Ars Technica Posted an article today about the effectiveness of the Ebay sellers boycott.
If you are unfamiliar with the story, Ebay in an effort to compete in an increasingly competitive marketplace decided to do two things:
- Change their fee structures, which will benefit some sellers and potentially hurt others.
- Eliminate negative feedback from sellers about problem buyers. Problem buyers are a huge problem for some sellers on Ebay.
Some sellers were furious about these changes and decided to mount an organized boycott of Ebay last week.
I’m not going to debate whether this particular event – the boycott – had any impact or not, I’m going to give you what I think is the core economic lesson here…
If there is money to be made selling what you are selling on Ebay, then someone will sell it on Ebay. It might not be you, but someone will fill your shoes and render your boycott meaningless.
If you’re right, and Ebay has changed the rules so sellers can’t run a profitable business on Ebay then you’ll leave Ebay permanently and no one will backfill your position because they can’t make money either. Ebay will suffer and the business will go to Amazon or some new marketplace.
For years, sellers have complained about other booksellers pricing books for a penny on Amazon. And it hasn’t changed, because someone has either found a way to make money selling books for a penny (we haven’t) or there is a constant flow of people willing to give it a go. Either way the internet company (Ebay or Amazon) would be foolish to change the rules in favor of the sellers and make an imbalanced marketplace. It is in the market’s best interest to facilitate the transaction with as little interference as possible.
In fairness to Ebay, it appears there is apprehension on the part of some buyers to leave honest feedback on Ebay because they fear retaliatory negative feedback from sellers.
In fairness to the current sellers, Ebay is gambling with your business. If they are right, and the current rules favor sellers over buyers, they will gain market share. If they are wrong, they will lose market share, and it should open new marketplaces for you to sell your wares. Unfortunately, in the meantime, you’re a pawn, because you don’t own the marketplace. Right now, the only choice you have is to stay or to leave. I suggest sticking it out, seeing what happens, because it might not be that bad. You never know, it may increase the number of ‘good’ buyers and result in an unexpected windfall. However, if it is bad, you can always leave later.
Remember, historically, when you go on strike, even when you win, you rarely come out ahead in the long run, because during the strike you leave too much money on the table and the economic conditions which forced the conflict will ultimately control your destiny if you don’t change. The best antidote is to keep your eyes open for new opportunities and position yourself for rapid change.