eBay: "We're meeting our unambitious targets"

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Last night’s eBay earnings call was one of the shortest I’ve ever listened to, and also frankly one of the dullest. Given that their prediction was that they would grow more slowly than ecommerce in 2009, no one was really expecting fireworks, and no one’s expectations were wrong there. There was no big announcement – though JD did hint twice that something big is coming for sellers next week.

Marketplaces

Though Marketplaces’ revenue was down 14% compared to Q2 2008, it was up 3% compared with Q1 2009, the first quarter-on-quarter increase for five quarters. It’s not, perhaps, the green shoots of recovery, but it might be the stopping of the rot.

Non-Motors GMV (i.e. turnover of items sold) was down 10% on the previous year, though up 3% on the previous quarter. Surprisingly, the real good news in Marketplaces looks like the vehicle sector, with an 11% increase in GMV compared to the previous quarter. Overall, the trend in sales remains away from auctions towards fixed price listings, with BINs representing 51% of total GMV.

PayPal and Bill Me Later

PayPal continues to be the star in eBay’s heaven, with an 11% annual growth in revenue, and an increase of 12% in total payment volume. 54 of the top online retailers in the US now offer either PayPal or BML, and 22 offer both. Most of PayPal’s growth is off-eBay, but interestingly, in response to a question about increasing payment volumes, JD said that he thought that on-eBay PayPal payments could be increased 10-15%. Given PayPal’s current ubiquity across the platform, we might wonder where this increase is going to come from: anyone who wants to use PayPal is surely already doing so. Can we expect to see more PayPal-only areas of eBay?

Skype

Skype’s revenue for the quarter was $170million, a YonY increase of 25%. We might have expected Skype to do well in a recession, but that’s stellar performance by any measure.

The call is available on listen again and the figures are in the press release.

51 Responses

  1. With regards to PayPal increases and something big hinted at, could it be some sort of promotion in the works to get more sellers to promote/use it more? Or some sort of re-jigging of PayPal fees, something that hasn’t changed for years.

  2. Anyone have any clues as to what these two big things for sellers could be?

    Also, didn’t ebay promise that there would be no more major changes this year?

  3. @2 ‘Our free listing policy has been very successful in improving the buyer experience – we are pleased to announce that it will be extended to all starting prices for private sellers’. ‘That will also mitigate against the complaints from business sellers that the site is flooded with 99p listings’.

  4. “…something big is coming for sellers next week.”

    Wow, I love surprises. Knowing eBay’s track record, its probably something to dread. I just pray I’m wrong.

  5. You better drop to your knee’s and say 10 hail marys then Leon 😆

    In my humble experience each new change gets rid of more sellers, if you can stick at and grit your teeth you will probably reap the rewards.

    If you take the introduction of best match last year, our sales are flying as a result, lots of my competitors just gave up .

    I certainly won’t be flying the eBay flag anytime soon and if I could leave I would, but nothing else compares so I grin and bare it and put up with all the crap they throw.

  6. Is their site dying?

    Or is it your idea of their site that is dying?

    Perhaps they think things are going a long nicely thank you.

  7. “JD did hint twice that something big is coming for sellers next week”.

    Heaven help us

    Bet this means even more amending of listing, more rubbish being offered for sale because it’s free and listing disappearing from best match behind an abundance of junk.

    How on earth can a seller prepare a business plan when the rules of the game change with the wind.

    There is only one change I would really like to see introduced. “Bye Bye JD”

  8. If this big change is going to be compulsory Free shipping across the board, will we get penalized for changing our item shipping (and perhaps listing descriptions) in the search engine visibility?

  9. “You’ll hear things around rolling out our buyers resolution’s process and rolling out multi-SKU, and a variety of other things that will be announced on Monday, and the impact has been reflected in our guidance.”

    Apparently it’s all being announced on Monday.

  10. You can rest assured it’s pretty likely to be something unpleasant for sellers but dressed up as a “good thing”. I would imagine more free P&P categories and maybe a few fee changes as a sop.

    And board_surfer its not just me that thinks eBay is dying. Nothing lasts forever and eBay will either have to get with the plot or die. Still it’s a free world and that’s only my opinion (but I bet a lot of people would agree). eBay started to die the day they started thinking the buyers were their customers.

    Steve

  11. something sellers have been asking for for a long time
    …MORE BUYERS! YES

  12. I think best match is going to change in some way quite soon,they are already testing it depending which internet browser you use.
    I really don’t think ebay is dying just yet,for it to die you will need another site to kill it, cannot see any coming just yet,many sellers the ones you don’t hear from to often are still doing pretty well .

  13. At least some of what AuctionBytes has blogged about is only testing, and is unlikely to be implemented ever, and certainly not in the short term.

  14. # 13
    I go along with Steve on this one. I think ebay is dying, but it’s the death of a thousand cuts. There have been lots of changes which have been moaned and groaned about, and like Whirly at # 7 I also grin and bear it, but I’m looking at alternatives.

    At the start all I needed was ebay – things were great. I know everybody says don’t put all your eggs in one basket, and sell across different channels. But back then the ebay basket was strong and I didn’t need other channels. OK maybe I was lazy.

    Not any more I actively sell on other channels and those channels are starting to look better than ebay. I’m only a small seller and ebay wouldn’t even notice if I went, but enough small sellers following the same pattern will have an effect, hence ‘ebay is dying the death of a thousand cuts’.

    Free P & P on dvd’s is killing the category. My ROI on dvds has reached the low point where the profit doesn’t seem worth the effort of listing on ebay. Once my current stock of dvds runs out that’s it as far as ebay is concerned.

    If free P & P is forced on us for CD’s (the next natural choice) then I will simply focus on other channels and ebay will be way down my list.

    This is not a game, it’s a business and if business is better on other channels then that where my business will go.

    I really don’t understand their logic. Things seem to be getting worse – Not better

  15. Thanks Sue for post 11.

    @ Steve #5 & Glenn #21
    I don’t think ebay is dying. I think it has a HUGE identity crisis or multiple personality disorder (no disrespect to sufferers of either condition intended).

    It can’t decide whether it wants to be what it originally was: an auction site for collectibles, impulse buys and unwanted gifts with hobby sellers not having to stick to the distance selling regulations. OR a catalogue clearance host for high street names with more red spots than at a kiddie’s measles party.

    The reassuring thing in all of this is that the online buying bug has well and truely bitten the UK public and whether ebay continues to exist or not, there will ALWAYS be buyers. 😆

  16. #23
    Bunchy

    I take your point, and it’s well made, but if ebay isn’t dying, then it’s seriously ill.

    You are also right about the online buying bug. Ebay did much to encourage online buying, but they are in danger of being left behind. Until they sort out their identity crisis they are going to lose buyers and sellers left, right and centre

  17. PayPal will be pushed even further.

    The site is not dying, recession and some poor management decisions have reduced traffic. If you have not moved with the changes your perception could well be that the sites dying.

    eBay is still the biggest ‘venue’ (another change will be its constant movement toward handling the sale)

    “free” P&P is not a bad thing, in fact it even works on websites, people like to see the the price they see is the final price, add a refund for multi buys and you have happy customers. I fully understand why they are doing it, its also something regional that they cannot police.

  18. Ebay has been dying since the day I started, must be the slowest death in history.

    Up and coming changes?… apart from the obvious how about a limit on the number of listings a private seller can have at one time?

    changes to the powerseller qualification?

    A checkout would be nice but I cant see that coming as they would need to have run some serious testing before rolling that out.

  19. Just imagine what Ebay would look like without Paypal and Skype. Listings in the US were about 12 million last year – this year over 33 million listings and they still managed to lose 29 percent of their profit! I have no idea what the analysts are gushing about. Stockholders, at this point, are buying ebay stock due to Paypal and Skype performance and they’re ignoring the 800 lb gorilla in the room….the one that’s dying!

  20. “something sellers have been asking for for a long time”.

    I think you’ll probably be disappointed. I’ve heard that we’re not due for a cart until 2010 at the earliest.

    My guess is the ability to block buyers from specific countries instead of just by region.

    And maybe shortening the UPI wait time.

  21. #28
    (“free” P&P is not a bad thing, in fact it even works on websites)

    On websites it works, I know I do it. In addition to free P&P I also offer discount off the total price of multiple purchases to encourage multiple buys.

    We get at least one multiple purchase buyer every day, and with every additional purchase postal discount kicks in. This works great because at checkout the buyer can see what the actual total price is, and make payment accordingly.

    Doing it your way would mean that sellers pay 9% sales fee on the total, before making a refund to the buyer. That could work out to be a lot of unnecessary 9% commissions on that part of the total subsequently refunded.

    I’m sure ebay would love this structure, but its hardly good businesses. Lots of extra unnecessary transactions and emails, and would make calculation of ‘Turnover’ very messy.

    Not only that. When you openly state the rate of postal discount within your listings, a buyer knows exactly what to expect. If you start making refunds after payment, you open yourself up to a whole bunch of ‘What if’ questions before any buyer makes a sale.

    You are also creating an expectation in the buyers mind as to what the refund will be, and that is open to all sorts of problems.

    In so far as perception goes and moving with the changes – I am moving with the changes. It’s my perception based on sales figures that I get a better ROI selling dvds on channels other than ebay. Prior to Free P&P it was my perception that I didn’t pay 9% commission on that part of the sales total which was the P&P charge.

  22. So many get tied up in the fees aspect, its a cost no different to anything else, I factor in 12% for eBay on my products, I add the cost of delivery to the cost price and add my margin, if two or three items can go together then they do.

    I think maybe the problems are in the areas where margins are tight. The only time my margins tighten is when a one container wonder attacks the area I sell in, I have a problem if volume suddenly drops (inbound stock) so I have to chase them off using a drop in margin.

    The problem with DVD and other cats is that they are perfect for eBayers, low storage and handling costs and at a guess much more easier for ‘non business like’ sole traders to attack with price.

    I think in the next 24 months there will be a hard push by eBay using PayPal and the system to take far more automated control of the sale, product offered and service (by the seller) provided.

  23. #30 An interesting thought ?

    Can somebody with an eBay NDA, tell somebody else with an eBay NDA what they know, assuming the other person doesn’t already know ?

  24. #38 No. The thing is with an NDA it prohibits you from talking about what you know so there’s no way to discover that the other person knows what you know without revealing what you know.

    The only time you can talk is if the information is published in the public domain or (riskier) if you had prior knowledge prior to signing the NDA. Terms of an NDA normally bar you from even saying you’re under NDA.

  25. these are the “rumours regarding the upcoming changes:-

    (EBAY) is poised to announce on Monday a series of changes to its core marketplaces business that are designed to help large vendors sell new goods in greater volumes.

    Ebay will tweak its search algorithm to favor new products, allow sellers to include more and bigger photos in their listings for free, and do away with features that sellers have used to dress up their listings, two people familiar with the e-commerce giant’s plans said.

    The company will also limit communications between buyers and sellers, a step designed to ease the burden for volume-sellers, they said.

    IF you set any store on what CNNMoney says 😛

  26. @42 I think its closer to the truth than we would want, the limiting factor for multiple high street branded retailers making a user name on ebay and start retailing is the problem with overall image. eBay could quite easily stop the feedback system for large retailers using the excuse they are well known for their good service already so FB is not needed. It then frees up the retailer to list without fear of damaging their brand image.

    They may limit high volume high street brands ASQ to the FAQ etc.

    I would imaging the main objection when eBay approach a retailer is the FB aspect.

  27. “and do away with features that sellers have used to dress up their listings”

    Is that the end of customised eBay listing templates?

  28. #44,

    No it will be the end of things such as BOLD, HIGHLIGHT, BORDER. It confuses things and makes the core look like a bunch of rainbow, hard on the eye jargon (in ebay’s eyes).

    Monster Cellular Store
    E-Commerce Operations Director

  29. I heard that buyers from overseas won’t be able to ding our stars, or maybe it’s our shipping cost/time star.

    In the U.S., Wallstreet is touting Donahoe as a genius. They think since he beat the estimated earnings, he’s really doing a bang up job of turning Ebay around. Donahoe isn’t going anywhere soon.

  30. #47 cleaning up the search results page would help, it always looks cluttered, too many ads, options and colours.

    I think preventing the 99p free listing clutering up search should be of priority.

    Also I think search results have been messed up with free P&P. I think the whole push for free P&P is a big mistake making some listing look expensive, encouraging sellers to opt for slower delivery services and discouraging multiple purchases. With virtually all our listing being fixed price we want to encourage multiple purchases, it is wrong to charge the buyer postage again and again. Flat rate postage per order is the way to go (the likes of Next use it), clear, easy to understand and encouraging multiple purchase and no need for correspondence between buyers and sellers to negotiate combined P&P discounts. To prevent excessive P&P, reduce the overall percentage rate for FVF but apply it to the total order value including P&P. Then it is up to the seller which pricing model best suits them. Compulsory free P&P in some categories has messed up our flat rate postage, all it means is we will no longer sell in those categories on eBay instead stick the inventory on Amazon.

  31. @ # 45

    Did you hear that at one of those secret meetings with eBay? I know you are one of the larger sellers on eBay.

  32. Do you think ebay says more than what it does?
    Ebay sometimes cannot be that perfect even if it has been so famous.

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