Overall, Amazon benefits both from controlling more of its ecosystem and by having what appears to be a laser-like focus on the buying experience. EBay came up with a focus on sellers and its complexity of focus (buyers and sellers) and organizational separation (PayPal/eBay) work against it.
So right now, in a head to head, I think Amazon would roll over eBay much as Apple rolled over its competitors last decade. Better experience generally wins out if the products are similar and the products are becoming more similar.
Now my eBay nightmare began on Sunday night while I was shopping. I tried to buy a used seat for the car and got an alert that my eBay account had been suspended for questionable activity. Given the outbreak of hacking, I immediately thought I'd been hacked and went into my account information to see what was going on. There was nothing in the account information other than a cryptic note that I'd been suspended. I then called customer support and was told that eBay didn't want to do business with me anymore and when I asked for the individual's name or to speak to a supervisor, I was told the supervisor would say the same thing. They then hung up on me. Let's just say with a massive understatement that I was upset.
It didn't help to find out that they'd sent notices to everyone I'd bought from over the last several weeks indicating I was a questionable buyer. Now what I later found out happened was there was a miscommunication between eBay and PayPal resulting from an old PayPal account that I no longer used and was restricted. It was restricted because I didn't want to provide my bank tracking information for fear that someone hacking PayPal would empty my bank account. A very real risk and one without good recourse, we typically advise that people never provide this information and it seemed foolish not to follow our own advice.
At the core of the problem was a bad information link between eBay and PayPal. As a customer, I'm still left thinking that my buyer reputation was tarnished and I'm not exactly feeling warm and fuzzy about buying from eBay, but I haven't found anything else that can provide the same service, so I'm still buying, and I deleted the offending PayPal account so this won't happen to me again.
But it could happen to someone else.
Fixing the Problem, Avoiding Another: Lessons Learned
At the core of the problem was a disconnection between PayPal and eBay. Had eBay known why my PayPal account was restricted or that the restriction wasn't an indication of bad credit, it likely wouldn't have acted. Because it didn't know, it took the most conservative path, which turned out to be incorrect. In addition, when it took the action, it documented why, so anyone else could easily remedy it if it were a mistake. The level of authority needed to ban a buyer appears to be too low given banning buyers that prepay should be a very unusual citation. Finally, there should be a formal escalation path a customer can take to resolve a problem with a customer support experience like I had. So the fix might be to provide more information to eBay, so it can make a more informed decision and require a second approval when banning a paying buyer. It should also publish an escalation path to resolve problems with staff.
However, I think a bigger problem looming is the requirement PayPal has to enter bank routing information. If it were breached, I think this would put an unusual amount of liability on the company because buyers are basically denied the choice if they want to continue purchasing from eBay or using PayPal. This would suggest an extraordinary level of security that, were it breached, would likely be found inadequate after the fact. The cumulative liability could be more than its insurance carrier would cover and, on top of the bad publicity, which would likely crater its customer base, the cost to the firm could exceed its ability to pay. In other words, it could be catastrophic. I'd recommend discontinuing this practice.
Wrapping Up: Final Thoughts
I'm still buying from eBay and using PayPal, but I also still favor Amazon for purchases. And were I to choose between the two services, I would favor Amazon on three vectors: ease of doing business, personal exposure and customer care. On this last, the one Amazon customer care incident I've had over the years was when a Kindle broke out of warranty, and given I was a power buyer, it just sent me a new one at no charge. I can't even see a way to get to that kind of an experience on eBay and as we move to dedicated hardware and apps, competitively, that likely leaves eBay exposed on every vector should Amazon, or another more customer-focused company, decide to go after eBay's turf.
Finally, in a world of social networking where one mistreated customer can have a global voice, customer care has far more importance at an individual level than it has ever had in the past. It might make sense for executives in any company to actually drill down and find out whether their remediation process scales down to address the needs of one person who has been mistreated.
Oh, and if anyone is interested, my project car is a 1997 Jaguar XK8 convertible. It is actually turning out to be a lot of fun.