eBay News Roundup

I was away for spring break and coming back Monday wanted to summarize some things going on in the world of eBay that is relevant for sellers:

• SOLD OUT! ChannelAdvisor Catalyst (April 28-30) is now sold out. Unfortunately our venue does have a hard limit on the number of people we can have in various presentation rooms and we are at our limit. This is interesting because earlier in the year we were wondering if e-commerce businesses would be investing in taking their business to the next level and expanding to new channels or if they would just hunker down in 09. I guess our concerns were wrong!
• Changes are coming! eBay is going to announce their big 1H09 changes Tuesday - we'll have reaction/analysis here. eBay previewed multi-sku at Catalyst UK, so I think we'll have some US details tomorrow.
• The Dreaded PayPal Call - More and more sellers are getting the 'dreaded PayPal call' where PP is asking them to keep a 3-5% 'reserve' going forward. For many sellers this can mean $20-100k locked up in your account indefinitely. More on this topic later, but be ready for the call when it comes.
• Skype - NYT reports that the Skype founders are preparing to make a bid to buy back the company from eBay. Having done a transaction similar to this (although microscopic in comparison), these kinds of deals can be very very very hard to get done so I wouldn't count on this one getting done. Also, it's interesting to think about an eBay Corp without Skype. This is one of those 'be careful what you ask for' kind of events as I think eBay would invest most of the proceeds in non-marketplace areas as they have historically and we'd be 5 steps further down the path of eBay corp becoming Paypal corp - the payments company with a little marketplace biz hung off the side.
• Gmarket - Speaking of marketplaces - NYT also reports that eBay is looking to buy more of Gmarket out of Korea. Gmarket has successfully blended fp and auction in Asia so there's some good geography expansion mixed with maybe some good solutions on what ails the US market to be had there.
• Wall St call - For you wall Sters out there, I'm doing a call with Justin Post @ ML/BOA tomorrow (4/14@11am ET ) to discuss the Q1 trends we saw and if the timing works we can talk about eBay's announced changes. Shoot Justin a note for details.
• eBay Earnings - Remember that eBay's earnings are set for April 22 after market close. We'll have the usual roundup here for that as well.

Disclosure: Author is long Amazon and Google

Comments

[Wake-Up!:]

Gee... I wonder how long it will be before eBay has "special incentives" for Korean sellers to offer their products on the US site? Just as China and now Japan have "special incentives" to flood the market with their products on the U.S. site...

Pretty soon eBay U.S. maybe just a name as they continually push out smaller sellers in favor of overseas garbage sellers.

Bad move GMarket.... you had a good thing going for yourselves. "Yourselves" and "had" being the keywords here.

jmo

Apr 13 01:30 PM

[Bob C:]

The old saying: "If life deals you lemons, make lemonade"
works in reverse at eBay Corp.
eBay's management has a knack for making lemons out of lemonade.

Skype is for sale, and StumbleUpon (Meg's folly) was sold today.
Bill Me Later is reported to be a year or so away from becoming anything resembling a viable eBay resource.
Sooner or later the Feds will catch up to PayPal's crooked ways.
Add to this the mess that eBay has made of its own "auction" site.

Mr Donahoe needs to be adjusting the cords on his parachute, shareholders have their fingers on the eject button.

Apr 13 08:54 PM

[Marcap:]

Like many businesses these days, eBay has only one objective: To increase its revenue. It has no regard for either its sellers (or its buyers) unless they are generating significant fees for eBay. And even if that means allowing tons of more junk on eBay with no protection for buyers, and no regard for other smaller sellers, unfortunately that is exactly what eBay will do. Donahoe is only interested in attracting sellers who are willing to list thousands of items at a time where obviously a few negs or poor DSRs will mean nothing in the overall scheme of things. Under Donahoe, eBay has clearly shown that it is no longer interested in being an "auction" site, and that it no longer cares about the little guy, despite some of eBay's claims to the contrary.

Apr 13 10:08 PM

[redbaron:]

'The Dreaded PayPal Call' -- Can anyone elaborate on this situation? Who would this apply to? How large would sellers have to be for this to be applicable? This is the first I had heard of this, so would appreciate some further information.

With the low money market yields now paid by PP, it would seem that there would have to be some signficiant incentives to encourage anyone to leave much in the way of additional funds in their PP account.

Apr 14 09:09 AM

[Marcap:]

It would appear that this new "reserve" requirement will be treated much the same as the 21-day hold that PayPal already place. It will only apply to some accounts such as new ones and/or trouble ones. The main difference however is that the reserve appears to be ongoing and based on either a percentage of sales or a specified amount, rather than just holding specific payments for 21 days. In fact here is the exact wording from PayPal's Policy Updates:

"PayPal, in its sole discretion, may place a Reserve on funds held in your Account when PayPal believes there may be a high level of risk associated with your Account. If PayPal places a Reserve on funds in your Account, they will be shown as “pending” in your PayPal Balance. If your Account is subject to a Reserve, PayPal will provide you with notice specifying the terms of the reserve. The terms may require that a certain percentage of the amounts received into your Account are held for a certain period of time, or that a certain amount of money is held in reserve, or anything else that PayPal determines is necessary to protect against the risk associated with your Account. PayPal may change the terms of the Reserve at any time by providing you with notice of the new terms."

You will find the above in Section "10. Reserves" here:

https://paypal.com/ca/cgi-bin/...

Again, like the 21-day hold, it does not appear that these "Reserves" will apply to the average seller who has been on PayPal for some time and is in good standing. But unfortunately, like many eBay and PayPal policies, they are vague to the point where I suspect that many of their own CSR's do not know what they really mean, or who they actually apply to.

On Apr 14 09:09 AM redbaron wrote:

> 'The Dreaded PayPal Call' -- Can anyone elaborate on this situation?
> Who would this apply to? How large would sellers have to be for
> this to be applicable? This is the first I had heard of this, so
> would appreciate some further information.
>
> With the low money market yields now paid by PP, it would seem that
> there would have to be some signficiant incentives to encourage anyone
> to leave much in the way of additional funds in their PP account.

Apr 14 09:53 AM

[Wake-Up!:]

Hmmm..... about those new PayPal reserves.... I wonder if they'll be collecting interest on your "reserves"? I mean if it has to remain as a back-up in your account, why not grab a little love money on the side with your funds?

I'm sure they won't allow you to collect any interest on YOUR money that they'll be holding in "reserve", eBay wouldn't do that, right? Not eBay...

Apr 14 10:13 AM

[Marcap:]

As with the current 21-day hold, I do not think the vast majority of PayPal members will not have to worry about reserves. Like the 21-day hold, reserves will likely only apply to those with new accounts and no track record, or to those with a higher than normal percentage of buyer complaints, such as items not received, items not as described, and so on. For those however who will be subjected to a reserve, I would doubt very much if PayPal will actually pay any interest on the reserve amount, and if they do, it will likely not be significant enough to satisfy those who will have their money held.

On Apr 14 10:13 AM Wake-Up! wrote:

>
> Hmmm..... about those new PayPal reserves.... I wonder if they'll
> be collecting interest on your "reserves"? I mean if it has to remain
> as a back-up in your account, why not grab a little love money on
> the side with your funds?
>
> I'm sure they won't allow you to collect any interest on YOUR money
> that they'll be holding in "reserve", eBay wouldn't do that, right?
> Not eBay...

Apr 14 11:56 AM

[Et tu, Brute!:]

'The Dreaded PayPal Call'

My thinking is that the hard times are catching up in ebay and Paypal is going to be the safety net.

Which means, of course, the SELLER has to float a company so seriously damaged by it's CEO.

Etsy recently sent out a questionnaire to its sellers asking if sellers were interested in other payment options. I am seeing more and more Paypal problems popping up on the Etsy forums.

Etsy is growing in leaps and bounds. It's the very best place to sell if you have handmade and/or vintage. You have payment options on Etsy; check, money order, cash, other, and Paypal. You can list an outside way to pay in your shop.

The whole Paypal situation makes me extaordinarily uneasy. It makes me wonder if, with a successfully growing entity such as Etsy, the Paypal machine is starting to take advantage and freeze accounts.

Some Etsy sellers are starting to experience their accounts being frozen, with Paypal asking questions such as when did the seller ship out, etc. While I understand Paypals position, this should be limitied; it is Etsy's call to check out their own sellers. If Paypal has issue, let them take it up with Etsy Administration one on one. A proper protacol. Very shady and underhand. They don't want Etsy Administratores to know how much they interfere in a sellers funds!

Me can't help but wonder if the Etsy Powers That Be are now, as a result, looking for more options so that their sellers aren't or can't be locked out! Paypal is a danger and I hope Etsy Admin is beginning to see that.

Apr 14 01:52 PM

[a. palmer jr.:]

I took my money, what little I have, out of PayPal. Nothing bad has happened to me but, after hearing all the horror stories from other eBayers, I thought I'd lay low for awhile. Now I have leftover merchandise and don't know where to sell it.

Apr 14 06:06 PM

[NYM Arts:]

Hi Scott,
We no longer need Ebay
For anything
BONANZLE

Apr 19 11:46 AM