The New Secret Sauce For E-Commerce

prostoalex writes "The hottest e-commerce trend this year? APIs and opening up databases to outside developers, says Information Week. There are currently 50,000 software developers in Amazon.com Web Services program, while eBay enjoys the presence of 8,000 companies and individual developers in its API program. There are 30 million XML queries performed on eBay servers daily."

in other words...

[Anonymous Coward]

a company can automate their sales by utilizing amazon or ebay as way to market their product to their customers, rather than running an obscure sales website no one will ever visit. I think it's win-win. Amazon or eBay collects a small fee for the sale, the seller gets his product to a larger market faster, etc etc.

Re:in other words...

[Anonymous Coward]

This is nearly identical to Microsoft's original business strategy, which is to form a kind of symbiosis with other companies' products. Other products actually did well because Microsoft did well, and vice versa.

Yup

[Anonymous Coward]

Certainly, this is an example of how giving people an authorized way to do things (here, access APIs) discourages them from doing them in a way you don't want (screen scraping). A lot easier than suing them and trying to convince a judge that screen scraping is somehow analogous to stealing car stereos.

Auction Snipers?

[wayward]

The article says
There also are risks to opening the technology vault. EBay has to contend with a legion of "auction snipers," Web sites that automatically enter preset bids during the waning seconds of auctions.

Is this really much of a problem? Ebay itself has functionality that allows users to enter the maximum that they're willing to pay, and it auto-increments their bid based on this. Also, even if bid-sniping was a major issue, there have been scripts around for a long time that do this.

Re:Auction Snipers?

[Karma Farmer]

I suspect the biggest threat from "auction snipers" is to the sellers, not to the buyers.

A perfectly rational buyer is going to enter a maximum bid amount based on what he or she thinks the item is worth and then be done with it. But, buyers are seldom "perfectly rational." Once someone bids on an item, the bidder forms an attachment to it -- when outbid, there's a competition with the other bidders. Bidders rationalize raising their previous "maximum price", because they really want the item, and "maybe it's worth more than I thought."

This irrational behavior benefits the seller, because irrational people bidding more on an item than it's worth are a great way for a seller to make more money. This, in turn, benefits eBay because the sellers are happier.

Conversely, the auction snipers benefit the buyers. The temptation to bid "just a little more" is removed. The reward system geared to unhealthy addictive behavior is gone. The bidder decides on a maximum rational amount, puts in a bid, and either gets the item or doesn't. It's perfect. Paradoxically, though, this makes the bidder unhappy. Bidders feel cheated, because they waited all the way to the end of an auction, feel soooo close to getting thier dream item, start to form an attachment, and the item is snatched away by a "sniper." Never mind that the sniper just paid more than the bidder thought the item was worth -- the bidder feels cheated, because he lost the opportunity to behave irrationally.

Bid sniping makes both bidders and sellers unhappy. It costs the sellers money, and it cuts out the addictive feedback the bidder has grown to depend on.

Re:Auction Snipers?

[wayward]

But, buyers are seldom "perfectly rational." Once someone bids on an item, the bidder forms an attachment to it -- when outbid, there's a competition with the other bidders. Bidders rationalize raising their previous "maximum price", because they really want the item, and "maybe it's worth more than I thought."

I think you're right. On a side note, it's fascinated me to watch the drama surrounding some of the Greek pins on Ebay. Some members got very concerned about "rescuing" their organization's pins

Re:Auction Snipers?

[AuMatar]

Its not irrational to raise your price. I typicly start with a low price, so I recieve email notification if someone outbids me. Then I know their will be competition on the item. I also sometimes bid low on several of the same items, planning to be outbid and drop all but 1. This way I can continue to bid on the low items, while not possibly being stuck paying for all of them.

Also, when I do a "normal" bid, I put in not my maximum for a product, but a fiar price. Which is frequently lower than my max

Re:Auction Snipers?

[Anonymous Coward]

I also sometimes bid low on several of the same items, planning to be outbid and drop all but 1.

There probably are situations where this works.

Also, when I do a "normal" bid, I put in not my maximum for a product, but a fiar price. Which is frequently lower than my maximum.

I don't understand this. If you're willing to raise your bid to a certain maximum, why not just put that bid in as your maximum bid and be done with it? I don't understand what advantage you get by starting at a price lower than y

Re:Auction Snipers?

[AuMatar]

Knowing how much competition there is on the item. It also allows me to raise my maximum upward later. I do not believe its possible on ebay to lower your original maximum bid (say I bid 90, then decide I overbid and wish to revise to 70). If I bid 70 from the begining and decided I wanted it enough, I could raise it later.

Also, sellers have friends. For example, my sister had an auction up. Someone bid 70 bucks. She asked me to bid 80, so she got more. I bid, the other guy ended up paying 81. But I

Re:Auction Snipers? Loser's curse

[timrichardson]

There is economics theory that is often called game theory, that talks about the 'winner's curse': you can only win an auction by paying more than anyone else thought the item was worth. That's a good reason not to bid too high. Sometimes there are auctions where the winner only pays the price of the next highest bid, ie the highest losing bid, which is theoretically better for the winner. Ebay doesn't do this.

Salespeople become obsolete?

[baywulf]

How long before salespeople become obsolete for all but the most expensive items? You can have software agents look out for items that interest your, compare prices and features and make suggestions based on your previous purchases.

Re:Biz-Talk.

[borkus]

Isn't this the way B2B and B2C works with things like WSDL, EDI, and web services?
In technological terms, yes. However, most typical B2B arrangements are far from open - management meet and hammer out a contract, tech meet and hammer out interfaces and connectivity, etc. Even if the arrangement is only one company providing data to another, there is considerable interaction between both organizatons before exchanging data with one party paying the other for data. In all cases, the two parties only interact by agreement - usually in the form of a specially arranged contract.

EBay and Amazon allow nearly anyone to connect to their services, Anyone can retrieve that data for free and use it to make themselves (as well as Amazon and Ebay) money. While there is a contractual arrangement between Amazon or EBay and the partner, it's generally a boilerplate contract that simply allows Amazon and EBay to prevent abuse.

The advantage for EBay and Amazon is that they don't have to come up with interesting uses for their data - they simply encourage partners' ideas and both parties make money.

50,000 Amazon developers? Right.

[Animats]

I suspect that's the number of people with Amazon affiliate accounts, linking to Amazon for a kickback.

Re:50,000 Amazon developers? Right.

[purplepaste]

There are a lot of small to mid-size companies that are selling their products through Amazon Z-Shops, either to complement their own web store or as their only online presence. I've done the development work for a couple such companies, integrating their backend sales and distribution systems with Amazon's reporting systems.

It's a pretty low overhead way to get their products sold through a major, trusted source. And 50,000 wouldn't surprise me.

Kickbacks? Does it work?

[timrichardson]

Does that work? Or does Amazon have some smarts? If my wife buys all her books through my affiliate link and me through hers, do we get discounts? I stupidly never tried this because I thought Amazon would be too clever.