Keith Goodrum

Ed Dale twittered about an article titled The Growing Frustration Of Ebay Sellers at Business Week online. It looks like Ebay is shutting down seller’s accounts for falling below a 4.3 on their new rating system.

Business Week profiled a couple of folks who are relying on Ebay as the overwhelming majority of their business, and in some their only source of business. The story went on to explain what these people had to do to get back into favor with Ebay.

However, this points out a major flaw in their business model.

It’s sad to see these folks getting shut down, and have their sales grind to a halt. However their fatal flaw was getting comfortable with the huge amount of business Ebay was driving to their business. They found out how vulnerable this position can be after one policy change. The old all your eggs in one basket came back & bit them hard.

Back in March I talked a little bit about the danger of relying on a single source for your traffic, business, customers. eBay’s Latest Policy Is An Important Marketing Lesson

Relying on 3rd Party’s for traffic generation is a risky strategy.

This is especially dangerous when a 3rd party like Ebay, Google or even the latest traffic darling Entrecard controls the method. When you rely on a 3rd party you are one policy change from being locked out.

It is fun and exciting to see a bull rush of traffic coming from one place like StumbleUpon, Twitter or Entrecard. It’s so easy to pour all your efforts into this traffic source, while ignoring others… But, that is a huge mistake.

Think of traffic tactics or strategies like investing.

You have to spread your risk. You don’t want your portfolio concentrated in one industry, stock or even in a single type of investment. The meltdown from this past September is an example of not spreading your investment risk. To many people thought the real estate market would always boom, and got burned when it collapsed.

The same can be said for traffic sources. One can work like gangbusters producing a large number of visitors. But, eventually something will happen. Either the traffic source will fall out of favor… Myspace comes to mind. Or, the traffic source will make a policy change, and possibly lock you out… can anyone say Google slap!

The solution is simple; make sure you have many traffic sources going at once. Not one or two… but 7, 10 or more. Having this many going at once spreads your risk. The more you have the better protected you will be when one source hits a snag, and stops producing.

It’s always better to have 100 ways to send you 1 visitor vs. 1 way to send you 100 visitors.

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