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Ebay's strategy causes site to collapse

The failure of online auction site Ebay on Saturday highlighted concerns about its ability to handle bulk listings by large retailers and wholesalers.

The search and browse functions on Ebay’s main shopping site,, were down for most of Saturday.

The Financial Times reported that the failure appeared to show the group’s new strategy of attracting large retailers and wholesalers to its online marketplace has backfired.

Ebay notched up a 33% increase in live listings on the same time last year to 200 million.

Ebay has been tempting back buyers and sellers by luring liquidators and big retailers to its site, after losing market share to rivals such as Amazon.

Ebay said the strategy will improve the selection of goods for buyers.

The failure of Ebay on Saturday is likely to hit its revenues hard. As well as lost sales during the site’s down time, Ebay has said that it will compensate affected buyers and sellers.

“There are three ways they are suffering,” said Sandeep Aggarwal, an analyst with Collins Stewart. “There is a loss to revenue. Then they have to give credit to the merchants. And then there’s the likely defection of users during the holiday season.”

Ebay has also said that sellers whose auctions closed during the search outage do not have to honour those sales.

By Monday morning the problem was not fully resolved, but Ebay said in a statement that the technical issue was easily fixed and had been implemented across the site’s servers throughout Saturday afternoon and evening.

Ebay president Lorrie Norrington said in a statement: “On Saturday we fixed a software issue that resulted in a disruption to our site. Because this was an isolated incident and not systemic, we were able to correct the problem and resume normal operations. By Sunday, the site was performing well in stress tests, handling increased activity levels throughout the day.

“While we’re confident that we remedied the software problem and that it won’t reoccur, we deeply regret the impact it had on the Ebay community. To minimise the impact, we’re working to ensure that sellers and buyers whose transactions were affected by the disruptions will be made as whole as possible. This includes listing fee refunds and protection against negative or neutral buyer feedback as well as detailed seller ratings (DSRs) lower than 5 stars for impacted sellers, and vouchers for buyers of items that were impacted by the disruption.

“To the Ebay community, you have our most sincere apologies for the disruption and inconvenience caused by the software problem and our commitment to continuing to provide the best marketplace for sellers and the best deals for buyers.”

Readers' comments (1)

  • Terry Hunter, Managing Director, CyberDMG

    Regardless of the cause, the 'glitch' experienced by ebay users on Saturday underlines the vital importance of robust ecommerce in the run up to Christmas. Arguably a brand like ebay may be able to weather an isolated incident, but other retailers looking to perform well during this important sales period may not fare so well. If a customer cannot immediately access an ecommerce site, they're very unlikely to click back later, instead opting to search for the products they want elsewhere. Especially in light of the predicted 69% of consumers planning to do more shopping online in the run up to Christmas this year

    (source: Marketing Week), creating, maintaining and evolving a robust ecommerce site, 24 hours a day, seven days a week, is vital.

    It's also true that failure at Christmas can spell disaster for a brand in the months afterwards; if it cannot deliver on consumer expectation, the opportunity to engage customers and maintain their interest, loyalty and spend in the long term will be greatly diminished. With only six weeks to go, and with shoppers likely to be far more demanding than at other times of the year, I wonder how well are brands responding by organising their sites in the most effective manner, so that they perform beyond expectation, and crucially are able to cope with demand.

    The Christmas period presents a major opportunity for an ecommerce site to be both an effective retail channel and a marketing and merchandising tool, capturing customer interest as well as pertinent information and preferences. This will create richer customer insight and better, more integrated and relevant marketing campaigns all of which will help a retailer to build a sustainable competitive advantage for months, years and Christmases to come.

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