Competitors Lure Sellers Away from eBay

As the Internet matures, and the number of affordable ways for online retailers to find buyers increases, eBay appears to be facing stiffer competition.

More online vendors are foregoing eBay and deciding to go it alone by drawing visitors to their own websites. Or they are turning to other online venues such as Amazon and Overstock.com.

Dane Carlson at Business Opportunities points to a recent Wall Street Journal article examining this very issue:

"In 2002, John Wieber started worrying about his business, which sold refurbished computers through Internet auctioneer eBay Inc. Although he was earning $1 million a year in revenue, profits had started to slip as competitors flocked to the site. EBay also raised its fees, further cutting margins, and fraud was becoming a problem.

So Mr. Wieber revamped his Web site and began selling through other online companies, such as Amazon.com Inc. and Yahoo Inc. Last year, his sales neared $5 million, but his eBay revenue grew at a much slower pace, making up only a quarter of the total. It will likely fall still lower. Of the auction site, where he got his start, Mr. Wieber says: 'Too many sellers, not enough buyers.'"

The article goes on to note that other online services like Amazon and Google are enticing sellers away from eBay using an old-fashioned tactic: hands-on customer service. Amazon and Google employees actually called one of the sellers and offered their help.

This is not an unusual occurrence, actually. A colleague of mine who runs a large holistic health site reports he was called by Google, offering help in placing AdWords in the site.

Things are changing among many of the big Internet players, and a new emphasis on customer service and wooing sellers appears to be among those changes.