eBay's Secret Sauce

from the social-capital dept

Business 2.0 has a very interesting look at what they call, eBay's secret sauce: "social capital". They point out that if you had no inventory, no salespeople, no debt, and your customers handled all of your shipping and kept your other customers honest, you'd be profitable too. However, they say it's more than that. It's the "social capital" that eBay has built up among their users - and which it now has to work to keep. As we've pointed out before, eBay keeps doing little things which seem to piss off its core users. While eBay has been doing a lot to respond to those complaints - and often seem to back down from unpopular decisions, they do seem to be a little cocky about their position as well. They quote one VP saying, "We have the technology, the marketplace, and the buyers. Why are you going to do it on your own? Nobody visits your site." That sounds like something someone might regret saying after a company collapses... However, the article does a good job pointing out the difficult job eBay has to do walking the line between individual buyers and sellers (their old line customers) and corporate sellers who seem to represent the future. At points, the article veers towards dumping a bit too much praise on eBay and even comes close to suggesting that eBay really has discovered the fabled (and discredited) "new economy". With the number of ultra positive eBay articles these days, it does make you wonder if they're being set up for quite a fall. Update: Because everyone needs to talk about how wonderful eBay is, here's the EcommerceTimes article on what makes eBay invincible. In their analysis they say a lot has to do with the simple site design.

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