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.