PayPal Report Shows Troubling Signs for eBay

by: Lightning

Turn rate is NOT defined by how many you LIST and how many you SELL.  It's the Cost of Goods on the sales you take in for the year divided by your average inventory on hand for the year.  Apples and oranges being compared here.  

If you do 2 million dollars in sales (with a Cost of Goods of 1 million dollars) and carry an average of a million dollars in inventory throughout the year, your turn rate is 100%.  You effectively went through your entire inventory, some leaving each month and getting replaced each month, still maintaining roughly 1 million dollars on hand.

Using Toolguy's example, you could have a million dollars worth of inventory on eBay, list $1000 worth (CoG) each month, sell $500 dollars worth (again, cost of goods value, not sales) each month, and your annual Turn Rate would be 6/10ths of 1% (abysmal), NOT 50%.  You had a million dollars worth of stuff for sale, but only sold $6000 worth, a pittance.  

BUT......If all you HAD was $1000 worth of inventory (CoG) and you listed it ALL in a month and sold half that month, presuming you replaced the inventory with the sales, your Turn is 600%!  That's because you are moving $6,000 worth of stuff annually while only carrying an average of $1000 worth of goods at any time.

Statistics are easily misinterpreted and misrepresented.  You have to scrutinize the methods used to determine results.  Often just wrong.

Ebay Shill Buster had it right in his earlier post.  $1000 per month sold with $60,000 on eBay is 1.6% per month, or 19% per year.  A struggle.  Bet there were some better years ahead of that.

by: glasspackaging

I have more payments via PayPal on my wholesale sites than ever before ... still less than 5% of all payments , but growing every month.

eBay sales are few and far between .... despite my lowering prices on eBay below my Amazon prices (experimenting) ...

by: Troy Stiffler

Everyone was spending money on eBay until ten years ago. Everyone was spending money everywhere until ten years ago. Everyone had access to consumer credit, and lived off that.

Part of eBay's downfall, is that their thrift sales got old. You used to be able to buy a scrap-metal electric motor, take a picture, and say "uh, I think it works, as-is", and someone would buy it for $25 (let's say it retailed for $300). To me, that market is dead. Nobody wants to buy a used Monopoly board, and find out that it is missing pieces. Or a used Shop-Vac and find out it is missing attachments. People want good, usable products, and eBay became sort of a joke (Family Guy actually made a joke about the Monopoly board maybe 5-10 years ago).

The fault isn't all eBay. But eBay's search algorithm, dashboard, and similar programs have been detrimental to their usefulness. Higher fees, mediating sales, etc. This all hurt them. Amazon took over the new-retail market, with a few liquidators working their way in as 3rd party vendors. Ebay's failing platform has been propped up by Wall Street over the past 5-7 years. And it is finally catching up to them.

It's still a valuable brand. I feel bad for the endless livelihoods (all of those small businesses and home-based businesses) that will fail based on this. I keep a 1000-name personal directory of competitors. And I'm seeing lots of small people disappear all the time, without any new sellers being added. Lots of those little businesses with 1000-listing stashes in their garage get tired of seeing 1-5 sales a month. Till they pay fees, they're in the negative. So they just give up.

by: Chicago48

It's called HUBRIS.  I know better than you know.  But nobody but Ebay and Ayden(?) know what those contract negotiations were about.  And maybe Ayden required that Ebay not use PP for a while.  We don't know.

by: iheartjacksparrow

@Jazzy Jewelry - Have you tried selling on Etsy? And I always recommend eCrater. You can also do an online search for marketplaces to sell jewelry. There is life after eBay.

by: Chicago48

@jacksparrow.  Ecrater is dead for me at least.  I finally deleted my account.  Ditto Bonanza.  When you search for ANYTHING, Ecrater and Bonanza never show up in the searches....maybe on page 10+....but the searches reveal the top 3:  Walmart, AMZ and EB.

by: angryllama

10:43 am EDT   Ebay stock is off yet another 1.58 percent below the Friday Close. Now fully 10 percent down from Last Thursday's close.

The Downward movement looks eerily repetative as the ANGLE of the decline vs time is staying awfully constant.... down Down DOWN.

by: CanBrit

Chicago, Hubris is my word....lol. Lightening, thank you for the lesson on Statistics. That was the one class in College I had the most problem with.

Now, what I'm seeing really explains a lot about eBay and it's mentality. They are always swatting at flies. Looking at little things and not the big picture. I bet they didn't see it coming that PayPal was going to drop a bomb. They should have been extremely aware of that and beat them to releasing even if the numbers were bad. The release has turned into a nuclear bomb.

Just like their little drones who run around every forum jumping on everyone who says something negative about eBay. Why in God's name would you think that this would have any impact when a company is so poorly managed, they are the ones who've damaged their own reputation.

I'm all agog to see what the Three Stooges do next.

by: CanBrit

@ebayout
When I first started posting on the conversations on Yahoo Finance, there were very few at all. Now there is a complete diatribe going on daily. I have listed quite a few times, the SEC filings that eBay has done and is shown on their website. Maybe someone finally looked?

by: iheartjacksparrow

@Chicago48 - I'm sorry eCrater didn't work out for you. If I remember correctly, you sell clothing items. I sell collectibles and my sales are so much more than my last year on eBay. I know Moonwishes sells sewing patterns and does well on eCrater, and Rexford also is happy there. My sales didn't start until I had over 100 items listed, so maybe you didn't have enough items for the buyers to find your store.

by: ThisGuy

Wow.  Stock price at a new low, $28.10.

Has anyone out there sold on rubylane?  Any reviews, thoughts?

by: ebayout

ebay's assets are a hologram....it's cash position is virtually eclipsed by it's debt, it has NO inventory, it's losing market share and sellers who are not being replaced, and the companies it owns are merely pixel renters like itself.
It's only value is that it may be bought by outsiders with common sense who can turn it around. But then...how long would that take?
So...why is anyone except a shorter buying before the 30th?

by: CanBrit

@ThisGuy
RubyLane has a great customer base. Had a great time selling on there, but they aren't as growth minded as other platforms. It really is run like the small business it started from. Lots of favoritism for long term sellers. You can pay more for better visibility, like on eBay except it actually does give you more visibility.

The make you do a test before you can join, at least when I did that's how it was. The tests is not that easy. You have to make sure you read all of the policies and documents. Your listing has to be absolutely perfect in every way. Once you're in, it's a good idea to keep to yourself and just sell. Every item must be older than 20 years and if you put a date of manufacturing down it had better be right. They do have very strict rules for the listings.

Also, if you undercut your pricing too much, the other sellers will make your life on there hell.

by: Chicago48

@thisguy:  I'm curious about Ruby Lane too, but I believe you have to open and pay for a store too.
I not only sell clothing, I sell hard goods, media & recordings.

by: foothill

eBayout. ''Loosing market share'' Yes......

Examples from my buyers feedback info. No longer a registered user: Feedback. 16654- 34795-  10081-  28457 - 54637- 5245- 25807- 6282-  21988

As seller. I have +6000 100% Feedback. 1000 listings. Last sale Oct. 15....

by: xcelr

Jazzy Jewelry

ebay died for us small sellers while you were away. Unless you can absorb the returns and shipping both ways and let the buyer keep the item all while ebay raises fees and hides your listing unless you pay extra for ads and begs the buyer to return every item you sell.
I too used to transfer $500 to my savings when Paypal balance got to $600, sometimes twice a month.  
Etsy is trying to be like ebay, Bonanza already dead in the water from following the ebay road.
I get a few sales from Ecrater and It's getting better, never had a return or complaint and get some repeat buyers. They still allow buyer/seller  communication. Still it's months between those transfers from Paypal to savings although I've lowered them to $250 when it gets up to $300.
ebay was a good ride while it lasted.
I'm just a little fish in a big pond anyway.

by: ThisGuy

@CanBrit

Thanks for sharing those details.  It seems like they want to cater to a different type of buyer and seller, and I can appreciate that.

I don't understand the competition comment.  What can a competing seller do to you if I price my items cheaper than yours?

by: toolguy

@Lightning

I've invested $150,000 in inventory, to date that has yielded $1.5 million

I haven't invested in new inventory in years!

Back in the "old days" I would list 50-100 items a week at auction with a starting price of $9.99 + shipping

Most weeks I would sell 100% of my listings, on bad weeks 90%

When eBay pushed for fixed price listings I list about 200 items a month, I sell 100 of them.

I have nothing invested in my inventory at this time in my life.

It's been paid for 10x over. . .

Life is Good, I have no stress about pays my bills. . .I live in a house that's paid for. . .

by: CanBrit

@ThisGuy

With every listing, there is a report button that other sellers can use to notify management there's something wrong with the listing. They stay very on top of those notifications, believe me. Too many of them and you're out. They don't give notice, there is no warning, you and your listings are deleted and gone in a second. Any financials, picture, etc, If you're lucky you might get them to tell you if you had something to ship.

by: toolguy

I gave eCrater a try earlier this year.

I sold 1 item in 4 months

I can't pay the bills selling 1 item for $20

At least with eBay I sell a $1000 a week on average. . . .(cost of goods is almost zero)