The eBay Experiment and 21st Century Luddites

About 2 years ago, I suggested in a guest lecture at a company flogging a e-commerce platform to prospective clients that eBay was a natural platform to run an Internet retail business. There were sound business reasons to do so (although naturally the platform vendor wasn’t exactly wild on the idea).

Fast forward to the present and eBay is replete with big brands and small businesses exploiting the eBay proposition with  a great deal of success. eBay offers great coverage. It’s a site that various search engines’ algorithms acknowledge to have some clout (through all their various elements, including social signifiers) and therefore items that are offered on there can receive substantial uplift in their visibility – on eBay itself and on search engines too. Let’s say you’d be mad not to give it a go.

So think about the situation some internet retailers have found themselves in recently. Chatting with some of these entrepreneurs who are keen on British and European design, I got to find out about attitudes of suppliers to these retailers. A few years ago, they said they would find it difficult to get some suppliers to sell them stock ‘because they were not a real shop’. This, despite upfront payments and not by account. Fast forward again a few years and the situation has changed. But not in a meaningful way.

One retailer described how a supplier wouldn’t allow them to stock a product range, “because your eBay shop cheapens the brand.” This from a brand that is regularly found in TKMaxx at the end of the season (or during the season even). I’m not decrying TKMaxx because I think it serves an important purpose, but when you consider that many retailers on eBay sell their full ranges at full RRP, you have to question the currency of some product and brand owners thinking.

Another retailer was obliged to sell the goods from one brand at full price on their website (“maintains brand equity in the mind of the purchaser“) whilst the same brand owner also allowed Amazon to retail the product at one or two pennies above wholesale price, and whose products subsequently found their way into the cheap shelves at every Sainsburys. I don’t blame Sainsburys one bit for grabbing this bargain

At a time when shops are shutting down all over the UK, you have to ask why product and brand owners are stuck in this mindset. One brand claimed that web sites and eBay stores were “difficult to police compared to being able to vist a real world high street store.” Sending a rep around 1000s of little shops sounds like hard work compared to an afternoon clicking on several hundred very visible web sites and eBay stores.

We just want to support the British High Street,” claim the manufacturers and brands. Well it’s clearly worked so far. These brands clearly have no understanding about what customers really want. Plenty of research states that people defer to Internet retail and eBay not because it’s cheap but because that’s the place where the bloody goods are. It’s not online or eBay that’s killing the High Street – it’s the customer experience, including customer service, parking, product availability and so on. Comet had a web site – didn’t save them.

How about making sure your precious brands are manufactured in the UK instead if UK jobs are so important? After all – these goods aren’t cheap. Surely there’s room in your margins to have goods made here. Here endeth the rant.

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