I found this article by the New York Times, eBay’s Strategy for Taking on Amazon, which explores eBay’s efforts to challenge Amazon. This is particularly interesting to me, because in September of 2013 eBay radically altered the commissions it paid third parties (like eWillys) who send buyers to it’s website. Since many of us have bought or sold on eBay, I thought I’d explain this a little.
Prior to September, if someone clicked on a link from eWillys, visited eBay, bid on an auction (or purchased something), and won, I’d receive a commission. For me it was a good way to generate a little money and motivated me to find unusual items on eBay that I thought would interest folks. For eBay, it’s a good way to encourage niche sites to send them high quality traffic. It was a win-win.
However, in September eBay altered the formula. Instead of awarding commissions based on a time frame that might have tracked a user over a 7 day window, now eBay will only pay a commission to a 3rd party if they purchase (buy-it-now) or win an auction within a 24 hour period. As you can imagine, there was a flurry of angry discussions from eBay traffic partners who watched in stunned amazement as their earnings suddenly plummeted by 50-80% (some were earning 10s of thousands of dollars). The overriding argument for the change was that eBay was transitioning away from auctions to a buy-it-now mentality.
In fact, in the article I mentioned at the start of the post, the New York Times claims that auctions currently represent only 30% of the purchases made on eBay. Even more interesting is how eBay is using its systems to act as the technology provider for large brick-and-mortar companies, such as Home Depot and Toys “R” Us. The company is becoming more and more focused on retail buyers and stepping away from their original core utility: auctions.
http://www.nytimes.com/2013/12/22/magazine/ebays-strategy-for-taking-on-amazon.html?_r=0
