Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Thu July 19 2018 16:18:07

eBay Flummoxed by Fidget Spinners in Second Quarter

By: Ina Steiner

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eBay blamed fidget spinners for a disappointing metric in its second quarter earnings report released yesterday after a Wall Street analyst asked why eBay promotions and the Best Price Guarantee program were not translating into an increase in active buyers during the quarter.

The "stress-relieving" fidget spinners had attracted new buyers in the second quarter of 2017 - but not all of those new buyers who had been eager to get their hands on the latest fad returned to make subsequent purchases, according to eBay Chief Financial Officer Scott Schenkel.

Growth in active buyers in the recent quarter was 3% (excluding eBay's Japanese acquisition), down 1 point versus the prior quarter due primarily to the lapping of new buyers from fidget spinners in the prior year, he said.

Here's how he responded to the analyst's question about active buyers:

"I would highlight that there is actually a couple underlying dynamics that we've called out in the past and that continue and will continue to pressure a rolling 12-month metric for the time being.

"First off, as we kind of talked about, there is a fidget spinner dynamic that in Q2 of last year brought a lot of low ASP (Average Selling Price) items that were a lot of new buyers as well, and we have not retained those new buyers to the extent that we have in the past. They're a kind of "one and done," if you will, buying those fidget spinners - and they were very low ASP items. 

"So, as we lap that, that certainly makes it feel like the underlying growth rate is decelerating when in fact it's more a one-off aspect of that.

"And that same thing is pressuring active buyers, but now, the other thing we talked about was we had been favoring higher ASP branded items in our search, and as that has kind of offset some of the pressure that we got from the fidget spinners in the sold item number pushing ASP up a bit, but really sold items down. So hopefully that's clear. But that's the dynamic between those two both active buyers and sold items."

What he seems to be saying is that in Q2 2017, there were a high number of sold items with low selling prices due to fidget spinners, without anything similar in Q2 of 2018, so that when comparing this year to last year, the growth in the number of sold items is lower than what might be expected.

Schenkel explained how eBay would improve growth in active buyers going forward: "Scaling of new user experiences and our broader marketing programs will continue to be a key area of focus to drive more active buyer growth."

Yet,...it appears eBay is baiting new users with cheap gimmicks. In March, it launched an "Under $10" shop full of the kinds of products found in dollar stores and offering free shipping. Plenty of the items come via SpeedPAK from sellers in China - a delivery service with long shipping times that has led to disappointing buyer experiences, as we noted here.

Either eBay hasn't learned its lesson about the value of new users attracted to cheap goods, or it's trying to attract more of them simply to raise its active buyer metric.

Is eBay placing too much emphasis on attracting new users versus retaining existing users?

We're also perplexed by this statement from above: "we had been favoring higher ASP branded items in our search" - any thoughts about what eBay's chief financial officer meant by that?



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Readers Comments

Perminate Link for eBay Flummoxed by Fidget Spinners in Second Quarter   eBay Flummoxed by Fidget Spinners in Second Quarter

This user has validated their user name. by: Rexford

Thu Jul 19 16:44:49 2018

What I know (and what I have witnessed since Donahoe came on the scene, and doubly so since Wenig came on the scene) is that every assault on small sellers is another nail in eBay's coffin.  Many thousands of sellers have left and continue to leave in droves.  No cheap piece of Chinese made tchotchke or trinket can save them.    Wall Street has obviously taken notice so Wenig must be fidgeting today.

As I write this eBay stock down by over 10%.  Spin on that Wenig!

Perminate Link for eBay Flummoxed by Fidget Spinners in Second Quarter   eBay Flummoxed by Fidget Spinners in Second Quarter

by: nuggets This user has validated their user name.

Thu Jul 19 16:49:39 2018

Yep,  we will be leaving shortly and they will poop their pants.  

Perminate Link for eBay Flummoxed by Fidget Spinners in Second Quarter   eBay Flummoxed by Fidget Spinners in Second Quarter

by: NDrosos This user has validated their user name.

Thu Jul 19 16:55:18 2018

EBay is completely out of touch and doesn't realize the true reasons that their reputation is being ruined.

As a seller, I fully expected the numbers to be low. Buyers are not, and have not been lacking. The markets in most categories (at least those we sell in) are UP rather than down.

But market share for the top sellers is down nearly 25%. Small sellers are upset because they (incorrectly) believe eBay is giving all the sales to big sellers. But Terapeak confirms my previous comments about top seller market share.

So who benefits? In all likeliness (in line with their comments about "new user experience") - new sellers. Which correlates with much of the competitor data we track.

Not to mention, their system has been glitched and bugged beyond belief this year. Policies changed to be much less fair to sellers this year. I had discussions with a seller who sells MILLIONS a month on eBay, and even they are saying this year is unlike any previous year.

If sellers who make eBay their livelihood, can no longer compete? Of course eBay is going to die.

You need sellers to offer more variety of products. You need sellers for competition and better prices.

With those things, buyers will come. Without those things? The income is gone.

I expect this to trend even worse as their seller policies go down the tube in the next couple months. And as they exclude good items for their new catalog.

Which, by the way, we have been trying to get in to the new catalog for MONTHS and no success. Our brand sold #1 in our category for years, and now we have to jump through hoops to get our brand added to new catalog. First they wanted information about where we get our items manufactured?? We provide that. No response for a week, then they want visual evidence of boxes and websites that offer our items??? We send that, and still no response.

Meanwhile, a competitor of ours who is a new seller, makes listings and they are appearing already.

Perminate Link for eBay Flummoxed by Fidget Spinners in Second Quarter   eBay Flummoxed by Fidget Spinners in Second Quarter

by: Silver Ice King This user has validated their user name.

Thu Jul 19 16:55:47 2018

Its just another excuse for the reduction in the quantity of items being sold on Ebay.  Now the excuse is we have been pushing the buyers to only see higher ASP items rather than what they actually asked for in their search.  Until Ebay gets it through their brains that their constant manipulation of the searches that buyers input they are going to find that no matter what spin they put on it they are going to continue to fail.

Perminate Link for eBay Flummoxed by Fidget Spinners in Second Quarter   eBay Flummoxed by Fidget Spinners in Second Quarter

by: nuggets This user has validated their user name.

Thu Jul 19 16:56:25 2018

I wake up every morning dreading what will be wrong today. What new "glitch" or half baked policy will surface.  How will we be ripped off or abused by buyers that can get away with anything.  I should be excited to have a big sales day but this last year has seen more problems with buyers and not because weve changed for the worse. We continue to grow until the june rollout. The number of buyers extorting for partial refunds has gone up exponentially, the returns have skyrocketed by the new customer base that thinks were amazon. We were killing it for years until this latest rollout where there were 10 broken things at once, most still not fixed and a cs that sounded like they were completely out of the loop when you spoke to one who didnt sound like they were about to break.

We liked ebay at one point, even though we didnt agree with all of the changes. This time however, they are pushing one bad idea after another and its costing us lots of money and lost sales added to the chaos of bad buyers.  

They also forget that sellers are buyers too.  

Perminate Link for eBay Flummoxed by Fidget Spinners in Second Quarter   eBay Flummoxed by Fidget Spinners in Second Quarter

by: TomH This user has validated their user name.

Thu Jul 19 16:57:16 2018

Part of the statement is nothing more than lots of meaningless words that actually mean we continue to manipulate search and it is not always working.  

Perminate Link for eBay Flummoxed by Fidget Spinners in Second Quarter   eBay Flummoxed by Fidget Spinners in Second Quarter

This user has validated their user name. by: Rexford

Thu Jul 19 17:06:15 2018

"So who benefits? In all likeliness (in line with their comments about "new user experience") - new sellers."

So much for loyalty, and a finger in the face of 15+ year sellers who helped to build eBay from the ground up.  Loyal hardworking highly rated sellers who have been on eBay for the long haul and who have proven themselves should be highest in search placement.   Not inexperienced newbies.

Perminate Link for eBay Flummoxed by Fidget Spinners in Second Quarter   eBay Flummoxed by Fidget Spinners in Second Quarter

by: ebayout This user has validated their user name.

Thu Jul 19 17:20:34 2018

The execs at ebay should all learn Latin...specifically, the meaning of "mea culpa".
They screw sellers, chase away sellers, turn a blind eye to fraud, tolerate bad buyers and sellers, hike fees and take away discounts.
All they recognize is a projection chart and what day they get paid.
If a seller offered Common Sense on ebay, they'd take it down.

Perminate Link for eBay Flummoxed by Fidget Spinners in Second Quarter   eBay Flummoxed by Fidget Spinners in Second Quarter

by: Grady This user has validated their user name.

Thu Jul 19 17:28:45 2018

We can solve anything with a creative excuse and a few more glitches.

You reap what you sow

Perminate Link for eBay Flummoxed by Fidget Spinners in Second Quarter   eBay Flummoxed by Fidget Spinners in Second Quarter

by: NDrosos This user has validated their user name.

Thu Jul 19 17:29:32 2018

@Rexford:

Precisely.

Also, I'm surprised there's not a bigger deal about these comments:

"the other thing we talked about was we had been favoring higher ASP branded items in our search"

He is directly ADMITTING to search manipulation!

According to this, it seems they were favoring both low-ASP and high-ASP. What about everyone else who is in the middle?

The "Branded" item comments also expose further issues. This means they were favoring "recognized" brands. What about those of us who have been trying to get added to the catalog for months and eBay is still not getting our items in properly???  

Perminate Link for eBay Flummoxed by Fidget Spinners in Second Quarter   eBay Flummoxed by Fidget Spinners in Second Quarter

by: ebayout This user has validated their user name.

Thu Jul 19 17:38:47 2018

Question for Scott Baby...
"Do you have any idea of the amount of fees that ebay DOESN'T get because sellers will not list high dollar items due to the rampant fraud abuse on ebay, and the unwillingness of ebay to properly address that issue?"

Perminate Link for eBay Flummoxed by Fidget Spinners in Second Quarter   eBay Flummoxed by Fidget Spinners in Second Quarter

by: RL15 This user has validated their user name.

Thu Jul 19 18:08:30 2018


the great fidget excuse....

the idiot admits to manipulation instead of the customary smoke and mirrors...

who will be gone first? schenkel or the delusional fidgety soon to be ex ceo

Perminate Link for eBay Flummoxed by Fidget Spinners in Second Quarter   eBay Flummoxed by Fidget Spinners in Second Quarter

by: sasikat9 This user has validated their user name.

Thu Jul 19 18:31:42 2018

Last year figget spinners were selling on fleabay for 5 - 15 dollars from China yet. Buyers soon found out they could buy the same piece of garbage for a 1.00 at their local store and really felt like they were cheated by fleabag. Its a wonder any of them returned for a second screwing.

Perminate Link for eBay Flummoxed by Fidget Spinners in Second Quarter   eBay Flummoxed by Fidget Spinners in Second Quarter

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

Thu Jul 19 18:46:48 2018

Wenig's dog ate the real Q2 earnings report.

Perminate Link for eBay Flummoxed by Fidget Spinners in Second Quarter   eBay Flummoxed by Fidget Spinners in Second Quarter

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

Thu Jul 19 18:50:34 2018

Yo, Wall Street!

The REA: ebafia's ASP continues to plunge is really very simple. Abuse and mistreatment of sellers and encouraging buyer fraud and theft has decreased the number of business sellers and dampened seller's willingness to list high dollar items.

Wall Street and its demands are as culpable as the ebafia's current (mis)management team.

Perminate Link for eBay Flummoxed by Fidget Spinners in Second Quarter   eBay Flummoxed by Fidget Spinners in Second Quarter

by: pace306 This user has validated their user name.

Thu Jul 19 19:01:35 2018

That excuse is what Id expect from my 7 year old nephew when asked why  he did something bad. Is that REALLY what a "seasoned professional" says when asked an important question .... "its the fidget spinners"??????

Ive said this before, Ive said it to eBay (to their face), Ive said it in questionaires - Ive said it 1000x times and they just ignore. Its the same exact thing that everyone (Ric, Ming, Rex, Marie etc) have said - maybe in other words - but the same.

Never mind copying Amazon feature for feature. Simply understand that for ALOT of people and for ALOT of reasons, Amazon is not a good fit - eBay is the answer - take advantage of that fact and work with your sellers instead of trying to run them into the ground over and over again with stupid ideas.

Lets take me for example - Im in the electronics end of eBay. Back on Amazon - a good %65 (maybe even more) brands are GATED. So that means that for smaller sellers - you cant list those goods. Why not UNDERSTAND that and then invite sellers like me (but it could be clothing or personal items or any other category or brand thats gated) and say "we see you would like to sell XXX. We know its sensitive on Amazon - come to eBay and we will help you make sales for those items".

But eBay REFUSES to see that sellers are an asset - they only see sellers as canon fodder - as trash - as a resource to be used up then discarded.

You cant sell Nikon, Sony, Denon and 1000 more brands. Sit down (and it doesnt have to be me personally its just an example) and talk to sellers and get them to commit to eBay. Its not hard, it doesnt cost a whole lot of money if any at all - it just takes GOOD will.

If eBay took %25 of the electronics sales that Amazon MISSES because of their gated games - they would grow by %20 not %7.

Imagine if they did that with all the other categories.

Need to see my invoices to prove the goods are real? NO PROBLEM - sign an NDA and Ill show em - Ive got nothing to hide.

Meanwhile its fidget spinners and thats why we ONLY grew %7 just like we did last time - and oh yeh - heres another issue/problem/rule you MUST do if you want to sell on eBay.

THIS is why eBays chocked full of morons - they just dont think ... at all.

Perminate Link for eBay Flummoxed by Fidget Spinners in Second Quarter   eBay Flummoxed by Fidget Spinners in Second Quarter

This user has validated their user name. by: iheartjacksparrow

Thu Jul 19 19:16:05 2018

"So hopefully that's clear." Are you kidding? The entire statement is nothing more than Weasel Speak (as one of our frequent posters likes to say). And to say that all of eBay's problems can be blamed on fidget spinners no longer being a fad is sheer lunacy.

We've discussed here ad nauseam what eBay needs to do so that both it and its sellers will be successful, but DW and his buddies only seem to be concerned about foisting one ill-conceived scheme after another on its sellers and buyers (to the detriment of the entire site) so their golden parachutes will glisten more brightly.  

Perminate Link for eBay Flummoxed by Fidget Spinners in Second Quarter   eBay Flummoxed by Fidget Spinners in Second Quarter

by: I Must be Crazy This user has validated their user name.

Thu Jul 19 19:40:51 2018

I wonder how much data some analyst had to grind through to come up with this bunch of horse manure.

Mr. Schenkel should be embarrassed. Is he really so naive as to think that fidget spinner sales a year ago is a reasonable explanation for slower growth this year? Look at it another way, the high rate of sales of fidget spinners last year artificially inflated growth over the prior year. Thus any gains reported last year weren't real or sustainable to begin with?? Am I understanding this correctly???

His answer is a red herring. Ebay is experiencing slow growth because the people at the top are doing a POOR job. eBay management's lack of vision, poor execution, and lack of meaningful experience, is the reason buyers have not been retained. You can bet that when a buyer goes to purchase an item, and can't complete the transaction because of one of 50 glitches taking place, they will head over to the leading site. They are NOT coming back unless eBay is the platform of last resort.

Their treatment of sellers is the other half of the story. If I am to understand the response correctly, I should RAISE my prices. If eBay search is surfacing items with a higher ASP, then I should not be ''competitive '' for the buyers' sake, but rather priced to benefit eBay. That little tidbit seems somewhat consistent with I have seen when comparing my sales to my closest competitor. He is consistently 10-20 percent higher than me and pretty well top dollar compared to most sellers of like items. Yet one third of his sales every day are the same as my items higher price, no free returns, and my item sits. Also, I have noticed in several Google searches of my items, his comes up, at the HIGHER price, while mine are nowhere. This may work in the short run, but it is not sustainable. Buyers will figure it out.

eBay is in it for themselves. That goes a long way toward explaining their poor performance.

Perminate Link for eBay Flummoxed by Fidget Spinners in Second Quarter   eBay Flummoxed by Fidget Spinners in Second Quarter

by: eBay Shill Buster This user has validated their user name.

Thu Jul 19 19:50:50 2018

Watching Devin operated is like watching the comedy club, forcing sellers into eBay payments while at the same time forcing them to use Seller Hub as the listing tool for eBay payments.

What Devin is really doing is showing sellers the way straight to the competitive marketplaces, eBay is so inept that sellers are forced to leave due to these forced policies.

The bottom line is investors will force Devin out soon, and this 10% stock drop today is the kick in the rear that the Board of Directors and Vanguard needs to boot this guy down the road and bring a CEO from outside this mess that will listen to sellers instead of forcing them into idiotic schemes dreamed up by highly delusional top management and the yes men that Devin has put in place.

Perminate Link for eBay Flummoxed by Fidget Spinners in Second Quarter   eBay Flummoxed by Fidget Spinners in Second Quarter

by: ebayout This user has validated their user name.

Thu Jul 19 19:50:51 2018

Wenig's Lifetime Achievement Award will be for killing the goose that laid the golden eggs.
I'd pay to see that acceptance speech...$1 tops.

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