Q1 Data Bodes Well for eBay's New Fees

It's working! Since mid-2004, eBay (EBAY) datapoints have been painfully and irreversibly slowing: Listings growth, GMV growth and active buyer growth.

Unless you've been living under a rock, you know that eBay has started rolling out the changes they announced back in January throughout Q1.

On Feb 20, gallery was set free and the new fees came into effect.

March 3rd, eBay rolled BestMatch as the default search.

The results have been very profound, measurable and positive. The much covered 'boycott' didn't cause any decrease in listings or buyer activity that we could see. (I'm sure I'll get flamed for saying that, but there it is folks.).

First on Feb 20, conversion rates started a nice climb - especially for those sellers in the media categories that previously couldn't justify gallery. By our calculations many media sellers saw conversions increase 2-5%.

Then the media+fixed priced sellers started listing a little bit more. That saw some increased sales, and then sellers increased listings some more and that cycle is still continuing.

Then on March 3rd when eBay rolled BestMatch, we saw an even larger and more across-the-board conversion bump. We've got some sellers seeing a 10-20% increase in conversions. I haven't seen anything this dramatically positive on eBay in a LOOOOOONGGGG time.

If you're still with me, listings are up, conversions are up and that means..... yep, GMV is up nicely and so far it's continuing its upward path.

As sellers see the results, they will tend to continue to list more (to balance conversions) and if the conversion rates hold, we'll see even more GMV coming out of the system.

At ChannelAdvisor we provide our customers with lots of real-time data on their sales and other vital stats and it allows them to react quickly, so they tend to be ahead of the curve. As the long-tail of eBay sellers see their eBay bills and start doing the math, they also will start to adjust their listings volume.

The much maligned DSRs are working. Once BestMatch kicked in, we saw the difference between seller exposure really spread out dramatically. Since the S+H cost DSR is usually the lowest, it's the one that tends to key seller advantaging/disadvantaging. When sellers heard the 5%/15% discounts, they did the math and for most it didn't make sense to change their S+H prices. But now when sellers see they are losing share/conversions due to poor S+H prices/ratings, sellers are starting to test different communication practices and look for ways to lower S+H fees. If eBay's data show that buyers don't like eBay's S+H, then the focus on S+H prices and practices should be dynamite for the ecosystem.

For the first time in years, I'm starting to see a light at the end of the dark eBay tunnel we've been in. I'm interested to see when these trends will plateau out and if eBay will turn the crank again on fees, lowering listings and raising FVFs. Also we still don't have Finding 2.0 or the feedback changes out yet, so there are two other big changes out there waiting to hit the system.

It's going to be interesting to see how Q1 came out for eBay - particularly on the y/y GMV growth which I think should look pretty good. I'm also very curious to see if there are any signs of life in the active buyer data that eBay typically reports.

Usually analysts ask if these positive eBay indications mean bad news for Amazon. We don't see any slow down there so I don't think so, it's not always a zero sum game at the seller GMV level, and while eBay is perking up, it's going to take some time for it to have any impact on Amazon's incredible momentum.

Disclosure: I am long Google.

Comments

[jrkirk]

Listing numbers mean nothing, as these numbers have been manipulated by eBay's 'test listings'. This has been very well documented elsewhere in these blogs. You can believe other-wise, if you want, but why else would eBay do test listings at this time?

[Dinah Balk]

So you think best match is better? I used to sell $700 to $1,000 monthly but haven't sold one damned thing since they put the collectibles category in the best match test mode & ultimately as the default. This is true for many other collectible sellers.

And since when are shopping.com lstings counted as eBay listings? This sounds more like Donahoe is cooking the books and the only light I see at the end of the tunnel is a train derailing because sellers are going on a month long strike in May.

Beachy

[debipier]

Ebay continues to lie about all of their numbers... They have padded listings to cover their huge theft to the small seller on ebay!!

They set the seller up to fail with a sytem that rates on a star system...

Say they're lowering fees but it turns out in the fine print that the fees are actually being raised 67% for the majority of sellers.

Take away the ability to let other sellers know when there's a buyer who will rip them off...

Gives the buyer 20 times to steal from sellers on ebay before getting removed from the buyer experience!!

Take away the ability to screen for shill bidding on the buyers behalf, setting them up for bad competition.

Make a search engine that only shows a percentage of auctions on your dishonest star system.

Force the use of paypal which is co owned by ebay and then hold payments from sellers for 21 days ; expecting them to ship merchandise that they may never be paid for!!

And now you offer to pay people to their friends to shop on your overpriced monopoly website????

OMGoodness!!

I'm running from that site as quickly as I can!!

BOYCOTT VICTORIOUSLY!!

[Carol]

Author is CEO of ChannelAdvisor. ChannelAdvisor makes a living from ebay sellers. Thus the author is not ojective and his cheerleading is just that. Means nothing, worth nothing.

[whoiskiddingwho]

The author has his head in the sand, just as the other people with a vested interest have. Poster Debipier has the situation summed up very well. Interesting that these wonderful and enlightening (not) blogs only appear when ebay needs the stock price shoring up, much the same way that the test/glitch/error/what... listings appear when the listing numbers need shoring up, all just a corporate illusion for the benefit of the unknowing, but all WILL be revealed in time.

[hancitomarinela]

wow this guy a is areally kiss **s of ebay

[Tony P.]

"Then on March 3rd when eBay rolled BestMatch, we saw an even larger and more across-the-board conversion bump."


Yep, you are right on, Scot. On March 3rd, the Sell Through Rate (conversions, to you non-sellers) rose by 7%. Then, for the next 3 days it fell by 21%.

That is One step forward and THREE steps backward.

Man, you got some great analytical skills there! Just look for that sweet spot and those rosey colored specs will reveal IT. Maybe Bear Sterns could use your abilities, right about now.

[User 164913]

ARE YOU INSANE? GET DOWN IN THE TRENCHES WITH THE SELLERS AND ASK THOSE WHO ARE THE BACKBONE OF EBAY. ASK THEM HOW EBAY'S CHANGES ARE AFFECTING THEM AND IT'S NOT FOR THE GOOD

[meanwhile]

significant numbers of paying customers aboard ebays 'good ship venue' are shouting from the decks ''iceberg dead ahead''.

they are hoping captain donahue, the ebay shipping line, or even the founder designer pierre, might hear them, take heed and change course, toward safe calm waters, inwhich to weather out the brewing economic storm.

meanwhile.......

the author of this article raises the telescope to a blind eye...................

[User 165184]

Wow; one positive article about ebay and you all freak out. Maybe it's because things aren't as bad as you thought they would be and it scares you that your yarn and kitten store isnt making you as rich as you thought it would. Maybe it scares you that the new feedback system will force you to be honest with your buyers since they no longer have to worry about retaliation for paying a minute past 24 hours or telling you "hey one month is a little long for shipping".

As far as the "boycott" in May; yeah I see that the first scheduled boycott when the announcement was made went sooooo well. Business went on as usual. Why don't you grow up and become professional for once in your life? That "boycott" if you can call it that hurt the sellers more than it would ever hurt ebay.

Take it for what it really is; good news about ebay for once. Deal with it.

[meanwhile]

hey user 165184....

you say '' one positive article '' - well whys that, why is it literally 'out there' so unique, so alone ?

you say '' freak out '' - why the low blow intimating irrational thought, no ones freaking out here, but, there are many who are sincerely concerned.

and then to use your own (borrowed) expression 'WOW' , you deride solid folk here as yarn and kitten store, dishonest, unpro' sellers with out the capacity or intellect to use reverse gear if they take a wrong turn......

you also say - ''grow up'', '' become professional ''

well i say practice what you preach and scrap the gutter scraping slur tactic.

meanwhile....

caring friends of the big guy, will brave the paid mercenary guards and yes mens best blocking efforts, they will tell the emperor the truth as they know it, especially when he might catch a cold !

[BuyitNow]

The author rarely praises eBay -- look at his history of blog flogs on EBAY. Scot has pissed on Meg and her team in the past, and I suspect he'll piss on JohnNewBoy when appropriate. Maybe you don't like the business model side of the changes - tough, it's their business model. We'll see when earnings come out, and guidance is given.

[boycottmay1]

Any idiot can see that Scot's claims are biased and inaccurate - obviously Scot can be bought for untruths which reveals his misplaced values. The numbers will talk and the stockbrokers are watching - bottom line.

A poor attempt at damage control Scott -