

Ask YC: can we collectively figure out how to neutralize eBay? - dhbradshaw

Consider this a math/strategy/social problem, possibly tougher than any game of chess.<p>Basically, eBay has a monopoly and they are abusing that fact.  Is it possible to neutralize the network effects that protect them?<p>If any group can come up with a viable strategy, why not news.yc?
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noonespecial
You're looking for another, larger dinosaur to come along and eat ebay.
Instead what is likely to happen is many smaller mammals like cragslist and
<http://www.etsy.com/> will come along and slowly make it irrelevant.

They are certainly speeding the process along with their mistreatment of the
most important kinds of sellers and allowing the rampant spam and fraud that
has nearly taken over whole sections.

When ebay began the web was a very different place. The rise of social
networking and basic online shopping awareness will allow smaller niche
markets like etsy to flourish. A reputation system that is portable, secure
and inter-operates easily would be a big plus in this direction but I think it
will happen even without it being fully developed.

I can't wait for an online market of makers that can offer unique, one-off
technology products. I'd gladly trade in my Ipod for a funky handmade OS Ogg
player that did more of what I want and less of what Apple wants. Reputation
built by how many cool things you've made, commissioned items.. Hey there's a
startup in there somewhere!

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Kaizyn
Your suggested approach is flawed simply because it would require all the
little companies to cooperate together on some sort of system.

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boredguy8
You mean like open source or the free market?

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randallsquared
No, like some combination of an OpenID-like system and a search for auctions
and similar things across many sites. Such a thing would probably have to
include eBay to be very useful at first.

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andr
If you want to be the next eBay you need to be radically different from the
current one. You can't just one-up them.

One thing I've been thinking about is using double-sided auctions instead of
the typical second-price English auction you find at eBay. The idea is that
buyers leave bids and sellers leave offers for a particular item class, rather
than for a particular item "instance". For each class of item (e.g., 2GB iPod
nano) you would essentially have a market similar to the stock market. You can
leave an offer or a bid or you can act on a bid or an offer that is already
left by somebody else.

This will be a much more efficient market than eBay, so the forces of supply
and demand will be stronger. Buyers will be able to choose between speed of
sale and profit. On average, buyers will have less of an advantage against
sellers - things will be more balanced.

Overall, this greatly decreases the transaction cost, which is the cost of the
time and effort to research the item, determine the veracity of the listing,
and devise a bidding strategy. In a way, the market has already done the
research for you.

In addition, it removes the wait until the auction expires. If I want to buy
an iPod for $200 and you want to sell it for $200 we can close the transaction
immediately.

The market principle won't be so strong with rarer items, but people will be
able to show demand for rare items before sellers list them.

The major problem is the adequate clustering of similar offers (e.g., all 2GB
iPod Nanos). It needs to be done automatically, so this idea becomes to eBay
what Powerset is to Google.

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dkokelley
I like it. It's a stock exchange except the stock is all physical goods.

Of course as you mentioned there would be clustering of items for this to
work, but the principle of the system is that all items in a category are 100%
interchangeable.

In the stock market one share in X corp. is no different than another share in
the same corp. For 2G iPod Nanos there are very specific differences (color,
usage, markings, etc.) that will deviate unlimitedly.

I guess the way this would work is buyers would know what they want (2G iPod
Nano), see what the going rate is (ask), if interested, make an offer (bid),
and then when the buyer is matched to a few potential sellers, they would have
a chance to look at the _individual_ products to either confirm or deny a
final sale.

A nice benefit of this is that you can see what sort of 2G iPod Nano $90 will
get you (say if you're on a budget), simply by "bidding" $90 on the product
and seeing your matches. If they're aren't any matches, you need to bid
higher. If you have a few matches, you'll probably be seeing some beaten up
iPods, but that's fine - you only wanted to spend $90. With eBay, if you look
for $90 iPods, you'll only see current auctions, and the final price will most
likely be bid up before the close.

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DougBTX
Easy way for eBay to implement this: RSS feeds for searches.

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rsheridan6
The problem, of course, is inertia. Everybody hates ebay, but they have the
buyers, the sellers, and the feedback data.

If I were trying to beat ebay, first I'd separate feedback into another
application. Why should you need separate feedback for ebay, amazon, and other
sites? It should all just be one reputation score, which lets people know
whether you're an honest buyer/seller or a crook. You could import existing
feedback from existing sites.

Second, I'd come up with an app that would allow users to search for items not
just at ebay but at other sites too, in the hopes of attracting users, given
that they would have little reason to help bootstrap a new auction site that
has neither buyers nor sellers.

Third, I'd write an auctomatic-like app for sellers that would have a superior
interface for them to list items at ebay and other sites (Amazon purposely
gives sellers inferior tools for listing items unless they pay $40 to become a
power seller).

If all goes well, I would now have buyers and sellers visiting the site. Next,
I would start hosting auctions myself, which would optionally automatically be
listed if a seller listed an item at another site. My fees would be quite a
bit lower than ebay's or amazon's and scammers would not be tolerated.

Of course, this is all easier said than done... I guess there's a reason ebay
remains dominant after a decade of craptacular service.

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thorax
Note, there exists that separate reputation service-- Rapleaf:
<http://blog.rapleaf.com/about/>

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dhbradshaw
The problem is two-fold: a new site can't attract sellers because there are no
buyers, and it can't attract buyers because there are no sellers.

If the sellers come I think the buyers will come. Here's a potentially useful
question: how can a site be made that is hassle free for sellers and also
eliminates the risks associated with an initial lack of buyers? This may be
easier to do for "Buy it now" sellers than for auction sellers.

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jam
Seems like you may be looking for some sort of aggregator that can interface
with other auction sites (both buying and selling) as well as doing its own
listings.

What's eBay's precedent in allowing websites to repost scraped data from its
listings? It'd be easy as all get-out. My guess is that something like this
has been tried.

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vaksel
The thing is the online auction market has to have a monopoly. Why would a
seller want to sell his item on a site that won't give him the most bidders?

So honestly I don't think anyone can take eBay down. Even if
Craigslist/Google/Microsoft comes out with a free version.

So unless you want to get government involved I wouldn't bother

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jacobbijani
How is eBay abusing their monopoly, specifically?

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SteveC
The first things that come to mind are the raising of fees and locking out
payment methods other than PayPal.

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ckinnan
That's not a monopoly, that's their business model. No one is required to use
eBay. You need to to be more careful when using terms like monopoly and making
charges of abuse.

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SteveC
No one is "required" to use Windows however Microsoft is still a convicted
monopolist. Ebay are certainly using their market leader position to lock out
competitors in the payment system arena. Anyway, I didn't make the claim that
they're a monopoly (the parent poster did that) and personally I'm on the
fence whether they should or should not be considered one. You need to more
careful when accusing me of making such allegations :-P

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HeyLaughingBoy
The problem is you're looking at a generic competitor to eBay while the real
opportunity is niche auctions. There's a lot of stuff sold on eBay just
because it's the default site. e.g., I would love to see a competitive online
auction site for used & new machine tools that could do a better job in this
area.

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notdarkyet
To my knowledge, I believe the biggest deterrent to an online competitor is
the patent itself that ebay is in control of regarding online auctions. Maybe
the method that the auctions are controlled by could be the route taken, but
for the most part I think they have their sector of the market cornered.

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kennyroo
Pierre never patented the auction system. He didn't believe in them at the
time.

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jasonlbaptiste
honestly, it really amazes me no one in web 2 has come up with a recognized
ebay competitor:

google => powerset,mahalo msft => zoho (they're full of fail, but still)

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blogimus
I'm sorry, pardon my ignorance. Why does it amaze you that no one has bested
ebay? I'm not in the least surprised, primarily because of the
traction/inertia that ebay has now. A bit of an orthogonal take: Chuck-e-
Cheese sucks, I mean really-really donkey balls sucks ass, bad food, boring
entertainment, a viral haven, I feel dirty after being there, but parents
still take their kids there in droves. Why? cultural inertia, _because
everyone else does it, we'll do it too_. Stereotype, joe sixpack, soccer mom,
sheep, lemmings, hive mentality, whatever you want to call it, its the same
thing. That is tough to break these habits. I mean, look at McDonalds. I don't
see any redeeming value eating there but tons of people do. Its like the
saying, "eat shxx, a billion flies can't be wrong." OK, done with rant, mod me
into oblivion for bashing our cultural icons.

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notdarkyet
Don't pardon your ignorance because there is none, we should recognize
everyone else's. Forget Chuck-e-Cheese, think of DisneyLand/World. As a child,
people would act like I was deprived and lacked a good upbringing because my
parents could never take me there. I was happy my parents never wasted their
money and instead spent it on more important things. Disney is a money trap
that has successfully marketed their product to convince children and parents
that their children will be lacking if they have not visited their park.

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crystalarchives
Good to hear I'm not the only one who feels that way who had the same
experience.

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Tichy
What happened to that Facebook app that was launched a while ago? I thought it
sounded interesting (trade with your friends or something like that).

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eru
A smaller market - but with built in reputation?

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zandorg
Ebay has radio adverts in the UK. That's why they are of mass appeal - they
can advertise in the mass market.

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daniel-cussen
I think in this kind of situation, the monopoly is so entrenched other
entrants can only have a shot if the rules of the game change significantly or
if ebay makes a really major mistake that makes sellers leave en masse.

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wumi
how long before people start saying this about Google?

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Tichy
They've been saying this about Google for quite some time already.

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asnyder
I own spareshit.com if anyone wants to work with me on it. I haven't had any
time to dedicate to it.

