Marty

eBay Is a Winning Bid - Barron's

Thanks Paticia, I know so many people that feel the same as us. As long as we are still around, Ebay still has a shot, but as the last of the last lose interest, the driving force disappears.

My email is [e-mail] keep in touch!

Marty

eBay Is a Winning Bid - Barron's

Patricia you are right about multiple user accounts. This makes the problem of Ebay's "active users" even more pronounced as many of those active accounts are just duplicate user accounts set up after Ebay introduced the stores product.

This sort of user meltdown was apparent and the main cause for the demise of AOL which was once thought never to lose their lead just as Ebay was.

It becomes more and more expensive to grab new users when existing users become less active or leave the site.

It is critical that Ebay realize this and stop pissing into the wind.

They need to capture the buying community in ways only they can and let people know through creative marketing and ads what they can buy on eBay.

Sellers need to have a place which excel in service but also in opportunity.

Back in 2006, Bill Cobb then President of Ebay North America, announced "store inventory would be going into Core search, in Jan of that year" . That quarter, which was awesome for sellers, saw and increase in Gross merchandise volume (sales of all sellers) and it even beat the holiday quarter that preceeded it. Sales exploded and new inventory was swamping the site. More hits for items newly searcable was pulling millions of store item up through google rankings and it was feeding on itself

A few months later, Ebay citing non-existant (in my view) "buyer confusion" realized that if it sold too much too quickly ,they would lose tons of money from people listing items over and over that DID NOT SELL. Yes, revenue from items that do not sell was declining as people could list cheaply and get found and sell. Our sales shot up from $1500 a month to $4500 like nothing.

Ebay reversed their "experiment" then slammed their own sellers by saying "store inventory was "slower , less desirable" etc etc.

Combined with fee increases, this change started the process of a migration to Amazon. New Amazon sellers took root, found success and then more followed. Ebay handed them this business.

Within a few years of its Start, Ebay Stores grew to be the largest web based merchant mall in the world, perhaps the biggest internet web success story ever.

But within months, they were talking about it like an old shoe, because the revenue model was such that the relisting of items that didnt sell over and over was so profitable that they couldnt forgo the revenue.

I begged for them to keep the system and change the fee structure as things were firing on all cylinders then. Instead they kept marching down that path, angering many of their best users, reversing a major decision then belittling their items.

Now they see GMV in decline, a user base went from 41% active to 18% active. Non-existant advertising and marketing campaigns, a 10% cut in their workforce (mainly good community orientated people), and despite plowing 4 billion into stock buybacks at prices way above where the stock is today the stock is still down 50%.

People who really know Ebay know what is going wrong. No one will listen though. It isnt that its a bad company, its that its losing the interest of the buying public and unwinding in much the same fashion as it wound up, and much like AOL unwound. The tipping point may have been reached but I am an eternal optimist and hopeful that sensability will return to management.

The employees at Ebay , when energized would return like horses to water in the desert. They are thirsty for a business model that reinvigorates this company just as users like I am . I have spoken to manhy of them and they feel the same but sometimes differ in their approach.

I wish them luck of course, but right now the same people that cash out on companies (BAIN CAPITAL) are running the show and Id look carefully at how they do things to see Ebay's future.

Marty

eBay's Skype Fiasco: What Were They Thinking?

Can you say MICROHOOBAY??

Marty

eBay Is a Winning Bid - Barron's

Oh and I met Meg Whitman! LOL I liked Meg!

I havent med John Donahoe so I cant comment on him. Id love to meet him and combine what he is doing with what needs to be done for the community. JD can reach me at [e-mail] LOL

Marty

eBay Is a Winning Bid - Barron's

Ebay is a great company with lots of potential. However their current course over the last few years as been one that alienated their users and one which was in direct conflict with what brought them success.

If you really want to know what is going on with eBay just carefully reviews the total registered users and active registered users.

In 2006 41% of their users were actively trading (buying,selling listing items on the site in a 12 month period. Now that number is like 18%. There is incredible user churn. When I noticed active user growth was going to turn negative they actually took the numbers you needed to see this churn OUT of the quarterly reports. They just returned this quarter.

This company can do extremely well once they get a course which does the following..

1- Actively addresses the "Local" markets which can be a whole new reason to "Ebay" .

2- Really opens the global marketplace not hides items from country to country

3- Brings its users (buyers and sellers) into wanting to trade here as opposed to elsewhere through effective advertising auto-affiliating active users to have them participate in the growth of the site.

4- Stop tinkering with trying to show people what they want to buy and ruining the broad nature of the "find everything" marketplace they created.

One example, on a local site for Ebay all Ebays properties could benefit, rent.com, tickets through ebay tickets or stubhub, real estate , new service areas, restaurant certificates etc AND whole new areas of trading like larger harder to ship items like furniture and other heavy things.

Also by auto-affiliation here is what I mean. Many users are turned off by ads plastered all over the site, even on users own listings. Make sellers part of the team by cutting them in an ad revenue for ads on their listings, on content they create to showcase their items and on cross-sales of other customers items found through their items AND on new users that sign up from seeing their item.

This would make Ebay the only place where sellers could benefit from sales of items, content ads, cross-sales, and new users. It would make each item placed on the site more valuable.

There are amazing people working at Ebay. There are great people active in the ebay community. But most people I know with a good understanding of the site feel the same way I do. And its not an "Ebay hater" thing, its a concern for a great place going in the wrong direction.

Experience...

Seller on Ebay since 2004
Trading assistant on Ebay (sell for others)
Owned Ebay store since 2005
Wife was an Ebay Teacher (Educational specialist)
Member of focus group for Ebay
Sold over 7,000 items on the site, feedback over 5000 100% positive.
Leader of one of the best seller groups on Ebay
Featured in a few books on Ebay
Winner of 2007 Ebay Hall of Fame Award
Bought hundreds of items on the site.
Introduced hundreds of people to ebay through classes and friendship

Marty

What Will Become of eBay?

Well , there are many reasons I like Ebay but the author has the 39% listing growth WRONG. Ebay created a new format 30 day fixed price listings. As a result many listing that would have expired in 7 days now last 30 days making the numbers look higher. Also many of those listings are transfers from Store format due to the new longer format and cheaper prices. You guys really need to work your numbers with people that understand the different formats and pricing.

For example a year or so ago CORE format (auction/fixed price) was once about 70 cents (35 cents to insert it 35 cents for a gallery picture) for a 7 day listing. NOW , they eliminated the gallery picture fee so the fee is 35 Cents for as long as 30 days. Of course listing numbers are going to be different.

The decline in traffic and slower unique visitor build is really the guts of the problem and one Ebay can correct. This is the most poorly marketed brand name on the planet. They squandered goodwill, hurt their base, advertised poorly ,never appealed to the second generation internet people and youth and gummed lots of things up.

I can say the people that work for Ebay for the most part are awesome (both past employees and current ones). Some have a feel for what must be done and what has gone wrong. Some changes have been made and more will come.

This stock should be humming with a downturn like this as it creates tons of supply of low cost stuff to buy and buyers are seeking low cost stuff in a downturn as well.

Incredible collections of collectibles are coming on to the market for the first time in a long time and if Ebay could get on track it could use this downturn to it advantage.

I hope for the best for the people at Ebay and their shareholders.

Marty

eBay Is a Losing Bid - Barron's

Incredible potential, incredibly being wasted in my opinion. Great people working at ebay, lots of good idea burried , its customers ignored. Not sure what will turn this around but I wouldnt count them out, they need to get back to the roots of how they grew, from excitement, word of mouth and making Ebay a great place everyone wants to be.

Another huge issue is that with seller contentment way down, other factors like the worst economy since the Depression have Ebay taking the heat for all problems even though generated by less consumer spending in a bad economy.

While people do unload junk when the economy slows down there seems to be fewer reasons to unload it on ebay. Few if any bids, constantly changing direction etc. The fastest growing areas of the market (local trading and buy online pick up in person/store) were persued by Ebay as "Ebay Local" announced, then burried while Craigslist grew at 90% over the last few years.

The potential is here, I am not really sure what the problem is. You need people that understand why Ebay worked to replace the consultant types, or at least take them somewhere and hit em in the head with some water balloons! LOL

Marty

Amazon Checkout: Stiff Competition for PayPal?

Scott, excellent post, great job with the pros and cons. I do not always agree with your analysis on things but you did an excellent job here. :) - Marty

PS Are you seeing any trends with the economy from your end? Less high end buying? More emphasis on free shipping? Any movement to the Walmart/Ace hardware shop online pick up in person? Thanks! [e-mail]

Innovate or Die: eBay at a Crossroads

Randy interesting comparison. It is funny you chose Kodak. A simple well done commercial showed me their recent turnaround and I think they have finally "got it". As an aside Ebayers should check out there advertised special to hook you into their new product at kodakoffer.com. Seems like a great deal that even I (with 4 printers already cant turn down LOL)

While I agree with some of what you say about Ebay. I think the innovation is closer than they think and the problems different than you think.

I do not think the new emphasis on fixed price will kill the higher margin auction business. I think in the long run it will help improve auctions to be just for those items that belong on auction , which will benefit everyone. I see some huge positives, some things they are missing and some mistakes.

Positives..

1- STORES BACK IN CORE-Moving back towards stores in core search with the new Italy model making store items 30 days fixed price items for store like insertion fees based on store subscription level.

2- INTERNATIONAL EXPOSURE-(Randy dive into this one on your blog)- This is a total homerun and I almost missed some of the reasons it would be. Stage one our ebay.com items can be promoted on the UK site. Our intl sales have really picked up, but we are also getting better regional indexing in search engines AND there are people that hop around ebay sites that find our stuff on the UK site, like ebay.it buyers and others. If this program expands, this will ping-pong people all over the place in terms of buyers and items. It is really working and Id love to share some stats with you for review.

MISSING...

1- EBay Local - After announcing this program at Ebay Live they died on it. Currently shop online pick up in person is the fastest growing area of the internet leading players like Walmart.com and others with 40% plus growth rates. While not perfect for all Ebayers all of Ebays properties play right into this idea. From Stubhub's tickets to larger local items to vehicles , educational specialists and trading assistants , the time for local hubs has returned. In my opinion they are missing a huge opportunity that an Amazon cant match.

MISTAKES...

1- DSR/FEEDBACK - While it is clear there have been some positives from the DSR/Feedback changes I think the effects on the community have been devastating in many cases. I also think the goal to show more differentiation of sellers is really not being met.
For example, sellers that worked hard and had 99.9 percent feedback ratings, found their nuetrals become negatives in the calculations and a new 98.4 percent rating. That does nothing to discourage buyers but has upset that seller. Second, and this is something Id love your opinion on. Buyers seem to buy more items from larger sellers with lower DSRs and lower feedback despite the search exposure decrease they are supposed to get. In looking over some stats it seemed to me that (as reported by others) larger sellers fell in the bottom 50-60% of Ebay sellers in DSRs and in feedback and not only had high sales but the fastest increasing sales. This shows me that buyers really dont care all that much if someone has a 4.9 or a 4.6 or 99.9 or 98.5 feedback. I worry that the effect on the community is just another thing that is forcing people off the site. Its not one thing its many things over time. I want those people here as they are providing diversity of items and they are also buyers.

Thanks for your thoughts on things.

Marty

Amazon Toying with Vertical Integration

Very well done article, thank you! Whatever Bezos is up to it is always interesting. I have always enjoyed shopping on Amazon and keep an eye on what they are doing since I am a seller on Ebay. The info on Booksurge is intersting and makes a lot of sense.

One risk I see though is that much of Amazon's recent success came from a few mistakes Ebay made by allowing millions of items to transition off the site when it raised fees and made some comments about its own stores product that left some bewildered.

However, Ebay has lowered fees, attracted many of the larger sellers back and also is working on numerous trials which seem to imply lower fees are coming (from blog posts I have read). It is not so much the people that had moved but the line of people that follow when people have success (as they have on Amazon). When this process reverses ,Amazon will lose that surge to the growth profile.

Marty

Sell on the News: eBay Shares Slide Today

I am an Ebay seller, generally supportive of the company but I believe in the last few years they have lost their way trying to become and Amazon clone. First some stats taken from Ebays Quarterly reports. The percentage of registered users staying active is dropping fast.

In 2006 , when I felt Ebay was firing on all cylinders when stores were in core user growth was humming etc.

1st Quarter 2006

193 million registered users of which 75.4 million or (40%) were active

Two years later ...1st Quarter 2008

309 million registered users of which 83.9 million were active (27%)

First of all note that 116 million registered users were added but Active registered users only went up about 8 million. Those numbers show an incredibly high churn rate.

In the last few weeks Ebay removed the Ebay Wiki which was built by its members (with no notice) , banned Digital delivery of items like Ebooks, templates, etc), announced they are closing down Live Auctions on the site in 8 months or so and keep moving to a homogenized look which is leaving the community befuddled (at best).

At a time when the US dollar is low in relation to foreign currencies the countries users with stronger currencies cannot see US items unless they change their settings on Ebay.

People came to Ebay to sell things in the new world of the internet. It was exciting, it brought a sense of connection and community. First collectibles but then a market for other items developed. As Ebay expanded worldwide more opportunity seemed to be there.

Right now, Ebays mistakes over the last few years are masked by huge foreign currency exchange differences that are making the 50% of its income derived from foreign countries appear much larger and it is not reflective of strong growth in those markets.

Flat earnings in EUROS for example increased 30% in US dollars over 2 years.

When EBay raised fees in the fall of 2006, it lost millions of items and thousands of sellers. Many went to Amazon and other sites. They saw some success and told other people.

Just as Ebay was formed it can unwind. This is my worry.

It is my opinion that on the current track , Ebay will totally lose its ability to turn this around as user growth continues to be strained.

You cannot have those levels of turnover and succeed. This is exactly what brought down AOL when even MSN couldnt catch it back in the days of online services.

I sell on Ebay, and think that led in the right direction, they could re-invent the glory of what they were. My advice would be ...

1- Stop trying to stamp out the diversity

2- Open up the Intl markets to cross border trading instead of protecting them

3- Buy the remaining 80% of Mercado Libre , the south American Ebay and open up those markets .

4- Let all the people connect, and focus on the connection of the world that is found on Ebay through products, ideas, services etc.

5- Integrate all this with their World of Good and Givingworks programs already active in doing good things world-wide.

6- Use IBMS "MAstor" voice translation program to develop international trading on a new level.

7- Develop the Local Markets as they did in 1999-2000 when they were too early (as broadband growth was minimal then). Ebay Local, announced in 2007 was supposed to be coming but then again it might have been canned. With shipping costs an issue lately , local delivery options and just in time buying could be a whole new market.

I love the company, hate the direction. I dont pretend to have all the answers or always be right but I can say I have a good feel for those around me (fellow sellers) and this is not the correct path to grow the site.

Marty

e-Commerce Set to Soar in 2008

Scott , one of your best posts yet with some excellent info! Question for you! Whenever I look at the breakout of the online retail growth I see computers, electronics, Gaming and games etc making up for a large chunk of the growth. When I last saw this breakdown I think Apparel was the only one other than these that broke the top 5 with most having much lower growth if any. Since the big players have such a large role in computer , electronics and gaming do you figure that other online retailers will see a somewhat slower level of growth? Its hard to extrapolate exact data of course but if I see for example Gaming growing 34% and it is already near the top showing huge numbers that growth alone is skewing the numbers.

I think most people see 17% and think health growth across the board when in fact its 30-40% on the already massive electronic, iphones, computers, gaming and much less in other places.

Thoughts on that?

Thanks for all the info you provide. I love the charts above!

Marty

Not Seeing a 'Better & Safer' eBay

Well I dont think its all that bad Dinah! I have seen almost all those problems you mention from time to time, but I want to add my one concern.

All the efforts at security, DSRs , feedback changes, punishments for sellers etc, have left the site a battlefield instead of a rich farmland that will grow the business in the coming years.

Announced improvements never seem to materialize, while the site emphasizes these areas to improve "the buyer experience".

Most sellers do not feel plastering ads all over the site is improving the buyer experience. Many large sellers didnt have great feedback but you know buyers kept buying from them anyway. Just as Walmart has that 70% or lower customer satisfaction rate yet keeps bringing in the buyers.

Too many changes of one kind and not enough excitement and new ideas coming forward. I can give many examples but Im all talked out on this subject. Like everyone else, just keeping up with the changes is a full time job.

Perhaps Ebay will finally finish this cycle of change and move on to better things. The site still inspires passionate comments both positive and negative and it will only be when everyone is silent that the opportunities will end.

Marty

eBay Watch: Q1 Predictions for eBay and Marketplaces

I am somewhat curious if you considered the effect of insertion fees falling by 50% or more to get to those higher listing numbers? I am not saying your top line estimates are wrong. But if you cut prices by 50% and listings go up 15% (questionable based on what I see) is that a success? Are you taking into account the fee cuts? IF bananas cost 1.00 and you sell 1 million but now they cost 50 cents and you sell 1.15 million are you doing better or worse?

This quarter past quarter (and judging by todays employment numbers) the following quarter will benefit most from the effect of dollar deflation on the companies global GMV and earnings.

There is some very good news in your article though. Taking the affiliate program in house is way overdue and I think could be a big earnings plus for the company. I think the new fee structure for eBay stores (going back to a 50% listing fee cut) brings EBay store fees to the level before there was a mass exodus of store owners. I hope this brings people back to the site. Cutting media insertion fees to 25 cents including gallery photos is also a useful change.

There are some definate positives. On the negative side Ebay's emphasis on DSR (detailed seller ratings) and changing the decade old feedback system have yet another batch of Ebayers disgusted and leaving.

Personally I love the site. I feel bad when long time sellers/buyers leave and wonder if Ebay is really guaging what is important here.

As you know noone mentioned that NET active user growth figures that Ebay releases quarterly. The line has been down for years and 2 quarters ago this went negative for the first time in the company's history. When you have more users going inactive then new users coming on as active you have something that needs to be changed. I worry about this pattern.

Also , I saw the last few quarters earnings has being suspect.

The currency exchange difference, one time tax effect and the effect of selling near 100 million dollars in ads on the site are all what seemed to boost earnings to me not "organic growth" as you state. Also despite a 4-5 billion two pronged stock buyback which is 2/3 done the stock had falled fropm 42 to less than 30 before the recent bounce after the last announcement.

There are some other moves ebay can make but right now I still see the jury as being out. IF there is a surprise it will be because of currency inflated foreign earnings.

Marty

Analysts: eBay's Current Quarter Tracking Well

Insertion fees for listings have fallen 50% for most listings , even more for media listing. Listing totals SHOULD be up given this decrease and the recent 1 cent listing sales for the last week of March. I think listing numbers are anemic considering the degree to which the fees to insert listings have declined. Look at the Medved statistics for 2007 and 2008 . You will find the 2007 Jan low in listings was 800k higher than the 2008 low, you will also find a mean level of listings in the 14 million range over the first few months of 2007 , and a higher "high" point of 19 million listings in 2007 vs 2008s first quarter high of 16 million or so and a settling in range of about 13 million.

That said Ebay knows how to make their numbers what they need. I am not as concerned with listing numbers as I am with the direction the site is going and the response within the community.

The stock is due for a bounce, I mean they have been in the middle of a 4 billion plus stock buyback as the stock had declined 40% or so. It is a good company, but I would like to see better advertising, a sign of a partnership with its users to bring the company forward and less tension.

While Ebay has focused on feedback and detailed seller ratings changes and moved fees up then down , it hasnt brought anything new and exciting forward, has disappointed with its media campaigns and has unnecessarily angered many in its user base.

I am hopeful this period will be put behind it, and things will return to the good times of the past.

Marty