| Story from Wall Street Journal
eBay's 'Elite' Sellers Seek
More Clout, Coddling From Site
By NICK WINGFIELD
Staff Reporter of THE WALL STREET JOURNAL
May 7, 2004; Page B1
Last week, in an event that was perhaps the first of its
kind, about 100 big eBay Inc. sellers -- many of whom
tote up annual sales of more than $1 million using the
auction site -- gathered for an independent meeting at
a Manhattan loft.
The vendors, whose wares are as diverse as Ferragamo
shoes and Ducati motorcycles, had called the meeting to
air their mounting gripes against eBay and discuss ways
to gain bigger influence over its policies.
"The relationships we forge here will be our strength,"
said Joe Cortese, founder of the group, which calls itself
the "eBay Elite."
eBay sellers have been known to balk when the auction
site raises fees, amends its rules or makes other changes
that affect vendors' businesses. Now, with yesterday's
tiny sellers exploding in size, some of them are determined
to organize. For months, more than 500 of eBay's most
prolific sellers have joined an invitation-only online
discussion group to vent about eBay's fee increases and
listing procedures, as well as fraud protections and other
concerns.
The group, which may form its own trade association,
signals eBay's evolution into an important cog in the
nation's small-business economy. The San Jose, Calif.-based
company's site is a virtual storefront to roughly 430,000
part-time and full-time sellers, the vast majority of
them family or individual operations.
eBay's own business, which is based almost entirely on
fees it earns from sellers, continues to be one of the
most profitable on the Internet, and faces little immediate
threat from rivals. Some veteran sellers, by contrast,
face cutthroat competition from a mushrooming eBay community,
as well as shrinking profits. As a result, they are questioning
how large their businesses can become on eBay, and they
would like to see the company do more to help them.
"There's a disconnect between the numbers we see
from eBay and the group's experience," said Mr. Cortese,
a stamp and coin seller on eBay from Pittsfield, N.H.
It isn't clear how much impact the eBay Elite can have
on the company's decisions. At the meeting last week,
group members acknowledged that their collective auctions
still represent only a sliver of the $24 billion in gross
sales by merchants on the site last year. (eBay's revenue
in the same period was $2.17 billion.)
Past efforts by eBay sellers to mobilize -- notably,
a "million auction march" of listings to another
site in 2000 -- didn't go well. eBay accounts for upwards
of 90% of the Internet auction business, though other
sites like Amazon.com Inc. and Google Inc. are helping
small retailers to better advertise their Web businesses.
eBay said it is happy to listen to the concerns of the
group, though it won't place more value on the feedback
it gets from the eBay Elite than it does from smaller
sellers. eBay itself hosts a number of forums for eBay
users, including "eBay voices," a series of
focus groups in which it flies about a dozen users to
eBay headquarters about eight times a year. The company
also organizes a trade show called eBay Live that drew
more than 10,000 attendees to Orlando last year.
"If we have one issue, it's with the name for this
particular group," said Hani Durzy, an eBay spokesman.
"We don't consider any one particular group to be
the elite of eBay."
The group's moniker was the subject of considerable debate
at the eBay Elite meeting last weekend, with several attendees
saying it sounded arrogant. Other names under consideration
are the Professional eBay Merchants Association and, in
recognition of the growing business members are conducting
outside of eBay, the Professional E-commerce Merchants
Association.
Indeed, the group wants to avoid a confrontational approach
to get a bigger foot in the door at eBay. So far, the
vendors plan to form an advisory board that would meet
regularly with management to discuss issues of particular
importance to big sellers, such as customer service. It
plans to outline those topics in a white paper that it
will present to eBay in the coming weeks.
But reaching a consensus on key issues won't be easy,
especially given a seller community than spans from German
antique dealers to jewelers in southern California.
eBay's fees, for instance, are a hot button for many
sellers. As it stands, eBay sellers pay comparable fees
on individual auctions, whether they sell one item or
20,000 items a month. eBay has imposed several increases,
most recently boosting by around 10% the charge to list
certain items sold on its U.S. site.
Many large sellers want eBay to offer volume discounts
on fees so that they can reap some economies of scale
in their businesses. Yet some eBay Elite members say they
like eBay's egalitarian philosophy. "I firmly value
the level playing field," said Andrew Evan Green,
a seller of telescopes and other merchandise in Silver
Spring, Md. "It's this approach that's made it possible
for hungry sellers to compete with the Dells."
Mr. Cortese, eBay Elite's founder, said he's inclined
not to push eBay for volume-fee discounts, but may press
to gain other concessions, such as better customer support,
instead.
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