@slati_2013 wrote:
Seems all their growth and money is coming from Promoted Listings and advertisements they run on eBay. The problem is those advertisements undercut their own sellers, while the Promoted Listings is just another way to increase their FVF. It seems now if you want to sell, Promoted Listings or running ads is the way to go.
eBay's profits are coming from much more than Promoted Listings and ads ... it is multi-faceted, and clearly eBay's focus over the last year is figuring out new ways to squeeze profits from the existing platform rather than growing the platform (like other selling sites)
I wrote this in another thread:
Over the last year, eBay has done many things to increase their profits:
- Forced TRS sellers to have free returns or lose 10% refund of final value fees ... many sellers don't do this so this increases eBay's profits.
- Many more ads on listings to take buyers off-site for their purchases ... every click is profit for eBay.
- Promoted listings have been a huge profit center for eBay. I imagine that this is perhaps their largest source of new profits.
- Streamlined the returns process, and made customer service reps inflexible. This creates fewer calls into customer service, and more profit.
- Reduced the time-lines for sellers to respond to returns, meaning many more instances where eBay "steps in" and forces refund. Every time this happens, eBay will not refund Final Value Fees. More profit.
- Allowed sellers with Free Return Shipping to do partial refunds. Final Value Fees for these partial refunds are not refundable. More profit.
- Laid off a lot of employees. More profit.
- Raised fees and cut their expenditures for eBay Open. More profit.
- Installed service metrics that penalize certain sellers with 14% final value fees rather than 10% final value fees. Yep. More profit.
- Increased subscription rates for eBay stores. More profit.
- Raised final value fees for Books, Movies and DVDs from 10% to 12%. More profit.
- With managed payments (eBay takes payment rather than PayPal), eBay is taking transaction profits away from PayPal. More profit.
Whew. And that's all I can think of off the top of my head ... and I'm pretty sure this is all in the last 12 months (maybe 18 months). As you can imagine, eBay is milking seller's profits in order to increase their own profits. With this strategy, eBay doesn't need for the platform to increase sales in order for profits to increase - they simply are taking a larger portion of the seller's profits.
