't have loyalties to any particular merchants and businesses. Attract and cater to them, and you can build a long road of success without eBay.

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