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

[haute_again]

This post is directed at no one, I'm just hitting "reply".  I posted the article because it's an interesting read that spawns intersting conversations and no other reason. 

Anyway, I see no benefit for either eBay or Etsy if a merge was ever actually being discussed. I think, as someone mentioned above, it's just a greedy investor hoping to dump his/her bad stock.

I also don't see eBay ever competing with Amazon.  There was a door open for eBay back in 2008, several doors in fact, when eBay was fully capable of squashing Amazons numbers but ebay just seemed to slam every single one of them, not just in their own faces but in the faces of every American seller who ever made a sale and contributed to it's reputation for being a fun, interactive, social, marketplace during the days of vast growth aka it's hay day.

The moment eBay started slamming doors, making decisions based on bad intel and opening small windows with limited opportunity to stay relevent in the future as opposed to the moment, that was the moment Amazon seized to crush the whole e-commerce industry... and they did it by not thinking about immediate profits.  They invested in their future, unlike eBay who seems to have the microwave generaltion mindset of "get it now".

[needleinahaystack714714]

Anyone even suggesting this sort of a merger has never been on the Etsy boards.  Etsy buyers and sellers loathe eBay.  The mere mention that you sell on eBay will get dramtic reactions from posters.  Most of them will get the vapors and have to curl up in the fetal position in their "safe zone" and play with a puppy while getting a massage.

eBay's aquisition of Etsy would clear Etsy out like a broken hornet's nest at a wedding reception.

[needleinahaystack714714]

---

@garmentvarmint2014 wrote:

kristen...

wELL  FOR  the sake of  Esty  sellers,  I   would hate  to   see  the merger  you  are  talking about.  Ebay is i  already  badly managed.    I  can just imagine the kind of  harm they   would  wind up  doing to  Esty. 

---

ETSY already has some severe management problems of its own.  Part of that is they have moved most of their legal department and those in charge of CS decision making to Ireland.  I have nothing against the Irish since I'm a high percentage Irish myself.  My complaint is the culture and the laws are different and Etsy hasn't fingered that out.

Etsy recently tried to impose the EU consumer directive on US based sellers and the Irish lawyers stated they interpreted the laws to be enforceable to US (and non-EU) based sellers.  Some some highlights of the directive:

• Your address, telephone number and email address must be posted in your store
• You are forced to accept any purchase (other than perishables and custom items) back within 14 days of delivery FOR ANY REASON and will refund the entire purchase including the original shipping... Buyer pays return shipping.  This is provided you have the buyer's rights and responsibilities posted in your store.  If you do not have the buyer's rights and responsibilities posted in your store, the buyer has 1 year and 14 days to return the item, FOR ANY REASON.

In an attempt to impose the EU consumer directive on all sellers worldwide, they exposed the private information they pulled from every seller's financial information without their consent.  After numerous threads and an Ina post, Etsy finally pulled down the private breached information, however never did even understand what the big deal was.

Yeah, Etsy has a few problems of their own.

[retrose1]

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.

The ONLY reason Etsy is the size it is today is because ebay ran off the very sellers that made Etsy what it is today.

ebay HAD all of the things that Etsy has - and to tell the truth, they have more options to offer a seller than Etsy, BUT ebay treats it's sellers like last nights fish dinner, great for a meal but they want the leftovers out in the trash because they might stink up the place.

I sold my vintage items on ebay and ebay decided to try and purge me on the first defect sweep that caught about 15,000 sellers in a month.  I managed to hang on but moved my valuables to Etsy and never looked back.  I do very well on Etsy with less fees and fewer problems and 3 times the sales as ebay.

ebay has all the tools to make themselves Etsy, they don't have to buy anything, all they have to do is separate the new sections from the older and crafts and create rules applicable for each set of buyers, AND FOLLOW THEM, and they could beat Etsy in a year.  But as long as they continue to treat their sellers like convicted criminals, then they will never get that back.

But they abandoned what they had for a pie in the sky plan called disruptive innovation in an attempt to be Amazon.  And now almost 10 years later, analysts are picking over the carcass of what used to be one of the biggest powerhouses of the internet.

[victorjunkman55]

Well Written.

[llllady]

Etsy hurt themselves enough when they started letting the cheap Chinese junk flow.  Geez, make a pair of socks in China, and sew a handmade pom-pom on the cuff in the U.S., and it's now hand made.  It's a joke.

I have no horse in that race, but really feel sorry for the true crafters that work hard at their craft, and then have to deal with the Chinese pollution.  One polluted site isn't going to help another polluted site become anything positive.

[retrose1]

---

@llllady wrote:

Etsy hurt themselves enough when they started letting the cheap Chinese junk flow.  Geez, make a pair of socks in China, and sew a handmade pom-pom on the cuff in the U.S., and it's now hand made.  It's a joke.

I have no horse in that race, but really feel sorry for the true crafters that work hard at their craft, and then have to deal with the Chinese pollution.  One polluted site isn't going to help another polluted site become anything positive.

---

Don't feel too sorry for them.  The crafters come up with an idea, have the idea manufactured in China and low and behold, more Chinese pollution on Etsy.  The rule is that the Etsy id control the manufacturing.  Actually you don't have to come up with an idea anymore, just pick a color on some dollar store items send a check and you can be a manufacturer of Chinese goods as they make them for you in that color.

Yes, Etsy sunk when they allowed this to happen, but if Americans would stop buying it, they wouldn't keep making it.

I sell my vintage clothing there.  And because Etsy has divided the site into supplies, 'handmade' and vintage, the vintage categories are not that infested with junk.  The Chinese stuff is all in the handmade section.

[sharingtheland]

Revenue at eBay and Etsy is only the fees they collect on sales.

Ebay's reported gross revenues include StubHub, advertising and whatnot assorted adventures. In the past, gross revenues also included paypal.

I have always, always maintained that it is useless to compare Amazon to ebay, or vice versa.  On that we agree.

[stonevintage]

Lol Why would ebay want to buy into/merge with a sector of it's business that it knowingly drove away (small seller)?

[rixstuff]

I hate to say it but this kind of thing actually helps many of the other sellers on Etsy of true handcrafts or vintage make sales by looking good by comparison.  I see strings of beads that are "bracelets" that you find at he souvenier stores 5 for $1 but the sellers want $50 for them.  Some I think way over pay for beads at the craft store then figure $20 an hour salary and come up with outrageous prices that nobody will pay for the item with cheap plastic beads from China that required ZERO talent and minimal effort to string together (some look like bad kindergarten projects).  And yes many folks overcharge for items that MAY be vintage but not particularly valueable - we have the same problem here where items may be 1950 but if there are thousands of them and yours is in horrific condition, you ARE NOT getting the sale.  But some of us have regular customers.  I supply a couple of vintage clothing stores with jewelry and my aunt has even sold a few items to studios for TV or movies.  I could (and do) sell at community yard sales but I get better prices online with less effort and I can run them all year in all weather.

[the*dog*ate*my*tablecloth]

Hmm if I remember my finance classes correctly, actual share price is pretty much irrelevant on its own without adding in value and other factors. How many shares are there in total? How much of the company do those shares make up? What are the price to earnings ratios? etc.

Not that I'm arguing the relative size of the companies. Ebay is not even really in the same business as Amazon.

[rixstuff]

---

@victorjunkman55 wrote:

LOL With eBay stock around $20 and Amazon $600 a share, This will NEVER happen. Amazon Building new shipping centers in 6 states Including right here in Michigan, 1000's of American Jobs. while eBay ships their jobs overseas to save a buck. eBay may be located in the USA, but is NOT an American Company any more, if you don't believe me, Call 'em. Good luck to you.

---

Sure the customer service center is in the Philipines (and really whose isnt these days) but the rest of the company is DEFINITELY US based and managed. And the CS call center is such a small part of the company! The US offices of Ebay also manage the worldwide operations from San Jose CA.  Ebay has no reason to build shipping centers since EBAY doesnt actually sell anything.

[klassic*kids]

In my opinion etsy has a place when it comes to looking for original items.  I collect and buy original watercolor paintings of butterflies as well as landscapes and cityscapes.  

There are some extremely talented artists on etsy selling exactly what I am looking for.  I search regularly and there is always so much that catches my eye that it can be very difficult deciding which ones to buy.  I also have a couple artists that I follow in particular.

I've looked on ebay and unfortunately what I find here is usually only prints or old originals being sold by someone other than the artists.  The few that are listed by the original artist are just, unfortunately, not done in the same caliber as the ones on etsy.  They are unimpressive.

Last summer on etsy I also bought a t-shirt which the seller monogrammed for me and I was happy with that, but I mostly like etsy for the original art. I don't look around their site for anything else and it is a shame if they are being marred down with Chinese **bleep** as well.  They had a real unique place in the marketplace.  I wonder how a ebay-etsy collaboration would be like.

[liw48]

---

@haute_again wrote:

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.

---

Np no no.  Does EB have a handmade section/category like AMZ did?  If no, Then that's what EB should do.  Set apart a section for only handmades.

But it surely needs something to get people to come to the site.  They used to be THE site people would go to buy online, not anymore.

What the heck are they doing with Half.com?  Are they locked into some infinity contract?  Because they should kill Half or merge it into EB as a separate books & CD section.

[penguins_dont_fly]

No. No. No. And heck no!

This is an awful idea.