eBay Inc. (EBAY) Presents at Morgan Stanley Technology, Media & Telecom Conference (Transcript)
I know businesses are in business to make money, but some of this seems in poor taste. Tell me how wrong I am.
Jamie Iannone - CEO and Steve Priest - CFO from ebay were on a conference call with Lauren Schenk from Morgan Stanley.
Quotes from Jamie Iannone, "One of the great benefits of eBay is that 90% of our traffic is either organic or free. So, we only pay for 10% of our traffic. "
My question: Then why are sellers being charged for additional traffic to our listings?
JI: "To your question on take rate, we constantly look at take rate as a way to say, what's an opportunity to lean in or to grab more take rate. "
My comment: Why is taking more of a seller's money always your best way to increase your profits? Why does this sound like a quote from a don??
JI: "So last year, we were able to remonetize our sneakers category and continue the great growth that we've seen. We were able to do the same type of thing with our watches and increase the take rate."
Me: I can barely afford sneakers at the outlet, so I won't be buying the ridiculously priced ones on ebay anyway.
"we've been rolling out new financial services products quarter after quarter. So if I talk about the one we launched in Q3, which is faster payouts, great for our sellers, they get their money faster, but we charge a fee associated with that."
Me: I didn't know there was a fee, always fee driven here, aren't we? I'll just get my regular payout, please.
Quote from Steve Priest: "So, if I look back to the fourth quarter, our overall take rate was 13.8%. So pretty significant take rate."
Me: It's nice that you acknowledge that your fees are a significant amount to take.
Quote from Lauren Schenk:
"Your target is to return 125% of free cash flow to shareholders from $22 million to $24 million. Given last year, you were well above that 170% or so."
Me: Maybe I should buy ebay stock, I'd probably make more that way.
If anyone is interested in the transcript, it's on SeekingAlpha dot com /article/4584959-ebay-inc-ebay-presents-morgan-stanley-technology-media-and-telecom-conference-transcript
All in all, I am content enough at ebay, after all I just bought a store subscription to be able to list more. I guess no matter where we go or what we do in life, someone always wants a bigger piece of the pie.
simply-the-best-for-you
·3 years agoDoing a few more quick looks, it seems that is suspiciously close to the number of total listings at any given time, so perhaps the website they are quoting got it confused with total listings. If that's the case, my apologies for getting it wrong, I relied on Google & no "hyperbole" was intended.
Well aware their numbers have been dropping, but it's still a very active marketplace. Never gonna outpace AMZN though, no matter how much they want it to.
simply-the-best-for-you
·3 years agoTransactions daily. That's the number I've heard for several years, but I couldn't remember exactly, so I googled it. Google got it from here:
https://www.bigcommerce.com/blog/ebay-marketplace-statistics/
Perhaps it's not correct, google is not always perfect.
Well aware that AMZN is much bigger & has many more tx's.
slippinjimmy
·3 years agoSo that is/was the source for this occasionally posted "fact".
First thing, the blog article is old, it's not dated but appears to be from 2018 or 2019 based on the content (post PayPal split, pre Stub Hub sell off).
This is the part where your 2B comes from, given the context the use of the word "transaction" is extremely misleading. What they are referring to is user traffic and activity with 2 billion API calls (searches / page views etc. plus seller activity)
This site has a nice chart of the top 100 US websites by traffic, interesting breakdowns of pc/mobile, average page views, time on site. I only looked at the top 40, not much in the way of ecommerce, social media and porn get all the action. I do not vouch for their numbers but good for general comparisons.
US ecommerce sites (worldwide would be dominated by sites in China.)
#6 - Amazon
#15 - Walmart
#20 - eBay
https://www.semrush.com/blog/most-visited-websites/
shar_27
·3 years agoWow ! 2B per day on eBay ? 🤕 can you be more hyperbolic?
See attached
shar_27
·3 years agoThese grandiose speeches cannot conceal the fact that eBay currently only share 3.5% of US ecommerce.
In other words, out of the 10 people you meet on the street, 9 and a half of them either do not know about the existence of eBay or do not use eBay at all.
eBay has too many problems, and sales decline is almost an issue that every eBay seller is currently facing.
No point talking about eBay organic traffic, since it's scarce anyway...
simply-the-best-for-you
·3 years agoHow is the organic traffic scarce when eBay there are 2B (that's billion with a B) sales per day on eBay? eBay has problems (as do all co's) & declining sales is one of them. But to say that organic traffic is scarce when there's around 2B tx's a day, I'm not following.
my-cottage-books-and-antiques
·3 years agoSome interesting stats can be found here. You can compare ebay to other sites as well....I chose ebay versus Amazon:
https://www.similarweb.com/website/ebay.com/vs/amazon.com/#overview
slippinjimmy
·3 years ago2 Billion what?
It's not number of sales
It's not the value of sales
Where did you come up with this number?
simply-the-best-for-you
·3 years agoNo, I don't see it as being in poor taste. JI's comment about 90% of traffic being organic or free is referring to eBay's site traffic. It is organic or free in that they are not paying for the traffic. Though there is some advertising cost involved. He's basically bragging that their customer acquisition costs are neglible, which is fair & desired, for a business.
I posted it in another thread, the other day. The minute eBay went public, they have one group of people they have to make happy (2 really) and it's neither buyers or sellers. It's shareholders & the Analysts. I might argue the 2nd is more important than the first b/c of how Wall St works.
Maybe it's just b/c I have worked for huge corps all my life & was at a huge company during the time they went public, that I don't see anything wrong or in poor taste about any of this. He's doing his job.
ETA: Oops, I see that Jimmy already made the same point I did, in his reply. GMTA.
anasazirose
OP3 years agoI have also worked for large corporations, and the things I see that they excuse to make a profit. The waste is disgusting. I know this waste aspect doesn't apply to ebay but here's some things I've seen:
Gibson Greetings. The day after the holidays, they go into stores, count all the holiday items that didn't sell and credit the store. The greeting cards, stuffed animals, wall hangings, invitations, paper plates, napkins, other table ware, candles, and EVERYTHING relating to that holiday goes in the dumpster.
A boss was asked if an employee could take the stuffed animals to Children's Hospital. The answer was "No. Once it becomes known that Gibson donates the merchandise to the hospital, people going to visit those patients will choose to not buy Gibson, because the patients get them free" In the dumpster they went until a store owner, after getting a credit, pulled them out of the dumpster and marked them half off. Then the merchandisers were required to remove the items from the store to dispose of them. If they didn't want to, cards needed ripped or soiled, candles cut, plates opened and strewn about the dumpster, plush had to be cut.
Dick's Sporting Goods opened a warehouse, hired at $15, when they had twice the applicants they needed, they called the newly hired people and dropped the pay to $8, take it or leave it. Yes, this was mid 2000's
A worker at the warehouse applied for a DSG credit card and was declined because she didn't make enough money. LOL, that was very disheartening to most of the employees, and she was told to stop telling people .
DSG purchased Nike athletic wear that had Target price tags of $10. DSG took off the Target tags, put on their own tags that said $39.99, with a computer printed red line through it with $29.99 printed to look like it was hand written, THEN put a clearance sticker on them for $14.99. For an item they had not had in their stores.
DSG advertised a 50% off sale on golf clubs. The ad said $399.99 MSRP, marked down to $199.99. Only thing is, once they came into the warehouse, the actual MSRP was $299.99. So, instead of selling them for $150 or even the $200, they had workers with razor blades carefully cut the paper layer off the cardboard box in 2 places, then place a $399.99 price tag on them. again applying a sticker that looked hand written marking it to the half off as advertised.
THEN, when Nike discontinued a certain shoe style in a particular color, they were pulled from the stores and sent to the warehouse where a security guard had to take the left show from each box, and throw the right show and the box into the dumpster. The left shoes were locked in the gun cage until the dumpster was picked up, then the remaining shoes were picked up.
DSG then got a state tax break to double the size of their warehouse. They told PA they were financially strapped. They promised to hire 300 additional employees. They were not to use the warehouse until the new hires started. They used the warehouse, kept their tax break, never hired additional workers, then purchased (while financially strapped) another sporting goods company.
I also know employees who worked at a certain class one railroad that has been in the news recently. If what those employees say about that company cutting corners is true, the company's actions are probably illegal.
All for money. When is enough money enough money? The love of money is the root of all evil.
Sorry for the long venting. Good night all.
vintagecraze50
·3 years agoI feel it is good that most of the traffic on Ebay is organic. That means that the majority of sales happen from the people who visit the site to look. That means ebay is still a very popular first stop rather than looking at google or other search engines to buy.
Less money spent by ebay for inorganic traffic by having to pay google etc would cause, less take rate for ebay. They do not need then to spend more money on ads because the site is popular still.
As gar as the expensive sneakers and watches etc. You and I may not be able to afford them, BUT, there are plenty of folks with big bucks who can and THOSE,big bucks people also spent money on poor little you and me.
vintagecraze50
·3 years agoOne more thing. The take rate from you and me is not that terribly high as long as you price your items properly.
slippinjimmy
·3 years agoJamie Iannone - CEO and Steve Priest - CFO from ebay were on a conference call with Lauren Schenk from Morgan Stanley.
Quotes from Jamie Iannone, "One of the great benefits of eBay is that 90% of our traffic is either organic or free. So, we only pay for 10% of our traffic. "
"traffic" in this instance means people who come to eBay.
One uses Promoted Listings to attract buyers that are already on site to look and hopefully buy YOUR item instead of the sale going to another seller.
anasazirose
OP3 years agoI see your point, however promoted listings are also advertised by ebay outside of ebay.