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“Opportunities and Threats of Online Auctions” – An Interesting Case Study

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On October 1, 2006

In eCommerce, Economics, Online Fraud

I ran across a case study this morning that discusses the opportunities and threats of online auctions, and it specifically focuses on the online auction site, eBid.   

The author is Khurram Memon of DeMontfort University.  I believe that as you continue to wrap your head around what is currently happening with the eBay marketplace and what you can expect with other eCommerce channels in the future, this will be an interesting case study for you to read.

Related blog posts, case studies, and presentations:

What is a “Market for Lemons”?

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On September 28, 2006

In buySAFE, eBay, eCommerce, Economics, Online Fraud, Portable Trust & Reputation Signals, Steve Woda, Trust and Safety

Lemonforsale_1 I have had a number of eBay merchants write me about a post that I made earlier this week suggesting that eBay seems to be displaying the early signs of a Market for Lemons problem (Some would argue it is far beyond the beginning stages, but I will let you debate that with your comments below).

Without focusing on eBay or eCommerce in general, it has been requested that I illustrate a simple example of how a “Market for Lemons” develops.  Obviously, there is a lot of academic research on this subject (I posted a Wharton case study by Dr. Eric Clemons earlier this week, and you won’t want to miss it since it discusses eBay’s challenges in greater depth.), and almost everybody has heard the “Market for Lemons” term utilzed at some point.  Wikipedia provides a basic overview of the Market for Lemons economic concept, so I won’t regurgitate what you can read elsewhere.

In short, the “The Market for Lemons: Quality Uncertainty and the Market Mechanism” is a paper written by George Akerlof in 1970 that describes what happens to markets that suffer from information asymmetry problems.  Ultimately, Dr. Akerlof won the Nobel Prize for Economics in 2001 (along with Michael Spence and Joseph Stiglitz) for his analysis of markets with information asymmetry.  While I was at Wharton, I was fascinated by the implications of this research on eCommerce marketplaces.

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What’s Wrong With eBay? It’s Simple Economics

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On September 27, 2006

In buySAFE, eBay, eCommerce, Economics, Marketing, Online Fraud, Steve Woda, Trust and Safety

What’s wrong with eBay?  Before I answer this question, you should download this Wharton case study by Dr. Eric Clemons of The Wharton School, University of Pennsylvania.  Dr. Clemons is one of the world’s most renowned experts on information economics, and this case study is currently being taught at Wharton this semester.  It goes into great detail discussing eBay’s current challenges, and I believe you will find it insightful.

Okay back to the question…  What’s wrong with eBay?

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How Do You Sell Profitably on eBay?

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On September 26, 2006

In eBay, eCommerce

I have been writing quite a bit lately on eBay, and on the developing stories of lagging buyer demand and poor seller economics.  Every data point suggests that it is tougher to sell profitably on eBay these days, but it isn’t impossible.  There are eBay sellers making a nice living on eBay, and in general terms, the key is to differentiate yourself, to sell products where there is limited competition, and to operate very efficiently.

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eBay Sellers Leaving eBay to Sell Elsewhere

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On September 24, 2006

In eBay, eCommerce, Economics

Yesterday, I mentioned some very interesting research that AuctionBytes recently completed with a survey of more than 1,000 eBay merchants.

The most interesting finding is that eBay sellers are leaving eBay’s platform very quickly.  The chart below details where merchants are currently selling their product, and where they plan to sell product 6 months from now.  There is a massive 64% decrease in the number of sellers planning to sell on eBay 6 months from now versus today.

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Google Planning Product Search for Holidays

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On September 23, 2006

In ChannelAdvisor, eBay, eCommerce, Google, Overstock.com, PESA

The Professional eBay Sellers Alliance (PESA) held its semi-annual gather in San Francisco this past week.  The PESA Summit 2006 was a huge success with many of eBay’s largest sellers in attendance in addition to many of the most important companies in ecommerce.  buySAFE has sponsored every PESA Summit since the group’s inception in 2004. 

Although the group includes eBay in its name, most of these merchants are actually multi-channel retailers seeking to sell product whereever they can make reasonable profits.  These days, that actually means eBay sellers want to sell off eBay.  AuctionBytes has recently produced some very interesting research on the trend to move beyond eBay.  ChannelAdvisor‘s Scot Wingo covered eBay’s challenges on his blog last week as well  I will be writing more about this trend over the coming days because it is obviously important for all of us in ecommerce.

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Fall 2006 PESA (Professional eBay Sellers Alliance) Summit in San Francisco, CA

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On August 21, 2006

In Amazon.com, buySAFE, ChannelAdvisor, eBay, eCommerce, Google, Infopia, PayPal, PESA

The Professional eBay Sellers Alliance (PESA) has announced that its Fall 2006 Summit will take place in San Francisco, California on 9/20/06 – 9/22/06.  I have attended three or four PESA Summits, and they are always fabulous events.  The attendees list includes many of eBay’s largest merchants, and since most of them run fairly large multi-channel operations, these sellers also represent some of the most successful small and medium e-commerce retailers in the world.  Many of the largest e-commerce service providers will also be in attendance including eBay, Google, Overstock.com Auctions, Amazon.com, PayPal, buySAFE, ChannelAdvisor, and Infopia.  Therefore, the Summit is a great business development event as well.

If you haven’t registered for the event, you should do so quickly.  The event is limited to the first 300 registrants.  You can register at PESA’s website.

Top 10 Tips to Avoid Phishing Scams and Identity Theft

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On August 20, 2006

In buySAFE, eBay, eCommerce, Online Fraud, PayPal, Trust and Safety, Web/Tech

Earlier this week, I posted on the subject of eBay and PayPal phishing email scams.  It is impossible to completely protect yourself from the bad actors, but I wanted to share with you my recommendations on how to protect yourself from these types of scams.  The following are my top 10 tips on how to avoid phishing scams and identity theft:

1) Never click on the hyperlinks in emails
The text you see as an email hyperlink may be cloaked or hidden.  The cloaked hyperlink could take you to a website that you weren’t planning to visit.  If you aren’t completely sure of the source of the email, you should simply retype the URL directly into your browser.  This is one of the best ways to avoid fake hyperlinks and the threats associated with phishing emails.

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buySAFE Hits the 3 Million Bonded Product Listings Milestone

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On August 18, 2006

In buySAFE, eBay, eCommerce, Overstock.com, TIAS

There is big buySAFE news this week.  buySAFE passed the 3 million bonded product listings milestone.  The announcement was made on the buySAFE blog earlier this week.

This is exciting because it means that there are more than 3 million items for sale at buySAFE Shopping and bonded by buySAFE.  The Bonded Items can be found on eBay, Overstock.com Auctions, and TIAS.  In a few weeks, you will begin to see Bonded Items direct from merchants’ website stores.  Obviously, the more Bonded Items avaiable for sale, the better the experience for shoppers looking to buy safely.  Therefore, this exciting news for everyone.

Congratulations to the entire buySAFE team!  Nice work.

The Virginia Joint Commission on Technology & Science (JCOTS) Cybercrimes Advisory Committee

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On August 12, 2006

In buySAFE, eCommerce, Online Fraud, Steve Woda, Trust and Safety

I was recently appointed to the Commonwealth of Virginia’s Joint Commission on Technology & Science Cybercrimes Advisory Committee. The general purpose of the advisory committee is to study and advise on key cybercrime issues under consideration by JCOTS and by the Virginia legislature.

The focus for this year’s advisory committee is computer trespass and cell phone spam.
Specifically, we will be studying HB 254 (2006) and HB 1354 (2006) during the 2006 legislative interim.  We will work to determine what changes need to be made, if any, to further refine these bills.

HB 254 ammends the Commonwealth’s existing computer tresspass statute by adding three provisions prohibiting certain forms of spyware. In addition to the three provisions, there was a proposed amendment exempting certain software providers from the three spyware provisions.

HB 1354 attempts to prohibit unsolicited text messages (spam) sent to wireless devices in the Commonwealth. However, both the CAN-SPAM Act and the Telephone Consumer Protection Act (TCPA) regulate certain types of messages sent to wireless devices. This advisory committee will need to determine what types of messages the state may regulate and if there is a sufficient need for regulation at this time.

During our first meeting in late July, the Cybercrimes Committee also discussed ideas on how to combat eCommerce fraud, pharming, phishing and MySpace.com safety problems.

I was very impressed by both the legislators and the citizen advisors. There are a lot of smart folks in Virginia thinking, proactively, about how to make the Internet a safer place for all of us, and I will keep you up to date on our work over the course of the year.

The Cybercrimes Advisory Committee consists of the following members:

Virginia Legislators:

Citizen Members:

Related articles on the Internet:
AuctionBytes
AuctionWire

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