Is the Strategy To Charge Us More For Growth?

[davewearsredsox]

This article is courtesy of the Motley Fool and from November 2018... I believe the article explains Ebay's direction as the article is from about 120 days ago. Last year ebay failed to make its commitment to wall street and reported lower growth and profits -  So if you wonder why GTC is MANDATORY and why the push for PROMOTED LISTINGS - When trying to understand reasons for change, often it is best to follow the money...

OPERATIONAL MARGIN EXPANSION = MAKING A GREATER PROFIT PER USER

CHANGE THE MIX IN CUSTOMERS = Sellers are the customers - What does changing the mix mean? - GTC will answer this call.

When eBay did release third-quarter results on Oct. 30, it revealed a shift in strategy to focus marketing more on acquiring new buyers while reducing overall spending as it fosters its budding payments and advertising platforms.

EBay CEO Devin Wenig added:

We expect that this will result in slower growth for a period of time as we grow our user base and change the mix of customers. However, this will also allow us to deliver strong earnings growth over this period of time through operational margin expansion and ongoing aggressive capital return, while positioning the business for stronger growth in 2020, as payments and advertising continue to ramp. 

[tkinnebrew]

Somewhere there must be numbers to back up the madness.

[gramophone-georg]

Of course sellers will pay for growth. What do you think the higher fee rate they are working so hard to slam sellers into is for? eBay has treated sellers like an open checkbook for a decade.

[weschurch]

Simple really.

Ebay has given up producing income from actual sales, because they are constantly declining. They have now shifted to collecting more on the listing end (see GTC) using the "ALLURE" of what Ebay used to be. 

They can't grow profit from shrinking sales so they will try to grow them from hoping you will buy into the "get rich, work from your pajamas" scheme that actually hasn't worked for many for the last decade.

[mam98031]

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@weschurch wrote:

Simple really.

Ebay has given up producing income from actual sales, because they are constantly declining. They have now shifted to collecting more on the listing end (see GTC) using the "ALLURE" of what Ebay used to be. 

They can't grow profit from shrinking sales so they will try to grow them from hoping you will buy into the "get rich, work from your pajamas" scheme that actually hasn't worked for many for the last decade.

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Are these your opinions or do you have something that supports this.

[spittser]

The problem with Wenig and other so called experts using known business strategies to stimulated growth is they seem to not comprehend their own business model. You can't compare eBay to any other business but they are still throwing ideas at a wall and hoping they stick. eBay owns no inventory. Every seller can pick up and remove everything they have listed on eBay at anytime or list and sell the same inventory on multiple venues at the same time. There is no past business model to compare this to. Add to that the fact that every seller is also potentially a buyer and every time eBay implements some extreme disruptive change, they are effectively cutting their own throat. When a seller quits selling, most of the time they will also quit buying. That also will usually include bad PR through word of mouth and the seller's family and friends will also quit buying on eBay. I've never heard of a company being so self destructive. I keep waiting and hoping that someone in a position of influence will come to their senses but I've pretty much given up hope. All I can say is "diversify fellow sellers". There are plenty of other options out there. No need to leave eBay, just expand and use as many venues as you can at the same time. Just remember, your business is still your business and no matter how much eBay will try to micromanage this venue, you ultimately still have control. You own the inventory!

[davewearsredsox]

spittser - You nailed it.... You need to control your own destiny.

I am changing my 2019 business plan to rely less on EBAY. With this new GTC change, I now expect to do less in sales but hopefully more than the last 14 days that have been very slow for me. I am particularly focusing on sites that will allow you to import your items from Ebay to there site. At a bare minimum, I think all of us need 1 as protection and insurance that you do not loose any of your work posting.

I also plan on doing much more with social media that has treated me well. The fee's are one time and the reach is impressive!