STRAIGHT, NO BULL- The real reasons (hint: taxes) why eBay is losing sellers and revenue!

[step_up_your_game]

Here's the staight dope...

AMZ courts large sellers hard. It is hard for eBay to convince large sellers to spend time listing here. It takes a lot longer to list on Ebay, and more often than not the products take longer to sell, and/or they sell for less.

In contrast, AMZ hates the little guy. They don't want Joe Anybody listing the cheap pair of cheap clearance sneakers he found at Kohls, along with a bunch of other random stuff in his garage that he bought to flip. This should be eBay's opening to capitalize.

There are millions of Joes, and their money adds up. The problem is - this is not Joe Anybody's primary source of income. If he's not making at least $500 on every $1500 he sells, it's simply not worth his time. Sure, Joe could decide he's happy with $200 on every $1500 of sales if he can sell 3 times as much, but Joe does not have the time or capital for that. There is a more important factor at play however...

Joe does not want to cross the $20k tax threshold. He has no intention of having to deal with the government for his eBay business. Yes, yes, shame on Joe for his evil deeds here but without getting into the morality of it all, let's just face the music -Joe is probably in the majority of the small sellers regarding obligations to Uncle Sam.

If Joe can sell $18k at $9k profit a year, it's a nice little source of extra income. If Joe does $18k but at only $3k profit, he's making less than minimum wage for his effort. He doesn't want the tax hassle so he won't jist try to sell more to make up for the low margins. 

It seems like eBay is doing whatever thay can to push Joe to sell at a miniscule profit. They tell him his price is too high if he lists it at anything but the lowest. They default his listings to best offer and hide it so he can't tell. He gets rid of the best offer and they automatically enable it again a few days later. Bootleg knockoffs are allowed to flood the site and will not be taken down if they are reported.

Joe decides he's done. EBay lost the large seller money, and now they've lost Joe and millions of other Joes like Joe. eBay decided the Joes weren't giving them enough sales. Now the Joes aren't giving them any sales.

It doesn't matter what eBay does now with short-term sales driving schemes. There is nothing they can do to make more money but convince the Joes to come back. I sincerely hope that this post finds it's way to an exec at eBay and sparks an "aha!" moment. I don't see a lot of hope for the site if things continue the way they are.

Improve the seller and buyer experience, gain membership - more items will be available and sales will grow organically. Otherwise eBay's future may be just a fire-sale acquisition of AMZ. 

[yuzuha]

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@luckythewinnerwrote:

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@yuzuhawrote:
It's not even worth purchasing something to resell unless you can at least double what you spent on it.

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Selling two $500 items per week that you spent $300 on: 

+$525.00 received

- $300.00 item cost

- 25.00 shipping cost

- $52.50 final value fees

- $15.53 PayPal fees

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$131.97 profit per item

x 104 items per year

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$13,724 in profit

That seems worth it for  selling two items a week. 

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If you've got that steady, guaranteed level of sales, then sure.  But if there's one thing I've learned from years in B&M retail, it's that sales are anything but steady or guaranteed, and that's why I personally won't buy anything unless I know that I can mark it up by at least 100%.  200% or more is my typical goal.

In Joe's case, if he's selling $18k but only bringing home $3k in profit, he really needs to rethink his business plan.

[max39666]

reply was for Op so forgive my not paying attention to whom i was posting

[richards*rock*collection]

I think barroom was referring to today, the stock fell 6 points, your right, its going up overall.

[ryanrobyn]

Message says: A site is only as good as their sellers.

I REALLTY think the majority of sellers try very hard.

It might interest you to know that many items have to be cancelled because Ebay does not put the correct number of items left for sale own This happened to me 3x in one month and I had to at defects due to Ebay's mistakes. Also the majority of sellers face unethical buyers all the time who never pay or return items by lying and saying not as described, rturning itms they used and ruined or returning empty boxes.

Also Ebay makes it conditions for sellers almost impossible demanding delivery within an unrealistic timeframe when the PO is not able to do that or makes mistakes.

There are just TOO numerous reasons why!!!

[ryanrobyn]

You might be interesting in knowing that Ebay report to its stockholders an incorrect gross amount by adding on the shipping as total sales

[max39666]

 To Think all those poorl Chinese junk sellers that E bay thinks their name is joe being  hated by this site --very sad indeed!

Improve the seller and  buyer experience--i give a bingo for that for sure- but only for the Honest ones

IMHO--the trust factor is a major concern for sellers as well as buyers--once that is gone it's a uphill climb back to the top.   

[carlmarxx]

Seller's issue's on this site has to do with ebay's made up industry standerds return policy !  which opens  sellers to increase buyer fraud and return abuse .  And lack of no good seller protections .  

[step_up_your_game]

Stock price is not indicative of market share.

% of e-commerce dollars spent:

2016: eBay - 7.8%  AMZ - 38.1%

2017 eBay - 6.8%  AMZ - 43.5%

I might have mispoke however... eBay may or may not actually be losing revenue in terms of dollars. I can't really tell from the bar charts I was looking at, but they are certainly losing share of revenue. That was clear. It's possible that overall online sales are growing at a pace where revenue can increase YoY while their market share is decreasing.

[luckythewinner]

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@yuzuhawrote:

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 In Joe's case, if he's selling $18k but only bringing home $3k in profit, he really needs to rethink his business plan.

Again, you seem to be doubling down on the false idea that your profit percentage determines your hourly wage.

That is simply not true. 

If Joe is putting in 400+ hours to earn that $3k, he is indeed working for less than minumim wage.  

But if Joe is only putting in 100 hours to earn that $3k, he is making $30 an hour - which is a very nice part-time job. (The average worker in the USA earns the equivalent of $22.50 per hour). 

The percentage of sales that is profit has nothing to do with the hourly rate. 

[ted_200]

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@richards*rock*collectionwrote:
I think barroom was referring to today, the stock fell 6 points, your right, its going up overall.

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@thatsallfolkswrote:

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@Anonymouswrote:
Ebay stock is down and falling

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Is it that hard to read a graph?

The graph shows the eBay share price since about 2008... you'd be hard pressed to show ANY stock price graph that isn't going up overall for the last 10 years.  The 10 Yr. S&P 500 chart looks about the same...

@ryanrobynwrote:

Message says: A site is only as good as their sellers.

That might be the ceiling on how good a site can be... but I don't think this site is even close to that good. 

[step_up_your_game]

"The percentage of sales that is profit has nothing to do with the hourly rate."

Absolutely true, and here's why it doesn't matter...

There are way more small items sold than big ticket ones. Also whether Joe is savvy or not because he can't source items that sell for double or triple his cost is irrelevant to the original discussion.

If he was selling at only 50% profit and was ok with the money vs time and now he's pressured to go down to say 20%, he's likely to give up at some point and close shop. He likely doesn't have the sources to consistently make double or more per item or he would have been doing that all along. The point is that when he gets fed up and gives up, eBay loses a seller and all of the commissions that seller brings.

[step_up_your_game]

I mean, yes obviously Joe is a tax evader. I thought that was quite clear.

That's why I specifically mentioned that I was not debating the morality

[step_up_your_game]

I mean, yes obviously Joe is a tax evader. I thought that was quite clear.

That's why I specifically mentioned that I was not addressing the morality of the situation.

The point is that although you're not sad to see sellers like this go, there are likely very many of them. And even though this much reviled segment may ruffle feathers, their sales amount to a tremendous portion of $ lost by eBay when they leave. Who picks up the slack, oh yeah it's the mega-sellers that left to go sell on AMZ. Wait, no that doesn't work. 

So what's the answer? Push more sales from the remaining sellers by promoting a "race to the bottom" and "flea market" mentality. Try to make sure every listing has "best offer" so you have to answer tons of messages and haggle with everybody that wants to buy your gold jewelery at half of scrap value. Because that's what I love to do as a seller.

I get that tax evasion is wrong but it exists and is prevalent and it is a big factor. Because eBay can only hope for future growth from the little guy, it is a big problem for them. That's why they fought the tax issue so hard years ago. Their stategies for getting back and retaining existing small sellers so far has been totally counterproductive. If I could list items as quickly and efficiently here as I do on Amazon and have them sell at similar prices, I'd be apt to list a lot more items even if the amount of sales wasn't as high. Just can't justify the time listing for hours and selling an item once a day maybe.

[timemachine777]

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@auctionpetwrote:
Maybe if sellers would actually fill orders instead of cancelling them, they wouldn't be losing buyers. Both myself and a friend made ebay purchases yesterday, we both had our orders cancelled by the seller. Why should anyone want to waste their time shopping here when sellers pull these stunts!

One seller claimed they couldn't find the item, the other said they were out of stock. Both tried to make it look like the buyer requested cancellation, lie! If sellers can't manage their inventory to fill orders they shouldn't be selling anywhere! This is obviously a widespread problem on ebay when seller order cancellation rate was 100% for me and my friend! It's lousy sellers who chase away the buyers from this site and impact it for the responsible sellers who can actually manage their stock.

A site is only as good as their sellers.

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Probably true. Maybe the item was listed on eBay for so long, that they eventually lost track of where they stored it. Boy...that would bite. Your starving for eBay sales, and you finally get one, and bummmer...you can't remember what box you stored the item in. Not only do you lose that long awaited sale, but you get dinged by eBay, and neg'd by the buyer. Oh, happy day.

[timemachine777]

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@muttlymobwrote:

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@step_up_your_gamewrote:

Joe does not want to cross the $20k tax threshold. He has no intention of having to deal with the government for his eBay business. Yes, yes, shame on Joe for his evil deeds here but without getting into the morality of it all, let's just face the music -Joe is probably in the majority of the small sellers regarding obligations to Uncle Sam.

If Joe can sell $18k at $9k profit a year, it's a nice little source of extra income. If Joe does $18k but at only $3k profit, he's making less than minimum wage for his effort. He doesn't want the tax hassle so he won't jist try to sell more to make up for the low margins.

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Joe might be in for an unpleasant surprise if he doesn't report that income below $20,000.  All income is reportable and potentially taxable. 

$20,000 is part of the requirement for PayPal (or other payment processors) to issue a 1099 to the account holder.  It does not mean that the account holder is not required to report and pay taxes if he does not reach the $20K level for the 1099.

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It all depends on whether or not Joe is filing single or married and also the number of dependents. An next year your standard deductions for most are doubling. That's a lot of non taxable cabbage. The trick is learning how to use all your deductions. I've made boat loads of money and not only, not paid any tax on it, but got lots of money back from credits. 

Some people know tax law better than others. That's why Amazon doesn't pay any taxes, and eBay does.