While working on Wednesday's webinar, I re-read eBay's Q2 results.
They reported that 43% of eBay's business is now fixed-price. That would make eBay 'fixed-price' effectively a $27B marketplace. Analysts guesstimate Amazon's (AMZN) 3P GMV at $4-6B.
Also, eBay's (EBAY) definition of fixed-price understates it substantially I believe. In eBay's definition it would be store listings, fixed-price listings and auction/bin where the user chose BIN.
Think of how many auctions close with one bidder. In my mind those are transactions that should/could have been fixed-price. I'd say that something like 40% of the auctions I checked in our dataset have one bidder. With this expanded Wingo definition of fixed-price, I bet fixed-price is already 60-70% of eBay's GMV. Also, eBay's 43% is by GMV, not transactions. Most Motors/passenger vehicles are still auction-style listings and media is dominated by fixed-price so auctions I'd bet have a much higher ASP than fixed-price, so if you looked at the %'s by transaction you could get this number into the high 70%'s.
I guess my point is that eBay maybe much more down the fixed-price path than everyone realizes....
Disclosure: I am long google and ebay
This article has 6 comments:
With eBay's new feature of 35 cents for a 30 day listing the seller will get a much better deal because with BIN the buyer has to pay on the spot!
However, feedback system with eBay is still a big problem! A buyer can leave a negative for any seller regardless of good service and or product!
For three years now I have been watching my stock with eBay sink into oblivion. I have lost 36% of my money invested with eBay and I truly wonder if this company ever thinks of their shareholders? Why do they not pay a dividend? Nobody trusts a company that is headed no where! Sellers and buyers alike!
eBay needs to fix themselves and quick!
I wouldn't count on the 35 cent listings getting much exposure or items having more than one bid because eBay started two new guinea pig tests.
Test 1 - new beta search. There's no way for the average user to opt out & I doubt seriously if even God could find IT.
Test 2 - new beta selling form. This is hiding items & sellers w/stores have discovered their store categories have been zapped along with their inventory.
And it gets worse. eBay is hiding approximately 25% of all listings, best match is tossing alleged dups into a black void & Paypal is holding a lot more seller's funds for 21+ days.
Have a great 3 day weekend!
forums.ebay.com/db2/th...
The comments are as much an eye-opener as anything else. Contempt.
Well over 50% of the sellers I purchased from regularly are gone.
Not to mention the fact that the sellers would have made a better ROI and ebay would have seen "its" GMV increase. I guess we'll just never know.
Speaking of GMV... if FP makes up '70% of transactions' AND the majority of those transactions are small-revenue media items AND ebay wants even more FP listings.. does ebay want less GMV?
FP does replace/displace auctions, in case you haven't noticed. Otherwise, the GMV would have simply surged upward as more FP came to the site and auctions remained at their level of GMV contribution.
Since FP is seen as the "growth provider", how's it been doing while being catered to and praised as the Obvious Method of Purchasing Choice for Buyers?
Fixed Price percentage of GMV:
6-30-04 ~ 27%
6-30-05 ~ 29%
6-30-06 ~ 35%
6-30-07 ~ 39%
6-30-08 ~ 43%
Impressive! As more Buy-It-Now items made their way onto the ebay platform (as per ebay's own figures), they were actually purchased. What a totally novel concept! Provide the Supply and Demand comes into play.
As the Supply became glutted, cut-throat pricing practices took place. The buying public somehow managed to figure out that rock-bottom prices, cheaper than in retail stores, should be purchased. Oh, that buying public, they're pretty sharp!
If only we could get Target, Wal-Mart and K-mart to open stores, together, inside of one large complex - we could have the same kind of price war. But it wouldn't last, just like it hasn't lasted on ebay.
The trouble is, ebay kept taking a bigger cut from those FP sellers, year after year. Sometimes, twice within a single year. Now, those FP prices (incl shipping), aren't as attractive as their traditional retail counterparts.
So ebay is now attempting to put a 'Stick' to the FP seller's backside, in hopes that they will offer Free Shipping and give the impression of a lower 'total price'. Not a truly lower price, just the impression (give or take a little bit).
It really won't help all that much (Wal-Mart’s still cheaper), because sellers will simply add the cost of shipping to the selling price. It seems that somebody forgot to tell the USPS, Fed Ex and UPS that they are supposed to provide their services for FREE.
Anyhoo, a couple more years and FP should be able to sit at the Grownup table. Until then, shaddup and give praise where it's due. My math says that 53% is a majority.
Auctions rule!
Ebay new feedback policies are a total joke from a sellers standpoint, sellers have no recourse at all now and thus are exploring other avenues to sell their wares. Ebay is trying to patter itself after Wal Mart, where the buyer has all the rights to return the item if not satisifed for a full refund and the seller is basically at the mercy of the buyer now. Problem is most auction items are not new items in factory packaging ready to ship, can you imagine having these same policies that ebay now has with your local garage sale?, no problem, if your not happy just bring it back for a full refund, and if we shipped it to you we'll even pay the shipping both ways, so for sellers fixed price is about the only way you can really sell on ebay. I could go on and on about ebay policies that to me have ruined the company, don't look for the stock to hit any record highs in the future in my opinion, also check out how much stock Meg has been unloading in the last 16 months, to the tune of around 400 million, that tells you something about her thoughts about the future of the company. Ebay is like the Gestapo towards their sellers, and they wonder why it's slowing dieing off, notice the short term boost in the sales numbers coinsides with all their recent promotions and coupons, just gimmicks to get though another quarter and get the stock up enough so senior managment can unload more large blocks of it.