if (time spent hunting) is large but (cost of item) is small, then it's a good deal. If (time spent hunting) is large but (cost of item) is almost the same as buying fixed price, then ...
When ebay was just starting out, it was mostly people who wanted to get rid of their junk. It was stuff they were going to throw out anyway, and it was laymen who didn't always know how much things were worth.
So it was possible to get really good deals if you looked.
Now that ebay is saturated by people who are selling as a business, the variability in prices is much less. It has become too much a hassle to do the auction process, and the benefit of doing so is no longer as great as it used to be.
The concept of online auctions is not a fad. Ebay just got colonized by scammers and spammers, that's all.
Some people enjoy the hunting! I think Omidyar decided that eBay would be huge when he watched people aggressively bid up his broken laser pointer. The one person I know who used eBay significantly talked way more about his sniping strategies than about what he ended up getting with them.
I think some math needs to be done on what the optimal auction structure is given participants arrive and leave at random times.
The english auction with a reserve price that is employed by ebay is equivalent to most other auction types in revenue given typical assumptions, but with people coming and going all the time and auctions taking days rather than minutes the typical assumptions aren't satisfied and perhaps a different method would be better.
My idea is to do dutch auctions rather than english auctions; that is, list a high price that decreases through time. That way every price is a buy-it-now price and bidding becomes less time-consuming. Also, it would eliminate the sniping behavior that is so common on ebay.
They're so entrenched though I'm not sure just having a better auction style will be enough to get traction.
> I think some math needs to be done on what the optimal auction structure is given participants arrive and leave at random times.
EBay implements a second place auction which works well given that all participants may not be present at the same time. It counter-intuitive but it has been shown that a second place auction generates the same revenue as a first place auction, partly because participants compensate for only paying the second highest bid. Indeed, the second place auction system can sometimes cause a bidding fenzy, which leads to auction addiction.
However, a simple application of game theory is to minimise information the is revealed unnecessarily. Therefore, if you treat the auction as a sealed bid auction and snipe in the last minute then you save money.
However, the main problem with EBay is the glut of uncontested auctions. I ran a survey on auctions using a script and I found that less than 1/3 of auctions received any bids at all. Much fewer received two or more bids.
I'd still like to buy things cheaper. The problem with ebay is that things are rarely cheaper than they should be. And for buying things new, Amazon has WAY better service (money back guarantee, insurance against item loss, easy payments, ...).
For me, eBay was never about the auctions. I could care less about auctions - they're usually more of a nuisance than anything. It's about finding low-cost surplus or used products in a structured and organized shop.
It's a one-stop antique store, swap-meet, and Crazy Louie's surplus store. I'd much prefer for the sellers to lower their prices to attract the customers, rather than vice-versa.
If that's what they'll eventually evolve into, good on them.
The niche eBay serves: you want to get rid of something, but you want to not be the guy who sold for $5 what turns out to be a $500 collector's item. My guess is that those $500 collector's items are now mostly in the hands of the collectors, so that product isn't as great as it used to be. The fixed-price sales could take advantage of eBay's existing audience, but if the article is right, they've ruined that by letting their reputation system get out of whack. They're still valuable as a niche service for regret-minimization for sellers, and a ready supply of goods for antique retailers.
eBay is still much more than an auctioning service. It's a lightweight platform for anyone-- store owner or housewife-- to sell absolutely anything. The structure itself is fine, it's the community that's been poisoned. eBay needs stricter enforcements on its weaknesses: sniping, shipping costs, and PAYPAL. eBay needs to cut Paypal off with a sword and start clean. Call it something else because I will never trust that name. Never in my life has transacting money been more difficult and dangerous. The interface, the communication with the staff, and the rats that use it.
I don't think eBay has continued to innovate in the auction space. For instance, I often want to bid across multiple auctions until I can get something for the price I want. eBay has something to do this (called Bidding Assistant I think) but I found it to be inflexible and difficult to use. Now that the novelty of auctions has worn off, they need to improve the productivity/appeal of them.
I hoped that they'd solve a superset of this problem where you want a set of items from one of more sellers. This arises because some sellers split items and each item gets different but overlapping auction period. You'd prefer to buy two or more complementary items from the same seller because they match and because combined shipping may be cheaper. However, if a vastly cheaper complementary item finishes in the meantime then you'd be a fool not to bid.
ebay will probably turn out to be like the shopping channel. CL needs to improve its signal-to-noise ratio or risk losing core users to social networking sites.
total cost = time spent hunting + cost of item.
if (time spent hunting) is large but (cost of item) is small, then it's a good deal. If (time spent hunting) is large but (cost of item) is almost the same as buying fixed price, then ...
When ebay was just starting out, it was mostly people who wanted to get rid of their junk. It was stuff they were going to throw out anyway, and it was laymen who didn't always know how much things were worth.
So it was possible to get really good deals if you looked.
Now that ebay is saturated by people who are selling as a business, the variability in prices is much less. It has become too much a hassle to do the auction process, and the benefit of doing so is no longer as great as it used to be.
The concept of online auctions is not a fad. Ebay just got colonized by scammers and spammers, that's all.