The following blog post provides basic, wise advice on how to avoid eBay / PayPal email scams.
"eBay and eMail Scams" at keep my engine running…
If you are interested in eBay, this blog is worth keeping tabs on.
Related blog posts:
"Top 10 Tips to Avoid Phishing Scams and Identity Theft"
"Richard Clarke’s Views on Identity Theft" at Fraud, Phishing and Financial Misdeeds
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:
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.
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?
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.
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.
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.
Core Capital Partners, one of buySAFE’s venture capital investors, is pretty active this quarter. It was announced last week that Core is leading a $10 million round of financing in Covega Corporation.
One of buySAFE‘s investors is Core Capital. Core Capital is a $370 million fund located in Washington, DC. Core has been a fairly active investor in 2006, and this week, it was announced that Core led a $4.4 million Series B investment in Inlet Technologies.
For those of you that know me, you know that I appreciate inspirational quotes, poems and stories. Life is a complicated journey, and personally, I believe one of the keys to success in life and business is learning from others and their experiences.
As Otto von Bismarck once remarked…
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