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May 14, 2007

The Online Competition To eBay And Industry (Loss) Leader eBay Express

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Want an interesting trend? Watch this Auction Site count.

http://www.powersellersunite.com/auctionsitewatch.php

eBay
12,616,066
auction listing down from yesterday
April 13, 2007 5:16 pm
Yahoo
1,103,617
auction listing down from yesterday
April 13, 2007 5:04 pm
Bidville
1,052,130
auction listing down from yesterday
April 13, 2007 5:12 pm
eCrater
458,536
auction listing down from yesterday
April 13, 2007 5:06 pm
uk.ebid.net
426,021
auction listing down from yesterday
April 13, 2007 5:03 pm
MightyBids
272,905
 
April 13, 2007 5:17 pm

The above list consists of places having more than an arbitrary quater-million listings.

Interestingly the total number of listings from these non-eBay sites is about a quarter (26%) of the eBay total. Interesting because two years ago, a summation of these places plus others, would have barely reached 10%.

"There are some upon this earth of yours," returned the Spirit, "who lay claim to know us, and who do their deeds of passion, pride, ill-will, hatred, envy, bigotry, and selfishness in our name, who are as strange to us and all out kith and kin, as if they had never lived. Remember that, and charge their doings on themselves, not us." Charles Dickens, A Christmas Carol

The question that eBay would pose is, 'will these sites match OUR size', followed by eBay's answer 'No.'

The non-fantasy question for a business is 'what must we do when the competition reaches a measurable percentage of our size?'  eBay's non-changing response is to increase profitability; increase fees. The competitions response is to increase it's seller base, which in the long term would generate increased revenue*.

* eCRATER is free, but with increased size this will change.

What eBay and it's cheerleaders refuse to realize is the competion need not match eBay's size one-on-one to be a viable opponent.

http://en.wikipedia.org/wiki/Lanchester%27s_law
http://en.wikipedia.org/wiki/Fuzzy_Wuzzy

The Fuzzy Wuzzy Fallacy is a name for a wargaming theory coined by Richard Hamblen in the September 1976 of the Avalon Hill General wargaming magazine, loosely based on historical records of battles between the British and the Sudanese Mahdi. The Fuzzy Wuzzy Fallacy states that a single soldier with 2× firepower or attack strength does not equal to two soldiers with 1× firepower or attack strength. Instead, the soldier with 2× firepower is actually worth \sqrt{2} of the 1× soldier, if either soldier can be killed in a single hit. In fact this is little more than a rehash of Lanchester's law.

As a result, tactics and strategy designed around this theory emphasize greater numbers and time, which the speed and mobility of the units in action can effect.

Basically you can beat a foe being just as large or larger, OR having greater numbers attaching over time. Like the grizzly bear versus the wolf pack.

This being business and not armed combat, eBay is not (currently) literally destroying the competition.  And smaller opponents need not inflict a lethal blow to the larger opponent to make progress.

"Men's courses will foreshadow certain ends, to which, if persevered in, they must lead," said Scrooge. "But if the courses be departed from, the ends will change. Say it is thus with what you show me!" Charles Dickens, A Christmas Carol

Should eBay continue it's self destructive policies*, it will continue to shrink and the competion will continue growing. Excluding Google, in two years the size ratio of the competition to eBay will reach or exceed 50%.

Fuzzy Wuzzy Principle anyone?

* For example killing Stores by pushing the unpopular eBay Express.

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