What eBay Could Learn From Boeing Aircraft – Part Two

This is a promised follow-up to Yesterday’s post. You can scroll down the page to read that one first if you missed it.
Yesterday’s post generated both a lot of hits –so many that my server jammed up for a while, and a ton of email. By far, most of the email said I was on to something. One person wanted to nominate me for President.
A couple of folks who follow the aviation industry pointed out that Boeing’s new Dreamliner is far behind schedule and encountering technical problems. Indeed they are correct. The technical problems have to do with two major issues. The first is that this new generation of jet is really pushing the state-of-the-art in carbon fiber technology. The second is that the plane is being made simultaneously in five different countries. This has caused delays when mating the parts. Thankfully, Boeing is delaying the production until these issues can be fixed. Continuing the analogy to eBay; If eBay screws up we all lose some sales and profits. But if Boeing screws up –well let’s agree you wouldn’t want to be on that particular airplane.
I did here from some folks inside and outside of eBay who told me that part of what I suggested was actually happening. Apparently eBay has been sending out some of their managers to spend a day with eBay sellers. If eBay is doing this with a handful of sellers –that’s good.  If eBay has actually started a large organized program whereby their managers are spending days with a large representative groups of sellers –from small, to medium to large then that would be great!
I also received notes from folks in the know who said that eBay is making a concentrated effort to listen to sellers more and that they have done a lot of surveys and gathered data from sellers.  This is also good. I truly welcome eBay listening more – all companies should listen to their customers. However, the issue I raised in yesterday’s blog goes beyond listening. The whole point of what eBay could learn from Boeing was to point out the value of collaboration.  There is a big difference between listening and involving.  Boeing truly involves their customers (the airlines) in their design efforts.  The level of involvement is quite different that just surveying and listening to your customers.
I hope eBay keeps listening and I encourage them to do more –but eBay needs to take the next step where you actively involve eBay sellers in the process of changing eBay to meet the hard reality of today’s online marketplace.
eBay management’s primary duty is to its stockholders. The legal term for this is called fiduciary responsibility. But one of the ways to carry out fiduciary responsibility to stockholders is by recognizing the broader community called stakeholders. It is a generally accepted business principal that when the stakeholders win the stockholders win also.
Who are the stakeholders in eBay and how do they fit into the equation?
Stockholders – First of course are the stockholders and bond holders. They have a financial stake in eBay and expect eBay to run the company in such a way to maximize profits. Stockholders today are of course interested in growth of sales and profits as these tend to maximize their returns. But more and more stockholders are also interested in other factors such as social responsibility, environmental awareness and corporate philanthropy.
eBay Sellers – We eBay sellers are eBay’s customers. We pay the fees that generate eBay’s profits and the stockholder’s return on investment –not the buyers. Those of us who make either our living, or a substantial part of our income on eBay, have the most to lose if eBay fails –so that makes us a major stakeholder.
Third Party Solution Providers – this group is another important stakeholder. These are the companies like Vendio, Inkfrog, Auctiva, HammerTap, Bidsniper, Buysafe, Sellathon and others who do all the things that eBay, doesn’t, can’t or won’t do. Obviously these folks have a direct stake both in eBay and the success of the sellers.
eBay buyers — One could argue that the folks who buy on eBay are not really stakeholders. They don’t really have any stake in eBay. If eBay were to go away tomorrow, they could still buy their iPhones, DVDs and Baseball trading cards from other online venues. However I would argue that to both eBay, and us sellers, they are the most important stakeholder of all. eBay buyers may not have a direct stake in eBay beyond the ability to find bargains and enjoy a different type of shopping experience –but we sure have a stake in them. If buyers start deserting the site we all lose.
There are other stakeholders as well including eBay’s vendors, shipping companies and the local community where eBay is located. But the stockholders, eBay sellers, eBay buyers and the third-party solution providers are the most important to the success of the larger stakeholder community.
So having been critical of eBay over the past few months –let’s all pause and take a deep breath because this in one airplane we are all riding in together.  As sellers it is critical that we recognize that eBay does have problems. Yes, some of them are due to their own missteps, but others are due to factors beyond their control.
Here are some of the realities eBay –and therefore us sellers are facing:
1. Slowing growth of new members – eBay is still attracting new members but not nearly the rates it had in the past. Some of this slowdown was inevitable. You can’t keep growing at unsustainable rates forever or pretty soon the whole world would be a member. But there is such a thing as growing too slow. This was starting to happen.
2. Members leaving the site — eBay haven’t shared this data with me but it was pretty obvious to all that many eBay members who had bought in the past were not coming back again. This goes right to the heart of what eBay calls improving the buyer experience. If we don’t do this we are all toast.
3. Fraud, Deceptive Sellers and Counterfeit Merchandise – I lumped these three together as they are all interrelated. eBay was started on the premise that most people are good –and they are. That has borne out eBay’s philosophy.  But the problem is that while “most” people are good, not “all” people are good. When eBay had 50,000 active sellers, if 1% of them were bad you were talking about 500 bad sellers. That is a manageable number and can be policed. But when you have 2 million sellers, that same 1% equals 20,000 “bad” sellers.  And 1% is being generous. I suspect the percentage of bad sellers was probably higher than that at some times. Although the amount of fraud on eBay was vastly overstated by the media, it was still there and as eBay grew it began to affect more and more people.
4. Competition – It goes without saying that online competition has increased. It’s not just Amazon. There are also the shopping engines and major retail corporations selling directly online. And other auction sites have popped up. Despite the success of Bidz.com and the minor success of Overstock.com, very few of them are getting traction on a large scale, but added together it’s kind of like a PacMan game with all of the marginal players taking little bites out of eBay. After a while, the bites add up to a chunk.
5. Online buying habits have changed – The online buyer of today is more savvy, more trusting and more comfortable buying online today than they were 2, 3 or 5 years ago.  Despite the small amount of fraud on eBay, by far most buyers knew it was a safe place to shop. But today there are lots of safe places to shop. And this relates to the buyer experience. When buyers have a less-than-perfect experience there are now plenty of safe places for them to go.
I could go on –there are other factors as well, but these are probably the major ones eBay is reacting to.
And that brings us back to the point. We sellers have to recognize that these are real issues for us and for eBay. The whole point of the Boeing analogy is about involving your customers more in the process of fixing these issues. eBay needs to go beyond just listening and take the next step that would actually get sellers involved in the process.
There are some very bright people at eBay. I have personally met many of them.  And, I have no doubt they are motivated, dedicated and want to do the right thing –but it may be a case of too many MBAs, Dataheads and Accountants –and not enough street smarts that are getting in the way of their success. There are thousands of extremely bright, highly motivated and savvy sellers who would love to part of designing the 787 Dreamliner version of eBay. All they have to do is send us a ticket to San Jose.

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