Up for Bid: eBay, Auctions & Book Sites
Progress is not always pretty or predictable.
By Bruce McKinney
The internet is logic in constant pursuit of speed and scale and it continues to revolutionize the book business. eBay has been encouraging traditional auction houses to list upcoming lots on a pre-sale basis and many have been doing it. It's a great strategy for eBay though less clear traditional auction houses will feel good about their participation long term. They are lending their hard earned credibility to eBay and eBay is converting this into increasing credibility for themselves among traditional auction buyers. It may also be helping traditional auction houses but it seems certain to help eBay more.
Old and rare books may only be a small piece of eBay's business but they are already the dominant force at the low end of the auction market. The total of all documented book lots selling at traditional auctions this year will approach 125,000 lots and 500,000 printed items. eBay's old & rare book numbers, by themselves, will be comparable although the average lot price much lower. A year ago I roughly calculated that eBay prices were 20% of bookseller retail. That put them on the chart but at the low end of what dealers pay to replenish stock. This year eBay's realized prices seem to be inching up while dealer prices seem to be inching down. There are three potential explanations for this. Familiarity with the internet generally and eBay specifically is increasing thus broadening their market. The total of books for sale on listing sites is increasing and is exerting downward pressure on prices. And hopeful sellers, ever wanting to convert their inventory into money [and at the margin growing weary of waiting for the motivated buyer] are increasingly attracted to the eBay auction process that lets them control every aspect of the sale and to conduct sales at a low cost. Because these sellers often are experienced listing site sellers they provide a more solid and professional feeling to eBay listings. In brief, eBay is attracting more knowledgeable sellers.
The electronic market is of course a three cornered stool. eBay and perhaps its competitors are one, the listing and individual seller's sites another. The third leg is traditional book auctions. They create marriages of convenience for more important and valuable material by conducting consistent, predictable, well-described sales of material that buyers at a distance rely upon to bid substantial sums without actually seeing the material in person. In effect they authenticate material and make a market. Prices achieved at auction are also public and provide a history of valuation. This is why, on AE, we document all items posted for sale and record the outcomes whether they sell or not. [Often an unsold lot tells as much about the price as one that changes hands.]
The eBay model is of course quite different. Sellers write their own descriptions. With a stake in the outcome some sellers are tempted to over describe virtues while under describing problems. There is a term for this: lying. Others simply don't know the difference between poor, good and fine and only learn about it in expletive laced emails.
Some sellers have told me their book looks fine but it's certain "fine" doesn't mean the same thing to them as it does to me. The book business employs terms of art and to paraphrase Justice Potter Stewart on pornography, "I know it when I see it." Both the material and the terms are highly subjective and subject to abuse by all who play the game. Many a documented lot has included a variation of the line "But for the loss of the title page, dog-earring to pages 9 to 74 and the innocent crayoning of a long-ago child-like hand, a perfect copy." Thus a search for "perfect copy" will find this gem.
Up for Bid: eBay, Auctions & Book Sites
These issues, notwithstanding, eBay has a well developed and proven book selling mechanism that will in time resolve many of these descriptive issues because market makers can impose standards. As they do this they will deliver a higher percentage of the retail price.
This makes me wonder why they haven't stepped up to buy one of the major listing sites. Such a site that has internal links and easy options for moving material from online listings into the auction cue is going to be very popular with anyone who doesn't want to have to learn multiple ways to handle their material on line. In other words: with everyone. It might work this way. When a book is listed it carries with it the date first posted and gathers with it over time the accumulating history of changes to the listing. If the price is changed or the descriptive text revised this would be part of the book's information. To this informed approach eBay could offer sellers such options as, at specific dates after first listing, automatic price reductions according to a schedule the seller selects. Perhaps the price drops by 5% or 10% every three months. At one year a seller could then opt to post the item for auction starting the bid at one half of the last price or 30% of the original price. Buyers would understand the book is a relative bargain with the pricing stage identified in color.
Of course some, perhaps even the majority of sellers, will want to control every aspect of their marketing. They won't participate in an automatic sequence of price reduction and conversion from on line listing to online auction. But some will because, with more than 20,000 sellers on ABE, Alibris and other selling sites there is always a population looking to exit even as others are trying to break in. Lawyers who have the responsibility to liquidate book inventory will certainly use this approach because it provides both the potential for maximum income and guarantees that every book sells by some specific final date. In time this will attract buying interest and stabilize the market. In helping to clear the market of its current excess inventory eBay could emerge as the established mechanism for clearing book inventory, something that has real value long term. I believe it might become a legal monopoly.
Of course a decision by eBay to buy Alibris or Abe would probably awaken the sleeping giant at Amazon and they too might want to create a vertically integrated business, perhaps primarily out of fear of an eBay juggernaut. Then too, a combination with Barnes & Noble is logical. In either case two sellers might get a good price. And of course there is the other guy, Bill Gates, who if he decided this was an interesting business and came at it from the database side, could make a battle of it with anyone on the planet.
Finally there is Google who dreams of things not yet contemplated and materializes them out of thin air on a regular basis. While all the world thinks of what is and how to make it better, they think of what has never been but could be.
For those who watch the unfolding world of selling old and rare books on the net there is a sense of what it must have been like in the days of the Roman Coliseum. We all sit in the front row watching the action, wondering what will happen next and hoping the next meal for the lions isn't us.