Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Sat July 20 2013 16:42:17

eBay CEO John Donahoe Skirts Issue of Fee Impact

By: Ina Steiner

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John Donahoe defended eBay's fee increases, according to a  report on financial site Benzinga.com. But he didn't actually acknowledge that some sellers are experiencing a fee increase. Instead, he obfuscated the issue when being interviewed by CNBC about eBay's second quarter earnings.

CNBC told Donahoe it had heard from a couple of business owners who "stopped doing business on the platform because of increase in seller fees." When asked if he was hearing that too, he said no.

It's a stretch to think eBay's CEO has not heard of any sellers who stopped selling on eBay because of fees - is CNBC better informed than he is about sellers? Are sellers' complaints not making it to top management? Is eBay actually unable to track sellers leaving the site?

Here's exactly how he responded to the question posed by CNBC:

"No, not at all. What in fact we've done is we dramatically simplified seller fees, and if you look at our take rates, if anything, they're coming slightly down. So there's always transition when we change pricing, 'cause we have literally 25 million active sellers, but what we've done is simplify their fees, and sellers only pay when they actually sell something on eBay, and that's one of the things that's distinct and unique."

Why not be transparent about the impact of the fees rather than imply that no seller experienced fee increases?

Insertion fees are lower - in some cases free; the backend fees are indeed simpler, and as a result, some sellers do pay more in commission fees. The bulk of seller fees are now paid when they actually sell something on eBay. (Which, by the way, is NOT distinct and unique.)

Wouldn't that be a more accurate answer, and what's to fear in acknowledging the impact of the changes?

It's interesting to note that eBay is running two promotions to attract higher-value items in what could be a test of a reduced cap on Final Value Fees (commission fees).

The new fees took effect in April and May (depending on if you have a Store subscription), here's your chance to share how the fees impacted YOUR business.




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Perminate Link for eBay CEO John Donahoe Skirts Issue of Fee Impact   eBay CEO John Donahoe Skirts Issue of Fee Impact

This user has validated their user name. by: Ric

Sat Jul 20 17:16:28 2013

Of course John Donahoe is going to deny hearing about sellers leaving over his fee increase.

If Donahoe admitted knowing about how the fee increases have driven sellers from the market place, he would potentially cause analysts to have a more negative outlook about eBay.

A more negative outlook for eBay from Wall Street Analysts would serve to potentially drive down the price of eBay's stock value.

If eBay's stock value declines, so does the personal wealth of the CEO who derives a significant amount of personal income from selling off the gifted shares he receives.

By publicly denying any knowledge of sellers leaving eBay, Donahoe continues to put his personal wealth strategy ahead of the success of the business he directs.

If he really is unaware of how hard his fee increases have hit sellers, he would not be running a Final Value Fee Cap promotion for an entire month.

If he really is unaware of how hard his fee increases have hit sellers, he would also be confirming what every seller on eBay already knows.... This CEO is completely disconnected from the day in day out impact his leadership has had on his customers, i.e. his fee paying sellers.

It is refreshing to see someone in the investment analysis business take Mr Donahoe to the woodshed and expose how isolated eBay's CEO is from reality.

Perminate Link for eBay CEO John Donahoe Skirts Issue of Fee Impact   eBay CEO John Donahoe Skirts Issue of Fee Impact

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

Sat Jul 20 17:49:57 2013

CNBC doesn't know the half of it.

I suspect, however, that even if they did know the whole truth about ebay, they wouldn't report it.

Financial media is as corrupt as the corporations they report on.

So let's just call The Ho's "obfuscations" for they are:

MORE LIES.

Is John Donahoe the reincarnation of Ruth Handler?

Perminate Link for eBay CEO John Donahoe Skirts Issue of Fee Impact   eBay CEO John Donahoe Skirts Issue of Fee Impact

by: Ed This user has validated their user name.

Sat Jul 20 18:13:10 2013

What didn't come up is that all the changes that ebay is forcing on it seller have cost hundreds and possibly thousands of dollars in increased labor cost for the sellers.

I believe the fear of additional punishment on sellers along with reduced search have had enough with ebay.

For a company that has no money invested in inventory sure does not have any regard for its sellers and I think Mr Donahoe is going to pay a big price in the future. Sellers don't like working for free while the CEO walks away with millions of their dollars.

ebay has lost the trust of ebay as a partners by trying to micromanage the sellers business creating lower profits for the sellers.

Perminate Link for eBay CEO John Donahoe Skirts Issue of Fee Impact   eBay CEO John Donahoe Skirts Issue of Fee Impact

This user has validated their user name. by: Philip Cohen
Web Site

Sat Jul 20 18:41:02 2013

eBay user are so ungrateful, not even eBay’s recent “decreases” in fees has made them happy … http://bit.ly/YvxFEg

Regardless, and much to the chagrin of the eBay shills manning the hot air pumps and smoke generators, the smart money on Wall Street does have a negative view of eBay; how else can be explained the fact that eBay’s share price has, since the Ho took the helm, become an ever-smaller fraction of Amazon’s …

Still, it's nice to know we can always be confident that whenever an eBay spokesperson's lips are moving they are, invariably, being disingenuous ... http://bit.ly/12DyCpJ

Donahoe: Light travels faster than sound, so some people appear bright until you hear them speak—Alan Dundes ... http://bit.ly/12Q6xjt

eBay / PayPal / Donahoe: Dead Men Walking ... http://bit.ly/11DZDiB

Perminate Link for eBay CEO John Donahoe Skirts Issue of Fee Impact   eBay CEO John Donahoe Skirts Issue of Fee Impact

This user has validated their user name. by: WOODJUNGLE! ON EBAY

Sat Jul 20 19:00:22 2013

He simply turns my stomach.  Let's just hope karmic payback does exist in the cosmos.  He'll get what's coming to him.

Perminate Link for eBay CEO John Donahoe Skirts Issue of Fee Impact   eBay CEO John Donahoe Skirts Issue of Fee Impact

by: Epins This user has validated their user name.

Sat Jul 20 19:25:38 2013

The investors aren't listening to the Wall Street Analysts or Donahoe.

EBAY stock price
$53.59 1/2/2013
$52.19 -$1.40 7/19/2013

Why do you think Donahoe is spinning up a storm? Too bad the investors are not listening.

AMZN stock price
$257.31 1/2/2013
$305.23 +$47.93 7/19/2013

They're listening to the money.

Perminate Link for eBay CEO John Donahoe Skirts Issue of Fee Impact   eBay CEO John Donahoe Skirts Issue of Fee Impact

by: Bloggo This user has validated their user name.

Sat Jul 20 21:44:18 2013

The Wall Street Journal
''EBay's Growth Disappoints, Shares Slump
Profit Falls 7.5% Even as Revenue Rises''

Perminate Link for eBay CEO John Donahoe Skirts Issue of Fee Impact   eBay CEO John Donahoe Skirts Issue of Fee Impact

This user has validated their user name. by: Map

Sat Jul 20 23:04:01 2013

ha ha ha, Donahoe your nightmares are growing just wait. It will get much worse and you will have no place to hide and lie.

Terra Peaks has a color indicator for all ebay categories and the gray color which means no to low sales is dominate across the Terra Peaks reporting for all of ebay and ebay motors.

ebay is dead.

Also ebay did pulled a reversal on the July 1st picture enforcement.

Ebay motors sellers are exempt from the new picture size. Also seller is not requires to have a picture of the item at all or a actual picture of the item for sale in the listing. No photo or a picture of a car is ok for any car part for sale.

Ebay backed off of enforcing the picture requirements because a huge portion of ebay revenue in listing fees are coming from parts & accessories.

Ebay is desperate for listing fees and have decided to fleece sellers in parts & accessories. Sales are dead but fees are ongoing.

Perminate Link for eBay CEO John Donahoe Skirts Issue of Fee Impact   eBay CEO John Donahoe Skirts Issue of Fee Impact

by: Ebay Seller-Ebay Buyer This user has validated their user name.

Sun Jul 21 02:18:47 2013

Donahue's poor policies are now hurting ebay as their earnings report was terrible. The question isn't whether the fees are simpler, the question is whether the fees have been rising since he took over. And the answer is that fees are much higher in 2013 than they were in 2007, which is why so many sellers have quit. There are free listing  specials  which have kept many sellers just barely afloat to where they still sell on ebay.

But the final value fees are much higher and the horrible decision to take 10% of the shipping cost   has been the knockout punch for many sellers. Especially sellers in categories where they have a maximum shipping, which prevents them from raising the shipping. For example, the vinyl record category has a $4 max shipping charge; but it's been $4 max ship for 5 years now. Each year the post office raises shipping 10 cents or so and now 5 years later the seller sees 50 cents less from the same $4 charge. And then ebay takes another 40 cents of the $4 charge. So sellers of records are seeing 90 cents less per order. 100 records sold a month is $90 less just due to max ship staying at $4 and ebay's greed in taking ship money. With a poor economy hurting sales and the post office destroying international sales with their doubling of international costs, Ebay taking 10% of the shipping has forced many sellers to quit. And buyers who find out that ebay takes 10% of the shipping are also very offended. When I tell buyers I don't get 40 cents of their $4 shipping, but instead ebay takes it; buyers are very turned off by ebay's immoral greed

Perminate Link for eBay CEO John Donahoe Skirts Issue of Fee Impact   eBay CEO John Donahoe Skirts Issue of Fee Impact

by: Patricia This user has validated their user name.

Sun Jul 21 13:36:42 2013

Something far more dangerous is happening to Ebay.  I didn't leave Ebay because of fee increases.  I did far better back in the day when there was a listing fee.  I left Ebay because of lack of traffic.  Since I only list in the Arts category this knocks out the theory that Ebay is directing all its traffic to the big stores.  So, I've gone from paying Ebay a couple hundred in fees each month down to about 2.50 when I list the one item each month that is for the art contest we have going among ourselves.  Compound that by the thousands upon thousands of sellers who gave up and left....that's Ebay's biggest danger!

Perminate Link for eBay CEO John Donahoe Skirts Issue of Fee Impact   eBay CEO John Donahoe Skirts Issue of Fee Impact

This user has validated their user name. by: Tula

Sun Jul 21 14:15:46 2013

Spin baby, spin!

Sellers wouldn't mind paying listing fees if their items would actually be seen by buyers. As it is, we're paying and paying, with no guarantee our items will get in front of buyers, due to eBay search visibility issues. People are in business to make money, not to gamble that they'll potentially make money. That's what we're doing now. Our fees don't guarantee anything, so they're more like bets on a roulette wheel, where we hope the ball lands on our item so we get some search visibility instead of being relegated to a black hole in cyberspace.

Perminate Link for eBay CEO John Donahoe Skirts Issue of Fee Impact   eBay CEO John Donahoe Skirts Issue of Fee Impact

by: Patricia This user has validated their user name.

Sun Jul 21 14:27:17 2013

I think once and for all Ebay management AND John Donahue should understand Ebay is NOT Amazon...never was and never will be!  They need someone in there that will address the needs of the business it is and cut the crap!  All this management is doing is losing customers and losing good sellers ...and we are now in the fifth year of his three year disruptive innovation and the place is a horrible mess!

Perminate Link for eBay CEO John Donahoe Skirts Issue of Fee Impact   eBay CEO John Donahoe Skirts Issue of Fee Impact

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

Sun Jul 21 15:00:34 2013

Hmmm...

I'd bet anyone a dollar that those responsible for determining the shipping caps are long gone now and their replacements don't even know there are shipping caps.

This would be par for the course for ebay. It would be in ebay's best interest to raise the caps since their greed steals 10%.

Before The Ho, there were 80 million sellers according to Negged Meg.

So The Ho has managed to exterminate 55 MILLION sellers.

No wonder they have to run ads on TV get new victims, ah, sellers.

Perminate Link for eBay CEO John Donahoe Skirts Issue of Fee Impact   eBay CEO John Donahoe Skirts Issue of Fee Impact

This user has validated their user name. by: Ric

Sun Jul 21 15:07:36 2013

As it stands, John Donahoes arrogance and ignorance of what made eBay tick is now noticeably having a negative effect eBay's marketplace bottom line.

In year 6 of his 3 year turn around plan, the combination of slow but constant increase of fees, draconian policies, and destructive innovations are coming home to roost.

eBay's courtship with high volume sellers is weakening as the big sellers find eBay is not all it was cracked up to be. Things are getting to the point where eBay Diamond Seller volume can no longer disguise the decrease in volume resulting from the continued exodus of small sellers.

It apparently is just beginning to dawn on Mr Donahoe that the gradual alienation of small sellers does in fact serve to erode the buyer base. After all, when tens of thousands of sellers are purged by eBay's anti seller policies, and thousands more walk away because their listings never get any eyes, the eBay buzz dwindles to barely a low din.

Donahoe's turn around plan grossly miscalculated the negative effect the purge of small sellers would have on the buyer base.Unceremoniously kicking sellers to the curb generates more negative word of mouth than Donahoe's clean up plan is capable of replacing.

Donahoe can quote all the new user statistics he can invent, but the question is where are the corresponding sales to go with that new user momentum?

Donahoe can quote all the increases he can invent regarding mobile transactions, but the reality is that the growth in mobile transactions does not represent new business as he would have Wall Street believe. The growth in Mobile transactions amounts to little more than existing users connecting to eBay in a different way.  

In other words, triple digit increases in Mobile transaction volume is all well and good. The problem is triple digit mobile growth translates into barely double digit marketplace growth primarily because these are not new users as Donahoe would have Wall Street believe.

Donahoe has bamboozled investors to the saturation point.

Mr Donahoe, on your next 'thinking day' how about starting by asking yourself a question:   How much do you like the fact that you have somewhat reduced the "noise" and replaced that "noise" with the sound of crickets chirping?

Perhaps it is finally going to dawn on Mr Donahoe that small sellers were eBay's canaries in the coal mine, and he has managed to kill off too many of them.

Perminate Link for eBay CEO John Donahoe Skirts Issue of Fee Impact   eBay CEO John Donahoe Skirts Issue of Fee Impact

This user has validated their user name. by: Philip Cohen
Web Site

Sun Jul 21 15:43:44 2013

Actually, it's now well into the sixth year of the Ho's three-year "turnaround" and eBay is still proceeding at an ever-increasing pace down the toilet …

Legg Mason Thought Leader Forum (2007): Donahoe rambles ... http://bit.ly/16McqO1
800,000 free listings on eBay for anyone that has the staying power to complete a read of this tripe …

Go, Johnny, go … far, and soon … http://bit.ly/12xvzyA

Perminate Link for eBay CEO John Donahoe Skirts Issue of Fee Impact   eBay CEO John Donahoe Skirts Issue of Fee Impact

This user has validated their user name. by: Philip Cohen
Web Site

Sun Jul 21 15:58:10 2013

If you chart the share prices of eBay and Amazon it is clear that the Ho has not fooled the smart money on Wall Street; only the paid eBay shills, and probably those hacks thaty hope to be paid, and drink the concentrated Kool Aid, undiluted, directly from the eBay Dept of Spin, sing eBay’s praises …

Still, it's nice to know we can always be confident that whenever an eBay spokesperson's lips are moving they are, invariably, being disingenuous ... http://bit.ly/YvxFEg

Perminate Link for eBay CEO John Donahoe Skirts Issue of Fee Impact   eBay CEO John Donahoe Skirts Issue of Fee Impact

by: Digmen1 This user has validated their user name.
Web Site

Sun Jul 21 18:37:05 2013

I'd like to see two quarerly reports with definete drops in ebays gmv before I got any hopes up about JD leaving and ebay changing back to what it was.

Share price is one thing, but its sales and fees that are the main thing. Whether sellers are small, large, chinese or mobile does not matter its the number of sales and the income that matters to ebay and its board.

Perminate Link for eBay CEO John Donahoe Skirts Issue of Fee Impact   eBay CEO John Donahoe Skirts Issue of Fee Impact

This user has validated their user name. by: Philip Cohen
Web Site

Sun Jul 21 19:35:56 2013

@Digmen1,

Are you still manning the smoke generator? Have you no comprehension that a company’s performance is invariably reflected in its share price? Indeed, the share price is the only thing that matters, or should matter, to the directors of a publicly listed company: the directors are supposed to represent the interests of the shareholders; the senior executives, well, we know they reluctantly represent the shareholders only in so far as their bonus “performance” shares should be based on the return to those shareholders; the question is, where is the return to eBay’s shareholders?

The reality is, if the smart money on Wall Street believed that eBay was performing (regardless of GMV claims), eBay’s share price would undoubtedly not be such a small, and getting smaller, fraction of Amazon’s share price …

eBay’s directors are either asleep on the job or, possibly, they are as disingenuous and unscrupulous and/or incompetent as eBay’s senior executives so demonstrably are … http://bit.ly/11F2eas

Perminate Link for eBay CEO John Donahoe Skirts Issue of Fee Impact   eBay CEO John Donahoe Skirts Issue of Fee Impact

by: Massachusets Howler This user has validated their user name.

Sun Jul 21 21:41:40 2013

Hey Ming!
Ebay has lost 55 million out of 80 million sellers?
That is quite a drop.
MH

Perminate Link for eBay CEO John Donahoe Skirts Issue of Fee Impact   eBay CEO John Donahoe Skirts Issue of Fee Impact

by: Ed This user has validated their user name.

Sun Jul 21 21:54:04 2013

We may not hat invested in ebay stock but when a small seller invested close to $100,000 in products to sell on ebay and then ebay cuts the search to where that small seller has to fight to make a profit due to the games ebays plays tells this seller is not a very honest partner.

I don't think it is a good thing being a TRS when ebay is doing every thing in its power prevent us from making a return on our investment.

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