Why is the market share shrinking?
When was the last time that you saw a really Awesome Deal on evilBay.
(not to be confused with really stupid stuff that you see every day)
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"When was the last time that you saw a really Awesome Deal on evilBay.
(not to be confused with really stupid stuff that you see every day)"
I don't know...I offer "Awesome Deals" all the time. A few months ago, I bought of big box full of Lenox China accessories from two discontinued patterns for $25, or about a buck a peice. All the other sellers were consistently listing some of this stuff for $150 to $250 per item...and not selling it. So I cut their prices in half and every piece I've listed so far has sold within a week. Who am I to say a covered butter dish at $75 isn't an awesome deal? My customers surely thought so. Granted, I scoop my Land-O-Lakes margarine right out of the plastic tub, but you know...just sayin'...
"If their business was growing they would not need to raise fees.[duh]"
Something you fail to understand is that businesses rarely raise prices becuase they "need" to. They raise prices because they "can". If a business is viable, it will only keep prices the same...or lower them...when there is significant push-back from the consumer or significant competition, neither of which is apparently the case with ebay. There are the Alt Sites, but they cater to a niche market at best, and more often than not, a niche of a niche.
"Since eBay's actual market is shrinking the only way to increase profit is to raise fees.
If their business was growing they would not need to raise fees.[duh]
Why is the market share shrinking?"
There's a difference between a "shrinking market" and a "shrinking market share", and they may or may not have a direct effect on each other. The market for buggy whips has been shrinking for quite some time as fewer and fewer people use them anymore. The same is true for land line telephones. However, Samsung's Android smart phone has been kicking Apple's iphone's butt lately, taking more and more of Apple's market share. Does Apple lower it's prices when it releases a new model iphone? No. Why not? Because with an expanding market, Apple can loose market share and still make plenty of money.
The same holds true with ebay. It can afford to loose market share to the Alt Sites nipping at its heels, all the while maintaining or raising its fees. To carry the Apple/ebay comparison further, just as Apple expanded into into other businesses (itunes, ibooks, etc.), ebay has expanded with PayPal, StubHub, GSI and the like. That's just smart business...realizing there is a finite point where a core business will reach the limits of its market and can no longer expand, and then branching out into other markets. Remember, Harley Davidson sells more in T-shirts, key chains and coffee cups than it does in motorcycles.
The entrepreneur always searches for change, responds to it, and exploits it as an opportunity.
--Peter Drucker
