Just My Thoughts

eBay reported it’s Q4 and 2008 year end earnings yesterday. As expected the numbers where not good. That being said, Amazon is set to release it’s numbers late next week and while these are expected to be better than eBay’s, it certainly is not expected to indicate meteoric sales.

Many media venues have and will report on these marketplace numbers, and I will leave it to the experts to determine which venue wins the battle. Clearly ecommerce has had as difficult a time as B/M businesses in the current state of the economy. eBay was once charactorized as “nearly recession proof” by former CEO Meg Whitman. While this may have seemed true at the time of that statement, it certainly has proved to be false in the current economic crisis.

Everyone Loses

eCommerce sellers have always been innovative. These entrepreneurs have moved quickly to changes in the marketing environment. As buyers attitudes have changed, so to have the sellers. What this has created in my mind is a drastic discount marketplace.

Don’t get me wrong, I want to pay the very least I can for anything that I purchase just like the next guy. The downside to this is consumers have come to expect loss leader prices on EVERYTHING they purchase! This situation is a self perpetuating crash in prices endorsed by the marketplace venues like Amazon and eBay who encourage and in many cases nearly demand sellers to offer product at loss leader prices with FREE shipping!

Reality must set in very soon! eCommerce sellers and consumers MUST realize that these type of marketing strategies can not continue! If businesses can not make a REASONABLE profit to cover overhead and investment in new product, plus afford the business owner the ability to make a living, the business will FAIL. Many will say that this is good. Only the strong will survive.

 I disagree. Failure of small businesses around the world will lead to economic collapse far worse than we are currently experiencing.

In my humble opinion the consumers and ecommerce as a whole are the losers.

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