Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Mon Aug 1 2022 21:12:00

Why Does eBay's Strategy Result in Fewer Buyers?

By: Ina Steiner

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Is eBay's focus on high value buyers paying off? In a report today about Wednesday's 2nd-quarter earnings release, Wall Street analyst John Blackledge of Cowen said he expects another decline in the number of eBay's active buyers as it "continues to focus on high value buyers." 

But it begs the question, why would focusing on high value buyers turn other buyers away? Since it isn't the seller, eBay isn't facing any capacity issues, and it has millions of sellers who could continue to sell to the traditional eBay ("low value"?) customer.

Last year, eBay CEO Jamie Iannone told Wall Street analyst he was rejecting the approach his predecessor took in 2019, "which was really just about the number of active buyers, even low value buyers or one-and-done buyers. I've got the whole organization pivoted to focusing on those high value buyers; buyers that are buying over $800, buying six times a year, or buyers who sell."

EcommerceBytes readers reacted to news of Iannone's approach in this blog post from a year ago. One seller wrote, "Is eBay telling me that they do not want my 7K I sent them last year selling to people who on average spend $20-$30 per transaction. They are my bread and butter not the occasional $200-$800 sale."

Meanwhile Etsy CEO Josh Silverman and Chief Financial Officer Rachel Glaser have a different approach to buyers and are focused on retaining existing buyers, getting new buyers, and reactivating buyers. In its earnings report last week, Etsy shared slides showing the total number of active buyers along with repeat buyers and habitual buyers - a more granular approach (and less offensive to buyers).

Etsy reported active buyers had decreased both year-over-year and sequentially, but noted the number had grown 106% in Q2 compared to the second quarter of 2019.

We'll be looking out for eBay's CEO and Chief Financial Officer's discussion of buyers and what they're doing to retain and attract them on Wednesday's earnings' call.

Sellers, let us know how it's impacting you.

Comments (19) | Leave Comment | Permalink
Readers Comments

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by: pace306 This user has validated their user name.

Mon Aug 1 22:27:43 2022

Because eBay has ALOT of cash, an almost endless supply of sellers, and ALOT of people who think that the emperor has new clothes - eBay can afford to alienate ANYONE it does see as key to the future it believes it deserves. Those people are sellers it doesnt like (well ok it hates them)(but it cant say the quiet part outloud atm).These sellers are smaller sellers - the ones they believe use up eBays time, effort and resources.

eBays CS is crappy because they want it to be that way. Its full of script reading overseas kiddies who cant think for themselves, who dont really care and even if they do - are told NOT to.

Its the smaller sellers who "use up" all those CS agents, who get involved with VERO issues, who wake up the Dummy from his slumber and who cause eBays stock to drop and for Walkers to have to take wings off the menu (inflation you know).

Large sellers, sellers who sell high end goods, makers themselves - they and ONLY they deserve to be treated properly and with respect.

Im EXACTLY the guy eBay wants to get away from. They dont care how much I sell, they only care that I am the kind of seller who will go down with the ship on each and every issue and pursue eBay and not give up. I use up their precious resources when they could be playing golf.

Its much easier to weed people like me out and concentrate on the big guys selling $1000 items not $100 items.

eBay wants and always has wanted (wanting to get away from being a flea market)(which Mercari is happily doing) to play with the big boys (Amazon sells high ticket items), but since eBays reputation is (to quote the guys from The Big Short) dog excrement wrapped in cat excrement - they cant. So - they next best thing is just to IGNORE the smaller sellers, bleed them dry and cater to the high end guys. The small guys eventually leave, the big guys stay (they get negatives erased and they can control their own returns issues) so its win win.

eBay isnt leaving anything on the table, its just a change of who to market to. Better to sell to a Kardashian then "a Smith".

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by: lessthanthreerecords This user has validated their user name.

Mon Aug 1 23:23:10 2022

I have never had any "low value" buyers. I've had buyers who buy less expensive items, but never a buyer who I considered to be "low value." However, with this purge of buyers that eBay wrongly sees as expendable, I have noticed nearly a 60% drop in sales this past month. And, to add context to that number, that's not a 60% decline from a banner month. Rather, the prior month was very slow, and I was hopeful that would be the bottom. That teaches me to hope, I guess!

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by: CT Bay This user has validated their user name.

Tue Aug 2 07:17:48 2022

They cannot even have the site function properly for more than three days at a time. I am not sure why they think the can cater to some buyers more than others, thats laughable. They are not catering to ANY buyers when the site isn’t working properly, which is almost always.
    Does Amazon have constant problems? No. Does Amazon ever have any problems that last more than an hour? No. So it IS possible to have an e-commerce platform not plagued by constant problems.
    How about we make the platform function correctly before we start worrying about what kind of buyers we want. The cart is sooooooo far in front of the horse.  

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by: annon123 This user has validated their user name.

Tue Aug 2 07:46:26 2022

I am not sure they care about small time buyers either. For reasons best only known to them for over two months they turned off my daily emails of new saved search items. I contacted them. Nothing. I turned off and then turned back on email notifications. That didn't work. Going to the site to look at saved searches is a pain. So I didn't. I figured the items I was looking at were a want and not a need so didn't bother to spend all the extra time this involves and scrolling past saved searches I had not turned emails on for. I also figured what I was looking at wasn't unique anyway so whatever I missed now, more would show up later. Dumb move on their part. What they don't seem to realize is that if you have enough chump change (buyers like me or sellers they aren't focusing on) it adds up to real money.

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by: seb This user has validated their user name.

Tue Aug 2 09:02:39 2022

Ebay ended the remainder of my listings 2 years ago when I would not give them my full social security number to continue selling there. Then they changed to last 4 digits of ss#, but that was too late for me after they had already destroyed my ebay store business. I no longer sell there and I have only made 2 small purchases this calendar year. I will not buy from ebay anymore if I can find item somewhere else. Ebay drove me away and I have had an ebay account since 1999.

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by: Smallseller This user has validated their user name.

Tue Aug 2 09:50:12 2022

Here is what ebay is not realizing. A certain percentage of their sellers are also buyers. Some sellers are so upset that when they leave ebay, they never buy anything on there again.

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by: Alfacar This user has validated their user name.

Tue Aug 2 14:59:06 2022

1. High value items are more likely to be returned or “stolen/swapped”.
2. Maybe Ebay has workforce shortage and have no money to spend on customer service so they dicourage sales of low value items?

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by: ShortSeller This user has validated their user name.

Tue Aug 2 15:25:56 2022

They hate low value items because they can't get affiliates, influencers, etc to flog the crap.  

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by: comments This user has validated their user name.

Tue Aug 2 21:52:10 2022

The problem is that ebay staff is that ebay staff is profoundly unqualified. They need a win so desperately that they are reacting to the past and not planning for the future trends. Trading cards were popular in the pandemic so ebay went all in and planned their whole future around that as a success.

High value items COULD be a successful area on ebay, but the current model actually makes quality high end items impossible to sell. The fees have gone skyrocketing since DW was ousted. The painful new raise to a min 2% add spend knee-capped the sellers of quality items in favor of dumpster dive or high mark up sellers.

Quiz time!

What is the better business model?

Certified Chizzard card price guide value $50.

A) Pay $25 for it and sell it for an asking price of $100= shipping with a 10% promoted listing fee to get premium placement. Everyone sees it and passes on it.

B) Ask $50+ Shipping for it and pay 2% promoted listing fee. It will sell eventually.

C)  Sell it for $50, put it on markdown sale, and offer free shipping. Offer it for 1% promoted listing fee. Best chance to sell so seller can reinvest in a new piece of inventory.

Well C is the common sense answer but for some reason ebay has clearly chosen A. Gives the most promotion to A, and is just wasting the impression.

A is only a good solution to cost per click but for all other solutions it just erodes the community. That is why there are fewer buyers. Buyers just see the over priced items and assume the marketplace is over priced. As the buyers find better solutions elsewhere they tend to check their first.

Also managed payments 2 day minimum payout is making sellers hold items until they get the payout. The dramatically decreased buyer satisfaction, particularly on high value items.

But hey the guy from walmart knows better right?

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by: terry55 This user has validated their user name.

Wed Aug 3 09:27:46 2022

I'm not sure why ebay can't cater to both, it all adds up at the end

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This user has validated their user name. by: cfrphoto

Thu Aug 4 00:41:31 2022

Sales on eBay dropped in sync with the stock market. Collectible categories like Stamps attract late-career or recently retired buyers looking to re-enter a hobby like stamp collecting. Some potential buyers may postpone buying expensive stamps until stock prices recover. Others have moved to competitive venues like HipStamp.

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by: Chicago48 This user has validated their user name.

Thu Aug 4 03:06:28 2022

All my low value clothing & other items go to Ebay.  EB is the site of last resort.  Meaning, when I can't sell it on other platforms and after months of no-selling, I list it on Ebay.  I treat it like a flea market, when in years past EB was the first place I would list my items.  As a buyer, I'm only interested in supplies like ink cartridges and I go to the Merc site first before going to EB.  In other words, EB for me a buyer & Seller is the place of last resort.

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by: Chicago48 This user has validated their user name.

Thu Aug 4 03:09:40 2022

"They hate low value items because they can't get affiliates, influencers, etc to flog the crap. "
^^ What's really weird is this.  For a long time I would get Emails from EB "recommending" that I drop my prices.  And I thought isn't that cutting into EB revenue.  I mean this.  If I'm selling something for $20, EB thinks it's "too high" and recommends that I drop the price by $2, then that means EB gets 10% of the 18 instead of the 20.  That was backwards strategy IMO.

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by: ssusannss This user has validated their user name.

Thu Aug 4 11:04:08 2022

When eBay forced me to return money to a buyer for hair curlers that the buyer said “didn’t quite get hot enough” after having them for over three weeks, I was done. $20 shipping as well. I quit selling and I quit BUYING. I’m sure that’s the case for many. I’ll never buy on their platform again.  

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by: NYSteve This user has validated their user name.

Thu Aug 4 11:50:38 2022

Ebay started out as an online alternative to flea markets and garage sales (love them!), then when they went corporate, they realized Wall Street thumbs their noses at those venues. so...next steps:

1. thumb their own noses at low to mid price sellers
2. get hit in the face by reality
3. start begging low to mid price sellers to come back (if they have the cajones to admit their erred ways)...which would most likely require a less arrogant CEO
who would offer more than the corporate  'here's a chicken bone...it's almost like the filet minon  our 'important' people are dining on...see we DO 'care' about you...keep running on the treadmill...you'll get there someday'

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by: BargainzBabylon This user has validated their user name.

Thu Aug 4 13:18:33 2022

I'm not sure where it says anywhere that eBay is "purging" itself of so-called 'low value' buyers. They're emphasizing higher value transactions. I don't agree with their approach and feel it's short-sighted, but no one is being 'purged.'  

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by: NYSteve This user has validated their user name.

Thu Aug 4 14:11:48 2022

Wall Street analyst John Blackledge of Cowen said he expects another decline in the number of eBay's active buyers  

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by: DogPatch This user has validated their user name.

Thu Aug 4 15:37:12 2022

Wrigley Chewing Gum
Low value items

Wrigley Building, Chicago
Wrigley Stadium, Chicago

Coca-Cola
Pepsi Cola
Low value items

Intel
Low value items

Embrace any and all commerce.




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by: ebayout This user has validated their user name.

Sat Aug 6 11:16:31 2022

eBay expounds the same amount of energy...none...to make 12.95% on a $2 sale as it does on a $200 sale.
If eBay is deliberately turning away business, it's not a business.  



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