EcommerceBytes-NewsFlash, Number 2206 - January 21, 2010 2 of 2
eBay CEO Tells Analysts Company Will Rebalance U.S. Marketplace
By Ina Steiner
eBay hosted a call Wednesday with Wall Street analysts, who had a chance to ask eBay CEO John Donahoe and CFO Bob Swan questions after their presentations following the release of Q4-2009 earnings. Mr. Donahoe spoke several times about rebalancing the U.S. marketplace as it had done in Europe, indicating the company would adjust its fee structure on eBay.com.
Mr. Donahoe covered some of the services and trends at eBay in his presentation, including:
- PayPal performance
- Progress at eBay Marketplaces
- International Marketplaces performance
- Fashion Vault
- Trusted marketplace, Top Rated Sellers
- Technology and Mobile
Mr. Donahoe said exports from Chinese sellers doubled in Q4 to over 15 million units. And, "in Europe, we have successfully transformed our seller value proposition and business model over the past 18 months. By offering lower insertion fees to our sellers, we have almost doubled the number of live listings, a significant increase in selection. We plan to adopt similar best practices in the U.S. in early 2010."
In North America, eBay experienced early success with its Fashion Vault pilots. "Popular items sold out in hours and drove strong incremental sales for our sellers," he said.
Later, in answering a question from an analyst, Mr. Donahoe said that in Germany and the UK, eBay could differentiate business sellers from consumer sellers, unlike in the United States, and so it was able to put in place different pricing for businesses versus consumers. "We particularly lowered insertion fees on fixed price."
He went on to say, "So I think what we’ll do in 2010 is take some of the learnings that we generated outside the U.S. and apply them as appropriate and as tailored to the U.S. market. I think we feel we've proven out some of these things outside the U.S. and they will apply inside the U.S."
More on Changes to Fees
In answering a question about take-rates, John Donahoe said eBay made significant changes in rebalancing front-end versus back-end fees. He said eBay was about 70/30 front-end to back-end since the beginning of 2008, and, "today, going into 2010, eBay is more 30/70: 30% front-end, 70% back-end." He said that those changes align eBay's incentives with those of its sellers: "If they don't succeed in selling, we don't succeed in collecting fees."
He again spoke about rebalancing the U.S. marketplace, stating that eBay would make a few more changes in 2010 that, "I think have to do with taking the learnings from Europe and applying them in the U.S. about rebalancing."
Initiatives in 2010
John Donahoe talked about initiatives in 2010. He said he was pleased with where eBay was as it entered the new year, said, "I love all my children, not just one, so I will list three things that I am looking forward to in 2010 in the marketplace business."
- Enhanced buyer protection.
- Value and selection with pricing and continued improvement in search. ("You recall Mark Carges talking about our approach to technology in search at our Analyst Day. We are absolutely becoming a more technology-driven company, and our search team is increasingly top notch.")
- User experience. ("I think what is going to be fun about 2010 is you're going to see some real differences in the eBay user experience. You will see this most notably in Clothing, Shoes & Accessories about mid-year where the eBay experience, as you know it, will look very different, and you'll see us taking advantage of how we bring the unique inventory we have to buyers in some new and creative ways.")
High Volume Sellers
An analyst asked Mr. Donahoe about mobile commerce and exclusive brands. He said mobile was at an inflection point, and said, "we intend to be all over it." In terms of the exclusive inventory, he said eBay's Marketplaces' seller team was out talking with several brands and several people that have inventory.
"I think 2009 was the year of proving we could move high volume SKUs in very short periods of time, and I think we've done that, and so there are certainly a growing number of people who want to talk about distributing on eBay. And in some cases, that will be exclusive and others it won't, but we feel poised to take advantage of this, I'll call it the Private Sales trend, where retailers are looking to get rid of high quality branded goods in quick and efficient ways online."
Additional AuctionBytes coverage is found in this article "eBay Q4-2009 Revenue Up, But Marketplace Turnaround Uncertain."
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About the author:
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to email@example.com.
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