A Growth Plan for eBay: Buy Etsy

[haute_again]

An analyst proposes merging the online retail firms. One way to take on Amazon.com.

By

Emily Bary

Jan. 13, 2017 6:36 p.m. ET

What if eBay combined with Etsy in an attempt to take on Amazon.com?

Think of the possibilities: a company that helps you sell the stuff you found in your basement joining forces with a company selling homemade crafts that might one day wind up in your basement.

It just might work, says James Cakmak, an analyst at Monness, Crespi, Hardt & Co.

It’s still growing on its own, but eBay might want to consider some outside help, as well, Cakmak wrote in a research note yesterday. One opportunity that could make sense: a merger with online crafts-marketplace Etsy.

With the PayPal side of the business spun off, eBay has had to focus more on its marketplace. The company has made some progress there, expanding its StubHub ticket-resale segment and increasing its overall “take rate” -- the portion of merchants’ sales that the company keeps for itself.

The combined company would have a “longer tail of goods,” Cakmak wrote, helping it to compete better with Amazon. “The core to Amazon’s philosophy is expanding selection.”

Amazon has its own crafting business, called Handmade, but Etsy’s selection is 100 times larger. “Any way to differentiate with Amazon is a win,” Cakmak wrote.

EBay could help grow Etsy’s overseas business and also promote some of its own items on the Etsy site, Cakmak suggested. He noted that both companies are looking into ways of using machine learning to improve search functions.

Etsy is the more efficient business, with a take rate of 13%, while eBay’s is just 8.5%. So Etsy’s know-how could help boost eBay’s profits.

Cakmak has a “Buy” rating on both companies.” He sees 36% upside for Etsy and 17% upside for eBay.

Big Picture: Online marketplaces eBay and Etsy could make for a nice marriage, one analyst says. A merger might help both companies better compete with Amazon.

http://www.barrons.com/articles/a-growth-plan-for-ebay-buy-etsy-1484350617

[rixstuff]

Etsy is a handcraft site but it is also a vintage/antique site.  Nearly anything older than 20 years old can be sold there.  I just got my mom a crock pot to replace her favorite that isnt made any more and I have bought jewelry making tools over there (craft materials are also sold there).

[rixstuff]

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@chuck-r wrote:

This would be a good idea. Etsy also requires sellers to refund the buyer if the seller can't control the weather. It's the same insanity. (If the item arrives late because of weather issue and the buyer files a claim, the seller must provide a refund.)

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Not exactly - many items there are handcrafted and made to order.  Nobody on Ebay can take up to 3 months to ship an item.  Etsy also caught on to the scam of trying to get refunds without returning the item WAY before Ebay did.

[rixstuff]

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@rainbowcolorz wrote:
I'm not sure how/if a merger would work. My first love is (was) eBay until they let the Chinese sellers come in and sell the same things I sell (and have been selling for years at a very good price) for pennies on the dollar with free shipping. But I still sell a lot on eBay, just the $ coming in is much lower. Thank goodness I don't have to pay bills from the $ I make online.

On Etsy, my sales have slowed down in the last few months but I enjoy putting something up for 20¢ for 4 months.

I have lots of vintage items as well as new items so both places work well for me.

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Yep - with that long form you can afford to throw up whatever you have and see who bites.  I have always been delightfully suprised at what sells (it all does eventually)

[rixstuff]

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@the*dog*ate*my*tablecloth wrote:

That would also kill the sales of vintage items none of which have UPC codes.

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TOTALLY!

[lindyslucky]

Thanks for the long form info.

we find Betsys site hard to use. But have never sold things or bought there.

we have stuck with ebay to keep it simple.

but, we have had the feeling that some of our vintage items sold here make their way over there to be resold at much higher price.

Selling on two sites seems hard.

a merger just seems like a writer pulling an idea out of the air to write an article.

but stranger things have happened.

[49ers2004]

ebay is useless.  Plus they're in collusion with PayPal still anyway.  15 years with them, and I am DONE.

They literally stole $700 from me.  I'll just leave it at that.  Never again.

[rixstuff]

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@lindyslucky wrote:

Thanks for the long form info.

we find Betsys site hard to use. But have never sold things or bought there.

we have stuck with ebay to keep it simple.

but, we have had the feeling that some of our vintage items sold here make their way over there to be resold at much higher price.

Selling on two sites seems hard.

a merger just seems like a writer pulling an idea out of the air to write an article.

but stranger things have happened.

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Buyers over there also tend to be targeting specific items and know their stuff.  It is much harder to pass off a brand new Chinese fake for a real vintage item.  There is also more responsibility on the seller to research and be as acurate as possible in listings.