As eBay sales decline, there is one product category on its platform that is growing by double digits.
A week after eBay reported a 10% decline in third-quarter sales, it issued a press release in which it bragged that sales in its Sneakers category continued to grow at double-digit rates.
How is eBay doing so well in Sneakers? It’s been showering it with attention and instituting special policies, fees, and services. eBay runs special sneaker promotions that get media attention, like the one it announced on Friday. It offers a sneaker authentication service to boost buyer confidence. And eBay charges no commission fees on sneakers that sell for over $100 to attract listings for sought-after goods.
Last year, eBay’s interim CEO Scott Schenkel addressed the zero take-rate model at a Wall Street conference, stating that “Free is not a strategy for us,” but saying that sellers were buying more Promoted Listing ads – “so we are getting a take rate.”
eBay is also investing resources into a small number of other categories, including Luxury Watches, Trading Cards, and Handbags.
But what if you don’t sell sneakers (or watches, trading cards, or handbags)? Why doesn’t eBay shower the same attention across all categories? eBay CEO Jamie Iannone is promising Wall Street that its strategy is scalable, but whether that’s true and how long it might take are the questions sellers may be asking, especially with the recent disclosure that the number of active buyers on eBay is in decline.
Iannone said eBay had applied the vertical-category strategy to 10% of global GMV at the end of the second quarter (June 30, 2021) and said it’s on track to expand it to roughly 20% of GMV by the end of the year.
eBay executives call the vertical strategy its “innovation playbook,” and Chief Financial Officer Steve Priest said eBay will expand the playbook to more categories and countries – next up is Motors Parts and Accessories, Iannone said.