This is a surprising piece from the New York Times:
For years, eBay ruled the e-commerce roost. Each holiday season, more visitors spent more time and looked at more pages on eBay.com than on any of its rivals, including Amazon.com. It made sense; eBay is a wide open forum for every kind of seller and item, while Amazon has traditionally pushed a selection of products through its network of physical warehouses.
But all that is now slowly changing. Amazon has opened its site to independent sellers, while eBay’s auction model is running into problems with fee-fatigued sellers and buyers wary of fraud and counterfeit items.
Now the latest audience figures from Nielsen Online confirm that the e-commerce traffic crown has changed heads. For the month of December, for the first time, more Americans clicked over to Amazon.com (59,624,000) than eBay (59,374,000).
Despite the slim margin between the two companies, eBay’s visitor count is particularly alarming. According to the Nielsen data, the number of visitors to eBay.com dropped 10 percent from December 2006 to December 2007.
The full article is here.
Now, in all fairness, Amazon’s rise in traffic isn’t all good news for them. After all, the GMV (gross merchandise volume) on eBay is much higher than on Amazon, which means Amazon is far less efficient at converting traffic into dollars of sales. In addition, given Amazon’s overall profit margins, it also looks like Amazon takes more traffic to generate a dollar of profits than eBay, by quite a bit.
Still, this is a really significant milestone for Amazon, and a significant warning sign for eBay. Amazon’s ability to grow into categories through it’s seller marketplace is now hitting it’s stride, and it’s pretty clear that as e-commerce matures, it will be fixed-price e-commerce, and not auctions, that dominate the market.
eBay has a tremendous amount of fixed price capability at its disposal, but the fixed price market is about trust and convenience, not just about selection and value. Merchandising and product promotion is also crucial, and these are areas eBay will need to invest in heavily.
Here’s hoping 2008 is a year where eBay hits some new milestones of its own.