Saturday, February 9, 2008
Daryle Lambert: eBay Changes Will Bring on New Opportunities in Online Auctions
Before eBay, I had the idea for an online auction. But with no technical experience or people that were knowledgeable, this thought soon vanished from my head. This may sound like an Al Gore story, but it isn't. Why couldn't this work, I kept asking myself?
Then, along came eBay, and it answered most of the questions I had about the possibility of doing sales on the net. Even though they struggled through their first few years, they were able to capture the largest part of the Internet market. Their fees were rather reasonable at first, and the risk of using their services compared favorably with the conventional auction houses. Knowing what I had learned being in the Securities Brokerage business, I thought this was too good to true. And it was. Once eBay got to the place that their business was stable, they began to raise their fees. Today, they are in competition with the auction houses to see who can charge their customer the most.
This came as no surprise to me, because I knew these companies have to please their stockholders, and know very little about pleasing their customers. Can you imagine what the decline in the value of eBay stock has meant to their top stockholders like Meg Whitman? Yes, she knew it was time to go, because the customers were beginning to rebel over the excessive fees. Checking her stock transactions just in 2007, she was able to pull hundreds of millions of dollars into her bank account by selling off a percentage of her holdings. Why should she stay with the sinking ship any longer? The stock has been as high as $40.73 this year, but today it sits at $28.02. With her options, this might mean a loss of a billion dollars or more to her. In my opinion, the future for the customers of eBay will be no brighter than it is now. The company will have to continue to raise their fees, and possibly even more than usual if the stock market doesn't begin to smile on the company more favorably.
Why am I writing about this market and the trends that are developing in it? I have shared with members of the 31 Club, since last year, that competition is coming to eBay's dominance in this market. Now my prophecy is coming true with companies like Online Auction, that we have featured, and a new developing company being organized that will have direct online auctions, where you will be able to raise your paddle just like if you were at the auction house but with far less cost. I will be bringing you this information as soon as it becomes available, as well as any other news that will tend to make your business more profitable.
This country boy says, get ready. The tides are changing, and there's power in changing tides. I believe this competition is going to be very favorable to the sellers who have often been forgotten in these markets today.
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