A Letter I Wrote to the Auction Message Board When they Got Rude to My Colleagues

Thanks to all (even the people with whom I was squabbling) for responding so thoughtfully. I am listening and learning. I will hit the major points raised, then seek advice.

* Betty – I am sorry to hear of your husband’s brother’s impending open chest surgery. I had three myself when I was 22 (that was a really bad week). No fun. Tell him I suggest that he should avoid sneezing for… about 12 months.

* Please folks, call me “Patrick.” I come from a long line of Irish potato farmers, carpenters, electricians, cops and bootleggers. There has not been a “Mister” in my family for as long as anyone remembers.

* I wish to call attention to the lovely and polite letter by Lebaronesscher (I am not quite sure whether to read that, “Le Barron Esscher” or La Barroness Cher”). She makes a number of convincing points which I excerpt at length in italics and then respond to:

“I would respectfully suggest that had this explanation been given to those of us who have invested so much of ourselves, time & money into Overstock auctions, these ‘vituperative postings’ and outrage could have been avoided. Aside from being the proper and professional thing to do, I’m surprised that no one foresaw the ramifications of such an enormous and ‘immediate’ policy change….”

You are right. Stormy and Meghan did the analysis that supported this decision, and when I saw it the right course of action was so obvious I was impatient with them about getting it live. But I really do recognize that many of you have also devoted time and capital to make this work, and in the future we can certainly give more warning. And no changes will be again announced in an imperious “effective immediately” way. We are partners, not bosses, and while final authority over such decisions must rest with us, we can involve, inform, and warn you better.

“So many of us who have been with Overstock from it’s beginning, have stayed with this site, even with it’s many changes, lack of certain necessary functions, traffic & business for a variety of reasons… however, I’m sure others can testify that one of the main reasons we smaller sellers have “stuck” is because of the familial atmosphere. That attitude, generated from yourself and your staff made us feel that we were working together to build a better auction site… perhaps a ‘more human’ auction venue ~ one that allowed, even welcomed our input in our business partnership here, and that while we may not always get what we ask for, we would at least be heard.”

It is nice to hear, because we have hoped against hope that this is how you would understand this place. It is how we understand it as well. We may not always act perfectly in a way that reflects this understanding, but we do want the family atmosphere where we work through issues together. As you will see below, I am going to ask you for just such advice on some upcoming issues.

“That attitude may also be the reason that some felt comfortable enough to post their feelings exactly and as immediately as they were felt, unfortunately.”

I understand. I just don’t want to have a family where some refer to others as coming out of sewers. For your information: Stormy is from Toelle, Utah, left high school to become a single mother, and raised two boys on a shoestring (one is now 20, the other, 17). She joined Overstock as a temp five years ago and hustled from the day she walked in the door, racking up points in every area she has touched (she built B2B, wrote and produced our TV ads, wrote, produced and performed our radio ads, does all our TV and radio ad buying, took over customer service a year ago and built it from not being top 100 to ranking #4 in the nation). Meghan is a brilliant young woman in her mid-twenties who has successful in our market programs, switched to auctions a year ago determined to make it work, and is getting her MBA at night school so she can manage this operation better. She is convinced that this is something that can catch fire, and is, with Stormy, your biggest proponent within the company. Byron is an extraordinarily decent fellow with superb judgement and people skills, though he is no push-over. Jason Smith came to us from eBay, and is another exceptionally able and decent man. These and their colleagues have taken on a Herculean task, and are convinced they can achieve the impossible: creating a succesful competitor to eBay (if only on a small scale). You are part of this family too. So when our family members publicly talk about these family members coming out of sewers, it hurts. In my family, my Pop would have cracked any of us who talked that way about another member of the family.

“In return for our continued loyal support and participation, we’d expected the simple courtesy of some notification of major changes or site enhancements, to be given a chance to adjust our mindset and our actions, if necessary. To our dismay & disappointment, however, we often receive no advance notice, and in some cases are only informed of changes when site functionality is affected to the point of inoperability.”

That is a fair expectation and we will do our best to live up to it in the future.

“I don’t believe that just because we haven’t invested $6million should mean that our wishes or our professionalism are unimportant, or that our emotions should be exempt… and if we are not treated professionally & respectfully, how can that be asked in return?”

I agree completely. You deserve to be treated professionally in all matters.

“I would also like to say that I have yet to receive formal email notification of this change, and I thank you for taking the time to read this”

That is a major surprise to me. One of the things we are working on is our auction email system. We suspect that the shopping tabs may have scooped some people who really just signed up for auctions emails. We are double-checking our systems to make sure that in the future, everyone who signed up for auctions information gets all such auction announcements.

* “Forgiveness” – Tempers ran high on both sides. Some of the people who were most nasty to my colleagues have written elegant apologies, but have asked to be reinstated. I think it best to let everything simmer down for a few weeks, but we can revisit this subject with them in January.

* Fakes – We really must stand by our decision to be 0-tolerance on this subject. I am sorry, and sorry if you feel the change was abrupt. In truth there is no change in policy: there is simply a change in how trusting we are going to be. If someone comes on the site and lists a pair of Diesel Jeans, then I say, no problem (and in general, I think Diesel feels the same way). If someone shows up and last 200 pair, any sane person will suspect there might be a fugazi problem. So we are going to be careful about letting those mass sellers load such products, and work with them just like we do our shopping partners, until we have established a level of mutual trust.

* The MIM@2X policy (as I call it). As I wrote, there are folks who list 20,000 “auctions” (all of the form “Starting Price P, MIM at 1.01P”). Again, that is really a classified ad, not an auction. They kill sell through for everyone. that was the impetus behind the 2X rule. Some folks, like the woman who sells antiques, points out why her business simply and legitimately needs a narrower spread than 2X. In addition, some of our enterprise merchants are exempted just because they are selling commodities and can maintain high rates of sell through.

There are a few ways we can resolve this issue:

– Stick with the 2X rule, but exempt some sellers on a case by case basis (we are coding up the functionality to do just that): simply call (or, in the absence of telephone agents, email us).

– Reduce the 2X to a rule like 1.5X, or even 1.3X, but have it apply across the board.

– Introduce classifieds. That is, instead of starting an auction at $29.95, MIM at $30.00, we would give sellers the ability simply to list the item at the fixed price of $30, with no underlying auction.

Thoughts welcome.

* Subscription plans. I understand that sellers like these very much. Is that true? Please comment.

– What would happen if I proposed ending these? (Probably a mass uprising, but one never knows until one asks, so please tell me.)

– What would happen if we simply eliminated the higher-end subscription plans? Maybe we’d keep it so that people could still have subscription plans up to 100 (or 500? or 1,000?) simultaneous auctions, but just eliminate the crazy, mass uploading of so many auctions that it swamps the site. This would probably be good for consumers and smaller sellers, but not so good for the big sellers (at least in the short run). On the other hand, it would not hurt them much, because most of them do not have good sell-through rates, other than the Enterprise Merchants.

* These last two points tie together. Maybe by eliminating the higher end subscription plans (except for Enterprise Merchants, as they still have good sell-through) it would uncluttered the site, raise sell-through’s, and thereby let us get away with a MIM rule that was not as draconian as 2X, but something milder, like 1.3X, which would return this to our original idea of a true auction venue.

I am really throwing these ideas out for public comment. Please all feel welcome to comment (i fact, don’t let the biggest playersdominate the conversation: if they say something with which you disagree, please post a response so I can understand all sides of the debate). And do not get mad if I have said something that offends you. I really am throwing out ideas in the hope that I will learn from your responses. Please just explain the drawbacks, positives, and general trade-offs of these ideas as you see them, and do not get angry at having a dull student like me.

Your humble servant,

Patrick