Monday, March 31, 2008

Digital Delivery at eBay - Over Half a Million eBay Transactions Worth over $15 Million

It looks like the fight for Digital Delivery is over and the loser is the thousands of loyal eBay sellers using the auction site to sell Digital Goods. eBay recently announced that they no longer support the listing of any item that can be electronically delivered to a customer and instead, must use the Classified Ad format to promote their items at eBay. Classified Ads may not link to another website in order to purchase the items, nor may they contain any purchase buttons, links, or other information for buying a digital good. The potential customer has to contact the seller via email or phone to initiate the purchase. I assume after contact has been made, the seller can provide a purchase link to the customer. Not exactly in keeping with the theme of instant gratification promised via a digital good.

We were one of the first to sell downloadable content on eBay. Certainly one of the firsts to enable automatic file delivery once PayPal introduced their IPN system (1999 I think) that allowed server to server communication when a transaction was made enabling the file to be sent to the customer without interaction. It was an ideal solution. eBay evolved from a site offering one off items (pez dispensers), to sellers offering non-unique items (cd-rom drives), to new products (think eBay Express), to the future- digitally delivered goods.

I've spoken at every eBay/PayPal developer conference since 2000. I had proctored developer tracks on a wide variety of subjects each year, but always gave one track on digitally delivered goods and their benefits.

In 2004 I believe it was, PayLoadz partnered with eBay in providing the first officially sponsored downloadable auction at eBay in selling Madonna's American Life single as a download. The auction was a hit and it was the first time ever that a digital track debuted on the Billboard Top 10. It was a proof of concept that digital goods were real. We even went out to eBay's campus and had several meetings and discussions with eBay and digital goods, all looking very promising. They definitely "got it" at that time and they were exploring ways to make things easier for their sellers. Shortly after, they began offering the new digitally delivery listing flow. Certainly not perfect, but an effort nonetheless.

Then they announce this change. I had thought digital auctions were working out well, but apparently not. The feedback manipulation reason seems flimsy and many sellers have concluded it is related to the new $.01 listing fee enacted recently. Whatever the true reason, eBay appears to be moving away from the future of online commerce. So be it.

FYI, our service has processed over 500,000 transactions for digitally delivered goods at eBay worth over $15,000,000. Best of luck to all sellers.