Even eBay hurting in this ecomony
Filed under: Bargains, Shopping, Recession
If eBay is feeling hurt by the economy, then you know it must be bad.
For the first time in 10 years, sales dropped at the San Jose, Calif., company, according to a story in the New York Times, with revenue dropping 7% to $2.04 billion. It's Marketplaces unit, which includes the core eBay auction site, reported a 16% decline in revenue.
It reported that its profit fell 31%. Ouch.
The Times reported that the online marketplace company made considerable efforts last year to reduce its dependence on its auction business, where growth has slowed in favor of fixed-price sales.
I guess bidding can be fun, but I never understood how eBay, or any other company, can make much money from auctions. As a shopper, I want a fixed price that is fair. If I don't like the price, I'll go somewhere else. If I want to haggle, I'll go to a flea market.
Maybe as part of that theory, gross merchandise volume, the total of all transactions on the eBay Marketplace, dropped 12% during the quarter, its second consecutive quarter of decline. If shoppers aren't getting tired of eBay, then they must have less money to spend shopping online. When the economy turns around, I'll bet eBay will be the first place people go to buy a new watch to celebrate.
Reader Comments (Page 1 of 1)
1-22-2009 @ 12:15PM
D Y said...
With all the changes that Ebay made last year, it comes as no surprise to me. Sellers are being charged almost double the fees to list an item, and pay a higher Final Value Fee when the item sells and now that the only form of accepted payment is Paypal (which is an ebay company) They charge yet another fee to accept the buyers payment, that is yet another fee (and on shipping!) too!
If you sell an item for $30. Ebay's listing fee and Final Value Fee is $5.00 then add in the cost of the Paypal fee and it costs a Seller about $8.00 to sell a $30 item! That is almost a third!
That coupled with the fact that Sellers can no longer leave a negative feedback statement against a buyer, buyers bid on items..then don't pay at all, or threaten a seller with negative feedback if they don't reduce the price or refund part of the sale amount when they receive the item.
And then we have the dreaded DSR's (Detailed Seller Ratings).
This is a five star rating that is given by a buyer to a Seller based on Item being as described, Communication, Shipping Time and Shipping Fees. Well--this opened up a new can of worms, some buyers feeling that it is O.K. to "Ding" a Sellers Rating because the post office took too long in delivering an item! Or that a Seller didn't answer their inquiry within 20 minutes.
Ebay has received thousand of emails, I have read all the blogs and watched with interest, the Ebay Boycott last March. They have gotten away from the Core Principals they started with so many years ago that made them a fun and exciting marketplace. It remains to be seen whether or not it is still the place to go to find that "Hard to Find Collectible" or gently used items at half the price of retail. That coupled with the increases in shipping charges because of high gasoline prices...well..it all adds up to declining sales, doesn't it?
The other interesting thing is you would think that because of the faltering economy, people would be flocking to ebay to earn a little extra income by seling unwanted/un-needed items and buying those items they need for less.
But with Ebay doing little advertising, even less marketing, they are doing a disservice to the Sellers who pay their fees. Many have abandoned them for other avenues like e-crater, craig's list, I-Offer, Wagglepop and HiBidder.
Sometimes it is better for a company to admit they made a poor decision and change back...(remember New Coke?).
I will continue to watch ebay, sell on ebay and buy on ebay. It will just be with less frequency.
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1-22-2009 @ 12:18PM
BC said...
Ebay's greed has caught up with them. The site has become ONLY buyer friendly, with sellers unable to leave anything but
positive feedback. Bidders identities are blocked breeding shill bidding. Fee this, Ebay!
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1-22-2009 @ 12:45PM
jack said...
I hope they don't fail, i love ebay!!!
This is also an awesome one:
www.fakebuddy.com
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1-22-2009 @ 1:31PM
Gary E. Sattler said...
This decline of eBay began in August of 2006. That's when the first great eBay fee strike began. Do a historical review of eBay blog posts at www.bloggingstocks.com . The whole picture takes form there.
At that time, a large "core" group of former eBay powersellers and hundreds of other disenfranchised eBay sellers took virtual control of eBay's internet PR image. We still persist in our exposure of eBay's inherent lack of visionary management.
eBay should still be on the upside of it's growth curve world wide. Instead, you see what we have.
Until, and unless, eBay management is cleared from the top, and the company returns to the business model which provided it's original greatness, what you now see shall continue to be the company's future pattern.
If you still hold stock in the company, get the heck out!
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1-22-2009 @ 1:56PM
and*the*horses*you*rode*in*on said...
Can't wait to see AMAZON's 4Q!
THAT will be GREAT!
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1-22-2009 @ 10:11PM
MS said...
Mr Donahoe wants to blame it all on the economy. Well what about all the changes you made to EBAY? Like that great new My eBay page which you claim 90% of the people love. I went on the site today and saw 1000+ post and it sure didn't look like 90% love it more like 99% hate it. I am a buyer and use to do a lot of buying on eBay but many of the sellers I bought from are gone-Gee could that have something to do with you poor results? You want to make eBay into another Amazon. com but it looks like you are making it a K-mart instead. What made eBay so enjoyable for buyers was the selection. You want to turn it into just another online store-there are plenty of them already.
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1-23-2009 @ 1:47AM
Jammit said...
It surprises me when analysts post these articulate spiels about Ebay and the Economy - it's all bullshit.
The people who run Ebay are so greedy and so corrupt and it's such a BAD company to do any business with that people are leaving and or refusing to use that dump of a website - and they are refusing to take any more shit from this company - ever again.
If you riff off, stand over and screw enough customers - there goes your business. The people who manage Ebay have shit on a real lot of people. BIG TIME.
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1-26-2009 @ 1:33AM
MM said...
I love the whole "Ebay shouldn't be used for auctions" assertion by Aaron Crowe. You're kidding right? Fixed price, convenience? Of course, that's what 7-11 is for. Convenience, fixed price, and a generous markup.
But just MAYBE some people want a widget at substantial savings, or maybe a widget from 1973 to complete their collection. Perhaps they could go to Walmart and pay a fixed price!
That really was a ridiculous comment Aaron.
They make money from auctions, because by the time they:
1. charge me to list an item.
2. charge me a final value fee for the sale of that item.
3. charge me to receive that money in Paypal, which they own.
4. multiply above 3 items by millions of auctions, then:
5. yes, they actually MAKE money at auctions!
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