The Truth Behind Auctiva and Price Changes

Monday, 1 June 2009 at 5:00 am Pacific USA Time.

Auctiva, you did quite a job with marketing spin last week. The exact quote from Auctiva's CEO was, "eBay recently made changes to its affiliate program that greatly restricted, and ultimately eliminated, this critical revenue stream."

I care about the truth, and I'm not sure that's totally the truth. It does make people sympathetic to Auctiva, and look at eBay as the bad guy. But let's take a closer look.

The eBay Partner Network (ePN) is eBay's system for giving people and companies commissions from registrations and sales. The idea here is that if you can bring people who weren't on eBay TO eBay (say from your blog, website, etc…), you should get a commission for that.

Over the years, ePN has made a lot of changes. But one thing that was pretty consistent was that in order to make this commission money, you're supposed to bring traffic from outside of eBay. eBay doesn't want to pay a commission to someone who drops links INSIDE their eBay listings or Stores since that doesn't jive with the intentions.

Think of eBay's old "store referral credit." If you brought someone in from outside of eBay through that link, you might get a fee credit. If you dropped that into eBay listings, you can expect nothing. Same kind of thing.

Evidently, Auctiva had coded a number of things they were putting into listings (images, galleries, etc…) to have ePN codes. And when your shoppers clicked on those inside your listing, and then bought from you, Auctiva got paid commissions by eBay.

Evidently in 2009, eBay has decided to crack down on this harder. It looks like they are throwing people out of the programme if they are mis-using these links, by accident or on purpose. This particular case is no accident. :) Nor is it a secret. I've seen piles of people I don't know on message boards and discussion forums all talking about Auctiva's "use" of the ePN. There was a real outcry for eBay to either cut them off or let everybody make this kind of money.

I would rather have seen eBay allow this, honestly. I think that if you put something special into a listing that makes the sale, why not get a commission from it? There are plenty of things people put into listings that KILL their sales. If you can actually MAKE sales happen, do it and do more of it! eBay wants more sales. Sellers want more sales. Let people who can make more sales happen MAKE THEM HAPPEN and get rewarded for it. Where's the problem there!

When Auctiva makes it sound like eBay made a change that forced them to do this, I am not crying in my cereal. eBay's only change was to crack down on people who had been abusing the ePN, and Auctiva weren't the only ones. I would also have to say that a business that only survives as long as it makes money that it gets from breaking a rule is not really a strong model! That would be like a business deciding it's only profitable if it keeps sales tax money it collects rather than giving that money to the state! It's cheating.

So cry not for Auctiva. I think they made their own beds on this one. They could have been charging people $5 all along, come in cheaper than other companies, and had revenue to rely on. They never HAD to be free. They should have thought more long-term, especially if their major revenue stream was the kind of thing that could go POOF at any time!

Between eBay cracking down on non-compliant eBay Stores this year and now cracking down on misuse of the commission system, I think the best advice I can give is the same advice I've always given: be compliant. Follow the rules. You won't like it when eBay cracks down on the rules, and you haven't been following them!

  • Facebook
  • Twitter
  • LinkedIn
  • Email
  • Digg
  • Google Reader
  • Delicious
  • Reddit
  • StumbleUpon
  • Technorati
  • Tumblr

Categories: Just An Observation

Comments Closed

Comments are closed.