Friday, February 16, 2007

Can EBay Be Used as a Customer Acquisition Tool?

Sellers! Change Your Thinking About EBay!

Let's talk about Customer Acquisition as a concept. Sellers who sell on eBay need to change their mindset, even sellers who are presently happy with the world of eBay. My suggestion is quit thinking of eBay as your home on the Internet and start thinking of it as a marketing tool. You are not "eBay sellers" you are online sellers who happen to sell on eBay. Repeat after me; I am an online seller and I sell on eBay -- I may need to start a 12-Step program for eBay sellers --remember, even if eBay is presently your only sales channel, you are using eBay to bring you customers. This change in thinking is crucial if you are to take control of your business. Change your mindset. You sell online! I know it can be difficult, but eBay is changing and right now we don't have a clue what it will ultimately look like. Look out for your business, eBay is looking out for theirs.

Ebay still brings tons of high value traffic to their site-after all they are the world's largest auction site, but the times "they are a changin" now that eBay has introduced Sponsored Links, purchased, and announced they are adding listings to CORE search, I believe it is becoming clear they want to become to shopping what Google has become to search-Google's recent innitiaves with GoogleBase and Google Checkout may hasten this change, but that is yet to be seen. Whether or not this actually happens sellers need to start looking at eBay as an acquisition tool rather than a destination. The key to this strategy is to open your own webstore/website for your product. Because of the lack of transparency in eBay's Store Referal credit, eBay stores should not be considered your webstore but a marketing tool just like CORE auctions. If eBay ever develops a transparent Store Referal system then sellers may be able to consider an eBay Store over their own independent website.

Pardon me for a brief diversion OT: In Oct. I wrote that eBay Stores should become a hosting solution that feeds listings to multiple marketplaces and should have it's own shopping cart. There are currently far more eBay Stores than they will ever hope to have with ProStores and eBay Stores are much easier to work with. eBay could charge sellers a tiered monthly hosting fee based on inventory in their store and let them list according to their own marketing plan. Each TSE would have its own listing profile and listing/FVF fees. If sellers choose not to list on these TSE's, that will be there decision, they can find some other way to get shoppers to their Store items (Google AdWords or possibly Yahoo Sponsored ads on eBay). Enable sellers to feed their listings to eBay CORE, Stores, Express,,, Motors, Classifieds etc.

Since there is no movement by eBay to implement an idea like I've detailed above and there is no business reason to market to a Store that charges 10% FVF I would suggest launching your own WebStore. There are many WebStore options at present and many more on the way that offer low cost entry. MonsterCommerce, Yahoo Stores, Amazon WebStores, and eBay's ProStores offer entry level WebStores. These stores will help you list your product and facilitate transactions but be aware they are not marketing tools. You will still need to do the work to bring shoppers to your listings.

So, how can you bring customers to your WebStore from eBay? Unfortunately, since the eBay marketplace is very unsettled at this time I'm not going to mention hard and fast rules for moving eBay customers to your website, but I will provide some basics. As the "New" and I hope improved eBay is unveiled I can get down to more specifics. If I read the tealeaves correctly, eBay might be facilitating customer acquisition in the future, so if you have your own webstore now you will be able to quickly make use of the new eBay (of course maybe I read those tealeaves in my dreams).

In 2005 we launched our own website at We had limited expectations for the first year, and we spent a great deal of money to develop the website and integrate it with our software, much more money then I expected or what I would suggest anyone else spend. My plan was to take the first year to grow sales at the website organically by reaching out to our existing customer base, through word of mouth, and through SEO (Search Engine Optimization). I was pleasantly surprised that we soon had regular sales. There wasn't a day that went by that we did not sell five or more items, not 900 to 1,000 a day like our eBay sales, but an acceptable start for a new website. Because we had been losing money since early 2004, we could not spend anything on paid search so growth was going to be limited. (I believe, had I made the decision to launch the website a year earlier I might still be in business selling media products today just probably not on eBay. What do they say? Hindsight is 20-20.) Unfortunately we also had some problems with SEO so all of our web business came from word-of-mouth or existing customers. At this time I didn't have a clue on how to move our eBay customers to our website other than the basic ideas of including our web address in every email, etc.

That experience, though, taught me some very important lessons and revealed some roadblocks in marketing to our existing customer base. Over our five years of selling on eBay we had built up a customer database of over 400,000 buyers, but we found it very difficult to move a large chunk of our eBay customers to the website. We had good success with eBay newbies and some longtime regular customers but the vast majority of our customers preferred eBay. We offered shipping incentives and lower prices on the website but not much worked, so I began to analyze the problem and came to the conclusion that the problem was the eBay buyer.

Ebay buyers are a unique crowd: They are very comfortable with the site and are generally not inclined to try something new like a website. EBay is the only real venue for auctions (I know this upsets some of you, but it is true), and the majority of eBay customer's purchase through auctions. EBay's feedback system also keeps those customers coming back to eBay because they want to see the unique feedback number increase. If you get a chance, look at some of your current customer's feedback and check their feedback received from sellers. You will more than likely see feedback from your competitors, which means those customers bought from your competitors too. This happens a lot in the Media Category. One other barrier to moving customers to your website is eBay's TOS (Terms of Service). Please read it carefully, so as not to violate any rules, though I suggest you get as close to the edge as possible.

Fortunately, for sellers listing on eBay today, some of these issues are changing. Today's EBay buyers are more willing to venture out to other sites because of a decrease in trust in the eBay marketplace. It may take several orders before they move completely but if you treat them well they will be more inclined to try you again over an unknown seller on eBay. New eBay customers are your best option, you can identify them by their low feedback. Often, low feedback buyers scare sellers; I would suggest these are the buyers you should target. Your regular customers should be easier to move as long as your WebStore/WebSite makes for a pleasant shopping experience.

So, now that you have changed your mindset you can look at eBay as you would Google Adwords, or Yahoo Paid Search or any other marketing tool. In fact with the introduction of sponsored links in search you can now send eBay customers to your webstore and away from eBay.

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