Big eBay Seller Vanishes
Posted by: Rob Hof on February 06, 2006
Just a few months ago, Glacier Bay DVD was crowing about becoming one of eBay’s very top sellers, with the highest positive customer feedback rating of any merchant on the marketplace. Today, despite having amassed some 268,199 feedback ratings from customers over more than six years on eBay, it’s gone. Or as they say in eBay parlance, NARU’d—“No longer A Registered User”—which can mean everything from merchants simply quitting to eBay kicking them off for not paying bills or getting too many complaints. (Update: eBay says it can’t comment on why Glacier Bay is now NARU, but a spokesperson says it was eBay that took the action.)
What happened? eBay’s online forums are buzzing with mostly uninformed speculation, but maybe only owner Randy Smythe knows for sure. And he’s not talking. The phone number on his domain registration for glacierbaydvd.com, which is now a blank page, is out of service, and he hasn’t returned an email request for an interview. The auction news site Auctionbytes, which just reported the disappearance, apparently wasn’t successful in reaching Smythe either.
But gleanings from the eBay community indicate that the merchant had been struggling for some time to contend with a glut of new entrants into media products. …
Although sudden disappearances of large sellers from eBay appear fairly rare, they're not unknown as eBay grows and attracts more and more sellers. (Another top seller, electronics merchant BuyEssex, was NARU'd sometime last year.) Indeed, some observers believe that while the exit of large sellers can't be construed as a good thing, turnover generally is inevitable and even healthy for the marketplace: It may be an indication that new sellers, bringing more efficient techniques, are continuing to try eBay. "For every seller who goes out of business, there's 10 to fill the void," says Scot Wingo, CEO of ChannelAdvisor, whose selling services Smythe used. "Where there's demand, supply will find it."
Wingo wouldn't comment on Glacier Bay DVD specifically because of that relationship. But he said a number of large DVD sellers on eBay are now offering auctions that start at rock-bottom prices, then charging higher shipping to make up for the loss on those auctions. That, he says, has made it tough for merchants trying to sell the DVDs themselves at a reasonable profit. Smythe told me the same thing about seven months ago, vowing to move more of his business from eBay to his own Web site as a result.
Wingo believes that shipping problem may ease when eBay Express, a new method of selling on eBay that's more like traditional retail, debuts this spring with pricing that includes shipping automatically. But Wingo, and other eBay sellers, think the make-it-up-on-shipping practice has conditioned bidders to expect lower prices.
In any case, that's not the only problem Glacier Bay may have run into. Jay Senese of Jayandmarie, a CD and DVD merchant who is also one of eBay's largest, thinks that Glacier Bay contracted with media distributors such as Baker & Taylor, Ingram, and Super D to drop-ship DVDs and therefore didn't have complete control of inventory availability. Indeed, a review of Glacier Bay's eBay feedback page indicates an escalating number of negative ratings blamed on nondelivery of merchandise. Senese, who says his business is still doing well, says he stocks his own merchandise so he can guarantee he has a product in stock.
Does the disappearance of such a large seller portend troubles for eBay? Not by itself. Actually, the large sellers I've talked to recently seem a little more sanguine about eBay lately than they had been earlier last year, when fee hikes ticked off many of them. One recent fee hike was tempered by some fee drops in other areas. Sellers report communication lines seem to be more open these days. And some large sellers seem excited about eBay Express's potential.
Still, with a lot of balls in the air, such as the recent acquisition of Skype, eBay will have its hands full. With competition intensifying from the likes of Google, eBay can't afford to lose too many of its marquee merchants.
Full disclosure: The reason I noticed Glacier Bay DVD had disappeared is that I bought a CD from the company in early January. Despite a claim that it had shipped, I still have not received it. Nor have I received a response from the company asking what happened. Before realizing the merchant had stopped doing business on eBay, I also filed claims with both PayPal and buySAFE, mostly as an experiment to see what would happen. Those claims are pending.