Saturday, May 22, 2010

Rakuten, Inc. - What is Next for Ebay?

"Spring Walk"

I posted this on a UK blog this morning and felt it was good enough to post here on its own. As sellers are hearing the news about the giant Japanese company Rakuten, Inc. buying up - they can't help but wonder what this will do to Ebay and its three year destruction path called "disruptive innovation." I'm hoping something great will come of it. What is needed here is stiff competition and I'm hoping Rakuten will become just that. I'm sick to death of hearing the excuses about auctions not being popular or that the economy is to blame. Underneath it all perhaps bad management and the wrong business model are to blame?

My post: I think you’ll find that here in the States we are pretty much for the underdog…the downtrodden. The idea that Ebay was a place where the elderly, the disabled and the stay at home moms could earn some money was worth supporting, and make no mistake auctions are pretty much alive here. Ebay, in the last few years, has managed to kill the excitement of auctions and destroyed the feeling of community that was so alive on the site. They’ve pitted buyers against sellers and driven off some good decent small sellers at the whim of buyers having a bad hair day! Ebay’s reputation is mud here right now.

I feel Ebay would profit from splitting their site – much as Overstock has done. Retail on one side – auctions and fixed price listings on the other. Instead, they try to combine them as Amazon does and its not working. They simply have no skin in that game – they sell nothing but a service and right now they are doing that very badly!

I think Ebay may finally be realizing they can’t make it on retail alone. The competition is stiff, wiley and well-honed. Up against the likes of Amazon they look like what they are – shabby and disorganized. It will be interesting to see what Rakuten will add to this mix. If Ebay does not get back to their roots and their niche as a place where one can find the unique, the rare, the vintage, etc. I believe they will drag on like this for years or until the present management is finally ousted. That’s my take on it after selling on and observing this business for past 12 years.

My painting for today is a watercolor - "Spring Walk"

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