EcommerceBytes Letters to the Editor Letters to the Editor
Your emails to EcommerceBytes
For consideration, send your email to ina@auctionbytes.com with "Letters to the Editor Blog" in the subject line! Remember to include your name as you would like it to appear in the blog.
Sun Apr 29 2018 09:39:14

Wall Street Starts Seeing through eBay Smoke and Mirrors

By: Reader

Sponsored Link

Dear Ina,
It appears as though at least one Wall Street analyst is beginning to see past the smoke and mirrors of eBay CEO's Devin Wenig. (Link to SeekingAlpha.com article.) This analyst is now seeing eBay in much the same way many small sellers have been seeing eBay over the past few years.

Key observations:

* The company's latest Q1 results reveal a platform that's struggling to be relevant to users and poor forward-looking guidance that indicates management's uncertainty about the future.

* It costs nothing to use eBay as a buyer, yet eBay's active buyer pool absolutely pales in comparison to Amazon. There is no better indication that eBay's platform no longer jives with the modern consumer.

*... for a company that's posting low single-digit growth, contracting profit margins, and has little hope of being relevant in five years, eBay is more of a value trap.

* eBay still relies heavily on its core Marketplace business to drive results, but looking at the low user growth and just 1% growth in sold items, it doesn't seem the product is capable of appealing to today's buyers.

* eBay's widespread reputation for charging high seller fees also has alienated a large part of the supply side of eBay's marketplace.

* eBay is attempting to leverage AI technologies to improve the marketplace search functions on the site, but it's unclear whether this alone can bring back a swath of users.

* Acquisitions and buybacks can only help the optics for so long - the company does heavy $10.7 billion of cash on its balance sheet, but that's balanced by an almost equal ($9.2 billion) load of debt. Investments in product development are a good attempt at driving organic growth, but it's doubtful that eBay can return to double-digit user and GMV growth.

*eBay's Q1 results reveal a company that's struggling to remain relevant and is having only modest success at growing its user base and GMV.

* It's difficult to envision this company still being healthy in five years. eBay already has tried many different measures to revitalize itself, all to mixed results.

Small sellers, the canaries in the eBay coal mine, have been pointing out many of these observations since John Donahoe ran the company. Wall Street generally continued to drink the kool aid passed out in quarterly reports by the company's CEO. 

It appears that now the company is going to be challenged by Wall Street to actually grow and perform instead of relying on promises of improvement based on ill conceived marketplace changes as those many so called 'improvements' have consistently failed to produce any significant improvement in GMV growth.

Regards,
Ric

Comments (48) | Leave Comment | Permalink
Readers Comments

Perminate Link for Wall Street Starts Seeing through eBay Smoke and M   Wall Street Starts Seeing through eBay Smoke and M

by: futervest This user has validated their user name.

Sun Apr 29 09:59:17 2018

NO LOSS. They shot us canaries Now we get to watch them die.

Perminate Link for Wall Street Starts Seeing through eBay Smoke and M   Wall Street Starts Seeing through eBay Smoke and M

This user has validated their user name. by: FidoMaster

Sun Apr 29 10:34:22 2018

This was a great write-up by Gary Alexander - one of the most astute beyond the typical dashboard analytics of  EPS, P/E and the like.  

Mr. Alexander clearly "gets it" that there exists a seller revolt and frustration brewing under the (mostly) calm exterior that's of a different tone and timber of the usual gripes over the years.

Most analysts would have no real insights into these issues driving off sellers in droves.  If sellers aren't already on multiple platforms (or dumped eBay altogether), they are actively cross posting and making contingencies for eBay's continued incompetence, "greed", increasing platform costs, and numerous other seller frustrations captured here in ECB that are at an all-time peak.

Thanks for writing that in Ric.

Perminate Link for Wall Street Starts Seeing through eBay Smoke and M   Wall Street Starts Seeing through eBay Smoke and M

This user has validated their user name. by: iheartjacksparrow

Sun Apr 29 10:42:58 2018

This appears to be the strongest denouncement of eBay's failed policies and low growth rates from a major financial reporter. Hopefully more serious publications will take a hard look at eBay and expose the continuing bad decisions they make which do not benefit their sellers. The fact that this article is predicting the demise of eBay within five years should be a wake-up call to Devin that his vision for the site is not working.

Perminate Link for Wall Street Starts Seeing through eBay Smoke and M   Wall Street Starts Seeing through eBay Smoke and M

by: pace306 This user has validated their user name.

Sun Apr 29 10:55:52 2018

The severe problems that plague eBay are so far beyond "just the numbers" that its scary.

This article is a good start - admitting that the emperor doesnt have "new clothes" - but it doesnt scratch the surface of whats going on.

Most eBay executives simply have ZERO experience in etail/ecommerce/wholesale/retail and therefor dont understand the dynamics of making a marketplace work. They may be nice and well meaning people, but they are mostly lawyers and execs that have no idea how ecommerce works.

You wouldnt go to a hospital where the employees have no medical training - why accept that from your ecommerce company????

eBay (as the article says) has NO forward plan - beyond selling ad space. They treat their sellers with disdain, treat them as crooks and theives, charge them FVF on things they have no involvement with (fvf on shipping), they made VERO into a profit center and then let it run wild on honest sellers, they are totally changing the construct of the company - going from a listing based system to a buy box system, they dont show sellers listing 24/7/365 - they instead use badly written AI to show buyer what THEY think is relevant .... and the list goes on and on.

eBay Valet etc all went up in smoke ... and if eBay isnt careful - even more programs will be closed.

eBay - STOP listening to gen Z people with no idea how to run things - listen to your sellers, ignore the lawyers, go back to your roots, show ALL listings 24/7/365 and your fortunes will change. Failure to heed these warnings - will cause your downfall.

Perminate Link for Wall Street Starts Seeing through eBay Smoke and M   Wall Street Starts Seeing through eBay Smoke and M

by: TomH This user has validated their user name.

Sun Apr 29 12:59:58 2018

To actually fix eBay, they need to fix their broken inta-structure.  Fix the code base. Invest in top notch servers, with enough capacity to serve every listing 24/7, which requires superior coders, across  the entire database, to fix it and develop a search that actually brings up items searched for and not what the damn company is trying to push.

Do not be Amazon II. Be eBay.

Perminate Link for Wall Street Starts Seeing through eBay Smoke and M   Wall Street Starts Seeing through eBay Smoke and M

by: TomH This user has validated their user name.

Sun Apr 29 13:02:06 2018

PS: Anyone in the upper levels of management whose primary degree and effort equal lawyer, should be in the legal department and nowhere near operational areas.

Perminate Link for Wall Street Starts Seeing through eBay Smoke and M   Wall Street Starts Seeing through eBay Smoke and M

by: geoffreymason This user has validated their user name.

Sun Apr 29 13:07:35 2018

As a starter for abandoiing the ebay ship before it sinks, I have added an Amazon account. Now I am transitioning to eCrater. Ebay is the destination for those who want goods at dirt-cheap prices.

Perminate Link for Wall Street Starts Seeing through eBay Smoke and M   Wall Street Starts Seeing through eBay Smoke and M

by: Snapped This user has validated their user name.

Sun Apr 29 13:11:27 2018

Sittin' on the dock of the eBay
Watchin' the sales, fade away
I'm sittin' on the dock of the eBay
Wastin' time...
(Sorry Otis)

Ask not for whom the (closing) bell tolls eBay, it tolls for thee...
(You too, John)

Perminate Link for Wall Street Starts Seeing through eBay Smoke and M   Wall Street Starts Seeing through eBay Smoke and M

This user has validated their user name. by: FidoMaster

Sun Apr 29 15:12:06 2018

Great idea Snapped!  Can I play too?

(to the tune of Pink Floyd's ''Money'')

Wenig, get away.
  Get a good job on eBay and you're okay.
Wenig, he's a gas.
  Grab that cash with both hands and make a stash.
New car, caviar, four star daydream,
  Think I'll buy me a Wenig GulfStream.

Perminate Link for Wall Street Starts Seeing through eBay Smoke and M   Wall Street Starts Seeing through eBay Smoke and M

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

Sun Apr 29 15:25:15 2018

Gary Anderson wrote in his article, ''While eBay has undoubtedly played with the scaling of the above chart to make the growth seem more impressive, in reality, the company has been churning out low single-digit growth in its base of active buyers.''

Another great point. I've recreated the eBay buyer growth stagnation chart with correct unadulterated scaling.  

Pic at ''Web Site'' link under Fido's mugshot.

Looks pretty flat, eh?

Perminate Link for Wall Street Starts Seeing through eBay Smoke and M   Wall Street Starts Seeing through eBay Smoke and M

by: Grady This user has validated their user name.

Sun Apr 29 17:59:21 2018

As someone else pointed out, how many of the transactions on the venue are failed sales? Refunds? Scams?  How many of those result in a seller leaving the site for good?  This matters, there is less to chose from, zero trust, less buyers, less in the pay pal till to fuel impulse buys and numerous IT issues.

It is indeed beyond repair as a whole. To think that they started with a venue that ran really well, and kept breaking it until they got to this is incredible.

Perminate Link for Wall Street Starts Seeing through eBay Smoke and M   Wall Street Starts Seeing through eBay Smoke and M

by: RL15 This user has validated their user name.

Sun Apr 29 18:13:10 2018

its about time the smoke and mirrors are finally be seen as the sham that it is.

say good bye to the delusional ceo even though it may be to late to save the titanic.



Perminate Link for Wall Street Starts Seeing through eBay Smoke and M   Wall Street Starts Seeing through eBay Smoke and M

This user has validated their user name. by: eXtinctBay

Sun Apr 29 18:14:52 2018

@Pace

Well said (especially the last paragraph).

I constantly preach that eBay has to show all item listings all the time if they wish to remain viable, no matter how difficult this task may seem to be.

The only way this will be accomplished is with this new listing format, again, only if ALL AND EVERY ONE of the purchase options are included for each condition attribute.

I am holding out hope that once the new product based listings are rolled out, it will ''improve the conversion rate'', as stated in the latest Seller Update.

Amazon shows all items by each condition, in order of price. I am confident that eBay realizes they must do the same, and also that the hiding of listings at any time has been to their detriment.

Not to mention is a violation of the most basic rule of retail- if a customer places money down to purchase something, you cannot give them nothing in return.

Perminate Link for Wall Street Starts Seeing through eBay Smoke and M   Wall Street Starts Seeing through eBay Smoke and M

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

Sun Apr 29 18:37:48 2018

Ebay handed Donohoe a very good site with some issues but nothing major wrong with it.  But he came from a company where they acquired companies and then started cutting costs and throwing away things they felt hurt them and then maybe a year later resold the company at a profit..  Donohoe never learned the concept of long term planning and in his 8 years there all of the minions he hired were trained the same stupid way.  So not only is Ebay in a situation where they really cannot look at long term fixes due to the poor management the last 10 years, but they do not have anybody capable of making a long term plan.

Donohoe threw in his Disruptive Innovations and now you have Wenig (spell check keeps wanting to change this to Weenie,..lol) with his Disruptive Technology and Ebay has gone through 10 years of constant Disruption, so what did they expect??  Ebay needs to spend some money to put whatever technology in place to once again show all listings 24/7/365 or at least show all USA listings 24/7/365 on the .com site.

Instead Wenig has been trying to artificially inflate the stock price by purchasing Billions of Dollars worth of Stock back so there are less shares to split the profits with and supposedly make the others worth more.  How has that been working out for you Wenig?/  If Ebay had spent that money trying to fix what they continue to break and ensuring that sellers items were seen for sale , Ebay would be a in a lot better place than it is now.  But all he was concerned about was a quick fix so he could sell off the stock options he had and  make a quick bundle for himself.

Now he even has his exit strategy set up by joining the GM BOD.  He sees the writing on the wall just as the rest of us do.  He has run the company into the ground and has no idea how to fix it other than to keep turning to the Chinese government since he considers them Ebays future.  Hell he probably has deals in place with them that will pay him for all of his work helping them destroy the US businesses so they could benefit  and all he has to do is get fired or retire.  I personally hope they can his rear end with no severance package other than what he already stole from the company and its sellers.

Perminate Link for Wall Street Starts Seeing through eBay Smoke and M   Wall Street Starts Seeing through eBay Smoke and M

by: Snapped This user has validated their user name.

Sun Apr 29 21:00:15 2018

''* The company's latest Q1 results reveal a platform that's struggling to be relevant to users and poor forward-looking guidance that indicates management's uncertainty about the future.''

There's a problem with this paragraph.  Thing is, it speaks of the eBay 'struggle' and management shortcoming as if it's somehow something just RECENTLY apparent.

Perhaps it is though.  And that's the real issue.  That nobody on the street has bothered to BE aware, despite the widspread scope of (ahem) concerns voiced over the past DECADE of eBay debauchery and seller denegrations.  As has been stated, it goes - has gone on - and on - and on - way beyond ''the numbers''.

And while all the disruptifications have whitewashed and lipsticked eBay's 'appearance' in 'colors' that may indeed be more appealing to the undescriminating millenials, the diminishing substance within, along with the sheer clumsiness and increasingly off-putting mechanics of the place are the real crumbling pillars causing the 'loud' quaking, creaking and groaning that can no longer be ignored.

At least not completely.  

So, good first baby step and all that.  But not at all surprisingly, one can also count on eBay themselves continuing to be much like the deterious of the ancient Egyptians.  In denial.

Perminate Link for Wall Street Starts Seeing through eBay Smoke and M   Wall Street Starts Seeing through eBay Smoke and M

by: Grady This user has validated their user name.

Sun Apr 29 21:07:56 2018

The Americans don't stand a chance if they continue to push this garbage in colleges. Disruptive Innovation, Sexuality, Ancient Dance Rituals, Marijuana as a medication, Sports Sciences......How can you build a country on that garbage?

Perminate Link for Wall Street Starts Seeing through eBay Smoke and M   Wall Street Starts Seeing through eBay Smoke and M

by: Snapped This user has validated their user name.

Mon Apr 30 00:59:50 2018

Interesting observation, Grady.

Although Americans didn't exactly invent sexuality, ancient dance, herb based medicines, or even athletic analytics.  And the country has done pretty well (recent adminstration abhorrences aside) from the refuse and refugees of the rest of the planet.

As for disruptive innovation, well, no argument there.  At least the way eBay has applied it.  Stink epitomized, to be sure.

So, thanks for chiming in.  Having the freedom to do that without fear of state sponsored censorship is something Americans are kinda proud of having written into their Constitution.

Ironically, even that was kind of a disruptive innovation example (at the time) done right, don'tcha think?

Perminate Link for Wall Street Starts Seeing through eBay Smoke and M   Wall Street Starts Seeing through eBay Smoke and M

by: Tiffee Jasso This user has validated their user name.

Mon Apr 30 01:05:49 2018

When Ebay goes back to plan #1, and  opens the doors to everyone 24/7 that sells and leave them open, they will see double digit growth once again.
Selective search algorithms for merchandise does not work and is prejudicial to the majority of sellers.
Example: If a brick  and mortar store decided to herd its buyers to the towel section, and put up barriers on its other merchandise sections that store would be out of business within a year or two, if not sooner. Just saying...

Perminate Link for Wall Street Starts Seeing through eBay Smoke and M   Wall Street Starts Seeing through eBay Smoke and M

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

Mon Apr 30 02:30:00 2018

Pace306 comment about the CEOs and upper management not knowing a thing about etail/retial or anything close to that knowledge that would seem to be something that should be uppermost on the hiring committee's mind when picking these folks, but apparently that isn't how things work. And now GM has hired Wenig to be on the BOD there. Unless he was a fuel jockey at some time in his past life, what experience is he bringing to GM? Where are these big companies hiring incompetants to serve on executive boards and BOD? I realize that to be on a companies BOD you don't have to actually be in the business of what the company is about, but they should at least have some GOOD experience in running a company themselves or being the best in their field. He can't even get his own company on the right track, why does GM think he can do anything to help them. I felt the same way when Obama used Donuthole as one of his mentors on foreign trade or whatever board it was.

People out side of ebay seem to have no clue what a poorly run company ebay has become. They still seem to have in their head this thought that anyone associated with ebay must be one of the best and unforunately that isn't true. I left ebay 10 years ago. Last fall I tried ebay again with a limited amount of product, with barely any sales and they were bottom of the barrel sale prices. I'll stick with Amazon and eCRATER at this point. At least I am making money with them. I'm glad that Wall Street is finally opening their eyes to the fiasco that ebay has become!

Perminate Link for Wall Street Starts Seeing through eBay Smoke and M   Wall Street Starts Seeing through eBay Smoke and M

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

Mon Apr 30 02:30:03 2018

Pace306 comment about the CEOs and upper management not knowing a thing about etail/retial or anything close to that knowledge that would seem to be something that should be uppermost on the hiring committee's mind when picking these folks, but apparently that isn't how things work. And now GM has hired Wenig to be on the BOD there. Unless he was a fuel jockey at some time in his past life, what experience is he bringing to GM? Where are these big companies hiring incompetants to serve on executive boards and BOD? I realize that to be on a companies BOD you don't have to actually be in the business of what the company is about, but they should at least have some GOOD experience in running a company themselves or being the best in their field. He can't even get his own company on the right track, why does GM think he can do anything to help them. I felt the same way when Obama used Donuthole as one of his mentors on foreign trade or whatever board it was.

People out side of ebay seem to have no clue what a poorly run company ebay has become. They still seem to have in their head this thought that anyone associated with ebay must be one of the best and unforunately that isn't true. I left ebay 10 years ago. Last fall I tried ebay again with a limited amount of product, with barely any sales and they were bottom of the barrel sale prices. I'll stick with Amazon and eCRATER at this point. At least I am making money with them. I'm glad that Wall Street is finally opening their eyes to the fiasco that ebay has become!

Click to view more comments
1 2 3  [Next Page]


Login is required to post comments.
To sign in to leave a comment using your AB Verify User Name, fill in the form below. If you have not yet signed up for AB Verify, or if you'd like more information, go to the Registration Page
.

Login for AB Verify
Be sure and use your email address and password to log in.

 
Email:
Password:
 
 Forgot Your Password?
 Even though you are signed in with the AuctionBytes Blog, you will have to sign in to the EcommerceBytes blog. But you can sign in with your existing AB Verify info.