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Mon Mar 31 2008 13:14:50

Impact of eBay Changes - Too Early to Call

By: Ina Steiner

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Wall Street guru Henry Blodget took a look at Bear Stearn's latest eBay listing data and pronounced, "eBay Price Changes Worked." But he failed to look at the impact of eBay's latest promotion.

eBay held a 1-cent listing promotion for auctions listed at under one dollar from March 25 - March 31, which not coincidentally is the last week of the first quarter. eBay knows analysts study the listing data and they "push a few levers," to use the words of outgoing CEO Meg Whitman, when they need to pump up the listings count.

While Total listings growth is up 35 percent for the week ended 3/28/08 compared to the same week last year, according to Bear Stearns, it's only up 13% when you compare the entire quarter-to-date year over year.

And if you look at quarterly growth YOY, US listings are actually down 3 percent, eBay UK listings are flat, eBay Germany listings are up 13%, and "other international sites" are up 48%.

In response to a comment, "What did you expect with cheaper fees," Blodget replied, "Given the seller outcry, it wouldn't have shocked me to see some decamp en masse to Amazon, et al. Especially because eBay didn't just go to cheaper listings. In most cases, it's making it up on the back end."

It's always been hard for outsiders to understand eBay sellers. They don't just pack up and leave, but they do adjust their selling strategies. One subtlety in understanding the eBay marketplace is that there are always sellers who will come in and fill in gaps - if some sellers leave, others come in and replace them. The question is whether eBay is retaining and attracting quality sellers with quality merchandise. Another point - large sellers who stay are doing everything they can to attract customers and move them to their own website for future sales.

I think it is way too early to pronounce eBay's changes a success. I'll admit that for just about as long as I've covered eBay, I've been a pessimist - and all the while, the company has experienced phenomenal growth. With that in mind (and understanding that I look at things from the seller's point of view), the only bright spot I see on the horizon is the split screen search page eBay's been developing and has been touting at its presentations to analysts.

Finally, the real hue-and-cry from sellers wasn't even about the pricing changes - it was about changes to the feedback system, which has not yet rolled out. For some sellers, it may be a deal-breaker.




Comments (63) | Permalink

Readers Comments

Impact of eBay Changes - Too Early to Call   Impact of eBay Changes - Too Early to Call

by: Steve

Mon Mar 31 14:05:01 2008

I certainly would not invest in a company who pumps up listing counts. Can you say smoke and mirrors?

Moreover, I would not invest in a company whose customers (the sellers) have so much animosity, anger and distrust of the company.

Impact of eBay Changes - Too Early to Call   Impact of eBay Changes - Too Early to Call

by: Greg

Mon Mar 31 14:06:23 2008

It's interesting that Bear Stearns would carry any weight in a market analysis at this time anyway, considering their position as of last week. However, given the statistical evidence they purport to be accurate, how do they acquire that evidence unless eBay pushes it across the desk to them. eBay has the best top spin artists I've seen in e-commerce. What makes any information disseminated to these analysts accurate?

There's no real way to know until 10Q's hit the table.

Impact of eBay Changes - Too Early to Call   Impact of eBay Changes - Too Early to Call

by: Rod

Mon Mar 31 14:16:45 2008

A quote from the blog entry - ''whether eBay is retaining and attracting quality sellers with quality merchandise.'' which is exactly why I think my idea may help.
Why not email me with any concerns you have, maybe I haven't thought of something or you have an idea to make badsellers.org better?

Thanks,
Rod

Impact of eBay Changes - Too Early to Call   Impact of eBay Changes - Too Early to Call

by: Patricia

Mon Mar 31 14:28:35 2008

I find I can't read what wall street says anymore.  They have no real knowledge of the inner workings of ebay.  If they would only ask a random group of longtime sellers - take your pick - say any 10 sellers who sell consistantly on ebay.  They'll get the REAL truth - the truth their readers DESERVE - and it ain't pretty!  I frequent the boards - sometimes post but mostly read.  I suggest they take a spin around the Stores Board, the Feedback Board, the Search Board and Seller Central for real eye openers from the sellers in the trenches!  Only then will they even begin to get the real picture of what is going on on that site.  Its nothing like the wine and roses and accolades they give that company.  Actually, going back to 2004 a series a huge mistakes have been made - more mistakes than good management decisions that's for sure. This last one of handing out coupons to buyers who could actually be bad buyers and their one cent sale were the acts of a company desperately trying to get their listings up in order to look good for the quarter.  They fool no one...except maybe the big wigs on wall street!

Every year US core listings and revenue goes down a bit more and every year ebay balances this by raising fees.  This year was a doozy!  Not only have they raised final value fees by 66 percent - they've tried to pass it off on sellers as a fee DECREASE!  I'm not a mental giant but I sure didn't need a calculator to see what that increase would do to my meager profits.  Frankly, after the Jan. 29 announcement, I picture Donahoe running around being chased by men in white coats with butterfly nets!  This has caused countless good, honest sellers to leave ebay or to cut down their listings drastically and seek other venues.  Does this get rid of the bad sellers - as bragged by Donahoe?  Heck no!  They'll stick around as long as there's a dollar to be made - they could care less about dinged stars or negatives as long as they make their money - its the good sellers who have worked so hard to keep good reputations that have been made to feel unwelcome on that site!  Bear Stearns take a look at the INCREASE in sellers on other sites - where do you think they're all coming from???

So, I suggest Bear Stearns and the rest of the wall street hoity-toity get off their duffs and read the Ebay discussion boards mentioned and do a little REAL research by contacting some sellers completely at random and asking them what's wrong and what's right with ebay and where they see ebay heading.  I hope they're sitting down when they do this!

BOYCOTT Ebay May 1.

Please attend the 99 cent rummage sale at onlineauctions.com starting May 1.  You'll find a LOT of your favorite sellers there.  Good sellers deserve a decent venue!

Impact of eBay Changes - Too Early to Call   Impact of eBay Changes - Too Early to Call

by: greta

Mon Mar 31 14:56:52 2008

eBay has lost their integrity a long time ago, in life and business they are basic requirements.  we can see the wizard behind the curtain, hopefully the stockholders will too.    

in the meantime……

~ JOIN THE eBay BOYCOTT ~  BE INFORMED ~

Find your State or International Location folder and join us.  Former employees are welcome too!

A place to organize.
A place to unite.
A place to focus.
United we stand, Divided we fall.

http://forums.delphiforums.com/boycottebay

http://www.accknowl.com/

Boycott Victoriously …..  While Making Noise!
Evacuate by May 1, 2008!

Impact of eBay Changes - Too Early to Call   Impact of eBay Changes - Too Early to Call

This user has validated their user name. by: Ming the Merciless

Mon Mar 31 14:57:59 2008

Instead of making sweeping pronouncements about subjects they clearly know very little about, I suggest American Express and Bear Stearns analysts start learning mandarin Chinese.

Impact of eBay Changes - Too Early to Call   Impact of eBay Changes - Too Early to Call

by: Harry

Mon Mar 31 15:11:28 2008

The problem with American business is it only sees quarter to quarter. Never the bigger picture. Plus, would YOU trust anything Bear Stearns has to say?

It will take a year to see if these changes have had any impact on sales and growth.

Impact of eBay Changes - Too Early to Call   Impact of eBay Changes - Too Early to Call

by: LegendsOfBatman

Mon Mar 31 15:19:50 2008

What I see is a 3% loss in listings.
What I don't see, is revenue. I want to know how much ebay gained or lost. (Preferably lost).
Tim
http://forums.delphiforums.com/boycottebay/start
h
ttp://myspace.com/boycottebay


Impact of eBay Changes - Too Early to Call   Impact of eBay Changes - Too Early to Call

by: Gail C

Mon Mar 31 16:57:08 2008

Ina,

I directed Mr. Blodget to your blog. I hope you don't mind. Maybe I should have asked first?  Oh, well....

Impact of eBay Changes - Too Early to Call   Impact of eBay Changes - Too Early to Call

by: Peggy

Mon Mar 31 18:02:11 2008

For 30 yrs, I made my living analyzing the financial health of corportions, yet I still made the mistake of thinking the Market and its analysts were doing the same thing !...they're not.
Harry (above) is right...business is only judged qtr to qtr or by Sales and profits. Neither of these measurements determine the health of the company.  Only Retained Earnings and/or Stockholders Equity tell us if the company can survive a ''market correction'', downturn or recession.  

I was shocked to find out my investment adviser never considered Quick Ratio in offering his advice.  I've been avoiding market advice and advisors ever since.  I sold ebay years ago...most of their value is in intangibles, yech !!                            

Impact of eBay Changes - Too Early to Call   Impact of eBay Changes - Too Early to Call

by: Henrietta

Mon Mar 31 18:42:55 2008

Like Greg, I doubt the credibility of an analyst from a company which saw itself sold on the block for $2 a share. I am also dubious about unverifiable figures from eBay, how are they any more accurate than the Enron figures? I do not have a problem with eBay management pushing levers, that is what they are paid for but as a shareholder I want some kind of independent verification. More importantly, what are sell through rates, how do listing to sale ratios compare?

The root of eBay's troubles (other than non-existent customer service) is that upper level management has no retail experience. They are all B School theorists who would sink without that nice corporate paycheck. The sheer size of eBay facilitates the ''I'm the decider'' style of management, dare to disagree, no matter how reasoned the argument, and you are ''the enemy''.

The entire PR department should be pink slipped and replaced. Their confrontational, condescending & disparaging attitude toward their customers has created incalculable and probably irreversible ill will. Even the most level headed seller is insulted by being called 'noise'. Their language and behavior appear to be calculated to escalate hostility by causing maximum offense. For example, how is “just a venue” while referring to its customer base as “flea marketers” mandated to “demote” independent sellers?                                

Ina is right a lot of small Sellers and a quite a few large ones have already packed up and left. Many who remain are working their exit strategies. Sellers come and go, both good ones and bad ones; although the profitable to eBay bad ones seem to leave slowly. The question here is “Do you want to buy from Sellers who remain?”

The real issue is not fee “adjustments” but loss of Seller confidence caused by:-

(1) One way feedback policy which includes poorly framed DSR’s.

(2) Bait & Switch, Sellers are paying for LISTING which they get but visibility (although implied) is actively prevented by flawed search and manipulated exposure policy.

(3) Refusal to ID verify buyers, increasing Seller vulnerability by encouraging the return of NARU buyers, repeat TOS violations, extortion and fraud.

(4) Paypals change of the User Agreement from “if you engage in any of the Restricted Activities” to “If we have reason to believe that you have engaged in any Restricted Activities” allowing accounts to be frozen without culpability or recourse.

(5) User (buyers & sellers) frustration because there is no viable way to communicate; unless you are a Power Seller any inquiry will get multiple contradictory bot-generated cut and paste non-pertinent responses.

(6) eBay promotes buyer dissatisfaction by failing to monitor, train or qualify new Sellers.

I have spent eight years of my life building a business. I have multiple repeat customers based on mutual satisfaction, good product, fair prices and superb service. I have been working MY exit strategy since the SIS debacle in 06. I will not continue to trade in a hostile environment that leaves me vulnerable and threatens my reputation.

May 1st will see if I take my money elsewhere.

Impact of eBay Changes - Too Early to Call   Impact of eBay Changes - Too Early to Call

by: Henrietta

Mon Mar 31 18:46:34 2008

Where is Kal today?

Did he get pink slipped in San Jose?

Impact of eBay Changes - Too Early to Call   Impact of eBay Changes - Too Early to Call

by: Peggy

Mon Mar 31 18:59:36 2008

Gee, Henrietta...

I thought you were describing our government,no...it's ebay, no...it's both !

Boy, are you ever right on ! You sound too smart to stay...

Peggy

Impact of eBay Changes - Too Early to Call   Impact of eBay Changes - Too Early to Call

by: Laura

Mon Mar 31 19:09:47 2008

@Henrietta
I may never write my opinion on this blog again! All I will need to do is quote this entry.

Impact of eBay Changes - Too Early to Call   Impact of eBay Changes - Too Early to Call

by: Gravy

Mon Mar 31 19:55:53 2008

Who on earth would give Bear Stearn's any credibility? They obviously couldn't analyze their own numbers.

I guess it's who you know. I don't see it any other way.

My belief is that sellers will always fill vacuums or vacancies on Ebay. I don't believe good caliber sellers will be patient too much longer. There are many choices and animosity towards Ebay to keep up with this madness.

Ebay is HIGH maintenance and a profit drain compared with the other venues that I sell on. Still profitable (barely) and that is why I stay, which leads me to the song from Linkin Park.

[Chorus]

Everything you say to me
Takes me one step closer to the edge
And I'm about to break
I need a little room to breathe
Cause I'm one step closer to the edge
And I'm about to break

Shut up when I'm talking to you
Shut up, shut up, shut up
Shut up when I'm talking to you
Shut up, shut up, shut up, shut up

I'm about to BREAK


Impact of eBay Changes - Too Early to Call   Impact of eBay Changes - Too Early to Call

by: Kal

Mon Mar 31 20:00:14 2008

Kal is right here Henrietta, and I don't disagree with what you say. I'm still selling though, amongst all the unrest. Perhaps it's time to stop complaining and get back to business - either on or off eBay. You choice.

PS - I assure you I don't work for eBay, but could care little if you believe me or not.

Impact of eBay Changes - Too Early to Call   Impact of eBay Changes - Too Early to Call

by: ILEFTEBAYYOUCANTOO

Tue Apr 1 00:48:15 2008

PUH-lease! Growth? Yeah eBay is "pushing a few levers" more than ever since the new changes. The DOZENS of bogus sellers (created by eBay themselves) who have listed 90,000 of the same clock?? SELLERS LINKED POSITIVELY TO EBAY COMPANIES SUCH AS HALF.COM?!!? The feds need to stop looking at "steroid scandals" and look at A VERY CORRUPT AND SLEAZY EBAY. I have left eBay after selling there for 10 years. Craigslist can work for you too. Once you find the groove you will appreciare CASH IN HAND and NO PAYPAL BS! Donahoe is a useless wad who will have his onw Wikipedia entry; "The guy who ruined eBay".

Impact of eBay Changes - Too Early to Call   Impact of eBay Changes - Too Early to Call

by: vstar heaven

Tue Apr 1 01:18:13 2008

Funny...ebay keep claiming that the NOISE has had no effect on their listings??? What a joke!! How many more thousands of padded listings like the SDC listings are out there unfound yet???
  Looking back thru the years, when have you ever seen so many promotions offered to sellers and disgruntled buyers...they throw a new one out there it seems every week...Now 1 cent listings...WOW! They wont be hurt from the 1cent listings..they will most likely make more in Final Value Fees, because most items WILL SELL THE !ST TIME!! thats a bunch of items sold without relisting..ebay knows what they are doing with that...
 What about the power sellers?? There wont be any left after the DSRs go down to 4.5 or below...out of the top 100 sellers on ebay acording to topsellerlistlive, only a handful will still be eligible for power seller staus and most will never see the 5% or the 15% discount that ebay is throwing around to the media...Its just a pipe dream for the average seller who wants to move up...

And now ebays saying so much about cracking down on fake handbags, shoes, designer jeans, etc...They just say that stuff to make you think they are doing something about it, but in all reality, they dont do a thing..go on ebay and search for a pair of 7 for all mankind, rock republic,etc jeans..there are thousands for auction and maybe 1% are the real mccoy!!!its been that way for many years..they arentcracing down...more fake and unsuspecting buyers means more proffits for ebay...

check out this link on utube:
http://www.youtube.com/watch?v=wCrzFkbYnWw

or this one about their 300,000 plus padded listings:
http://www.youtube.com/watch?v=nf14CEHv__c

I started a thread about this on ebay and had tons of posts and attention on it..Ebay pulled it without warning in 4 days without so much as any explaination..plus I was banned from the seller boards for making the thread...they dont want the public to know what they have been doing for years..let alone the poor stockholders...come may 1st, their world will start to change as unsuspecting sellers start figuring out what the new changes are and will be doing to their business...

support the nonstop ebay boycott that started on Feb 18th and is still going strong!! The new start date on May 1st will be the start of the end for them!! This soon to be EX-POWER SELLER hasnt sold a thing in over 6 weeks and will continue for as long as it takes!!Remember Ebay suits..the sellers on ebay are not only sellers but are a vast majority of the BUYERS on ebay, too....You lose a seller, you lose a buyer..plain and simple!

BOYCOTT EBAY TO INFINITY & BEYOND!!
STRENGTH IN UNITY!!
WE WILL DEFEAT THE CORPORATE GREEDBAY GOLIATH!!!!!!!

Impact of eBay Changes - Too Early to Call   Impact of eBay Changes - Too Early to Call

by: VSTARHEAVEN

Tue Apr 1 01:29:52 2008

WELL, IVE FIANLLY GIVEN IN TO YOUR SPECIALS AND FREE UPGRADES AND POWER SELLER DISCOUNTS THAT ARE SO, SO GOOD FOR ME AS A SELLER!! THANK YOU SO MUCH FOR HELPING ME MAKE SOOOOOOOOO MUCH $$$$$$$$$$$....YEA RIGHT!! IM JOKING!

NOT GONNA HAPPEN AS LONG AS IM BREATHING!! APRIL FOOLS!!!! THIS VERY SOON TO BE EX-POWER SELLER HAS HAD ENOUGH!!! I JUST PRAY THAT SOMEONE THAT SELLS ON EBAY STOPS IN HERE OUT OF CURIOSITY AND READS SOME OF THIS INFO...PLEASE READ CLOSELY...THIS IS FOR YOUOWN LIVELYHOOD...GREEDBAYS DAYS OF TORMENT WILL BE ENDING SOON...

I SEE THE HEADLINES NOW........

THE DEATH OF EBAY???

CAN ANYONE SPELL...          E N R O N

Impact of eBay Changes - Too Early to Call   Impact of eBay Changes - Too Early to Call

This user has validated their user name. by: Ming the Merciless

Tue Apr 1 02:37:18 2008

Mega kudos to Henrietta for her cogent explication of issues that need to be aired -- early and often!

What I find curious is Kal and his buddies' preoccupatiom with getting those who have legitimate complaints silenced in these forms by their condescending instructions to get back to work.

I suspect that many of us here with the exception of the San Jose flunkies are capable of profitable multitasking.

So, Kal, why don't YOU shut the frack up and leave us whining babies to make all the noise we want to in our playpens. After all, it's NO skin off your back.

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