eBay's Downfall?

[dugoldstuff]

Very interesting article. I bolded /redded the best parts:

https://seekingalpha.com/article/4188922-ebay-stagnation-mode

eBay: In Stagnation Mode

Jul. 21, 2018 3:18 PM ET

eBay's second-quarter earnings report fell heavily short of analyst expectations, with revenue growth dimming to 9% y/y (from 12% y/y last quarter). The company's below-consensus guidance caused the stock to take its biggest hit. GMV growth in the U.S. also showed its weakest growth rate since a year ago, while the volume of sold items stayed flat. Margins also showed a worrying contraction.

Despite all the signals that keep pointing to its demise, eBay (EBAY), the one-time e-commerce wunderkind, continues to plod forward as if it was still a giant of the internet. Like last quarter's earnings release, eBay's Q2 post showed a company that is continually unable to meet analysts' targets as the company fails to accelerate the process of bringing new buyers to its platform.

Rightly so, eBay has been one of the worst-performing of the large-cap internet stocks all year, despite general enthusiasm for the e-commerce space. Companies like Etsy (ETSY) and Stitch Fix (SFIX) that were earlier pegged as losers, for example, have shot up meaningfully in the first half of 2018, as has perpetual giant Amazon.com (AMZN). eBay, however, seems incapable of reversing its slow decline. Year to date, the stock is down nearly 10%.

Yet, I believe the shares have further to fall. Activity on eBay seems to simply be running cold. Call it the hangover effects of eBay's fee hikes in the past several years - as sellers walked out on eBay in protestation of higher seller fees and took their variety of wares with them, buyers also saw less and less reason to buy on eBay. One of the things shoppers like most about Amazon is that it's the "everything store," where you can type in even the most obscure of items and find at least one seller that carries it. On eBay, with both the selection and volume of items getting thinner, it's getting harder and harder to bring buyers to the platform and, more importantly, reverse the steep deceleration in GMV growth.

[hioctane62]

Yes... consumer spending is rising. Yet ebay's growth is stagnant. Refute that.

[lloydsteventaylor]

Ebay is trying to make itself into an Amazon clone and at the same time hold onto what its roots are. i.e. used and vintage. it will not work as those are two separate businesses and should be operated as two separate business models. Ebay should divide itself. (I agree on the catalog comments 100%)

[everything-from-trinkets-to-treasures]

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@hioctane62 wrote:

Yes... consumer spending is rising. Yet ebay's growth is stagnant. Refute that.

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ALready did as has the consumer spending reports....people are not spending on what they used to like before.
And sales on ebay are still only down for some...not all.  There were even just news reports about how some ebay sellers have broken 1 million in sales and that was just recently. You can google that too.

[everything-from-trinkets-to-treasures]

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@everything-from-trinkets-to-treasures wrote:

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@hioctane62 wrote:

Yes... consumer spending is rising. Yet ebay's growth is stagnant. Refute that.

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ALready did as has the consumer spending reports....people are not spending on what they used to like before.
And sales on ebay are still only down for some...not all.  There were even just news reports about how some ebay sellers have broken 1 million in sales and that was just recently. You can google that too.

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ANd BTW...the whole stagnant thing...was part of the OPINION from the article and NOT something shared by all the anyalysts either. They all have OPINIONS and speculations...not the same as facts.
ANd you are taking bits and pieces and opinions and trying to use them and make them fit and calling them facts....it doesn't ever work.

[hioctane62]

Another hide and seek source. How unexpected.

[hioctane62]

ALready did as has the consumer spending reports....people are not spending on what they used to like before.
And sales on ebay are still only down for some...not all.  There were even just news reports about how some ebay sellers have broken 1 million in sales and that was just recently. You can google that too.

ANd you are taking bits and pieces and opinions and trying to use them and make them fit and calling them facts....it doesn't ever work.

Pot/kettle?

[zamo-zuan]

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@sharingtheland wrote:

I disagree with one part; I think ebay is the every thing store but buyers just can't find the things.

In other words, the writer did not know how asshatted search has become, which has led to slow demise.

All the other points, I agree.  

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I believe this is the main issue, combined with the fact that it is becoming less and less of an ideal place for sellers.

EBay was our primary marketplace for years. We were #1 in our category for 4-5+ years. EBay managers visited us due to our performance and told us we were one of their best sellers and they wanted to support us, as we helped make eBay what it is. Because of this, we focused 100% on eBay, rather than focusing on other marketplaces.

Then 2018 came with their new changes. Now, we have been struggling. Our staff has lost about half its employees - GOOD employees that did not DESERVE to be let go, but the cash flow simply was not there.

In our category, only one seller performed notably better, and that one seller did NOT follow best practices at all. Very unfair that they thrived, while we took a monetary loss in order to offer things like GD and Free Returns, only to see ourselves plummet while that one other seller thrived.

If we look at our category on Terapeak, top sellers used to have 40% market value. This year, top sellers are 32%. This means nearly every seller truly serious about eBay has LOST MONEY in the last year. Nearly 25% total.

If top sellers are not able to survive, how can they expect to have a thriving marketplace? You need thriving sellers, in order to have a thriving marketplace!!!

Sellers are NOT thriving right now! Sellers are SUFFERING!!!

[carlmarxx]

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@retrose1 wrote:

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@hillbillymedia wrote:

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@futuretomorrow wrote:

@hillbillymedia

Good point. The one in my area is closing and may have already closed but I haven't been to that location in a few weeks. When I did last pop in there, the good stuff was long gone and it was clear as day (by all the signs and shelves) they were closing that location, not reorganizing. 

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It`s a shame. Kmart was one of the few that had the chance to compete with Wal-Mart and they are fading. Sure, there are still other competitiors but many of them are fading as well. I was rooting Kmart.

I`d love for ebay to suceed again. I just don`t see it though with the decisions they are making. Maybe they will turn it around but I don`t see it as happening if they continue to abandon their used/vintage base. I think they should embarce it again and run with it.

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Back in the 90s, I watched what Target was doing and what KMart wasn't  and knew that KMart was doomed.  They used to be across the street from each other in our neighborhood, now KMart is gone from our city and the Target built their own 3 new locations in the high shopping districts.

I am a used and vintage seller and see ebay's complete dedication to getting a catalog up and running as a sign that ebay totally does not understand where their strength lies and how to make it successful again.

Catalog implies new, and for ebay's catalog to succeed ebay should segregate the new merchandise from the used/vintage/antique and only apply catalog to the new and leave the other categories to the old school ebay way of search.  I feel that if ebay had done that a year ago, their catalog would be finished and up to date instead of a blue coming to beg for more unpaid help getting it done.

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I was amazed that blue  had top listed items  of retail buyer fraud .     

[sandmansales]

I would love to see ebay fail and be replaced by a company who is genuine, who cares about all of it's customers, not just half and who displays some sense of loyalty to their roots. A company who innovates and has their own identity, not one who strives to be exactly like someone else and copies every johnny-come-lately trend. A company who doesn't try to reinvent themselves every quarter and who after 21 years still doesn't know who they are or how to fix it. A company who has a moral compass and abides by it, not just corporate speak that is meaningless. A company who handles their glitches before rolling out new things. A company who is smart enough to thrive in one of the longest bull market's in history instead of actually losing market share.

ebay deserves to fail. Their current net income is in spite of ebay, not because of it. If it wasn't for ebay management dating back to 2008 to present, there's no telling where ebay would be today. 2, 3, 4 times better than they are now both financially and in reputation.

I dream of the day when I open the news and read that this abusive company is dead and has been replaced by a new innovative morally sound tech giant. A company who would be happy to hire the ebay employees out on the street.

And who knows, maybe it's going to happen sooner than later. ebay's new money grabs (4% additional fee for fake SNADS) and rolling out a product catalog for used items IMO is going to kill a large percentage of sellers here. Sellers have a line too and I suspect it's going to be crossed for many within the next year.

[kathieskorner]

Catalog implies new, and for ebay's catalog to succeed ebay should segregate the new merchandise from the used/vintage/antique and only apply catalog to the new and leave the other categories to the old school ebay way of search.  I feel that if ebay had done that a year ago, their catalog would be finished and up to date instead of a blue coming to beg for more unpaid help getting it done.

The fact that ebay has never considered splitting used-vintage from the new through the years as well as all the resources they have spent on a "catalog" is indicative of management's failure to understand much of their buyer base and their place in the ecommerce marketplace.   If they cannot create a functioning search engine, why would they be able to create a catalog that is worth all the money spent in creating it???  

[futuretomorrow]

@retrose1

I can't remember if it was you that I saw suggest the separation of new items from used/vintage/antique before, maybe in another thread but I thought it was interesting and something eBay should have considered a while ago. This would have greatly reduced the cognitive load/Hick's Law for both user groups. When they introduced the GSP would have been an excellent time to have done this but I believe it should have gone further with eBay considering actually having their own warehouses and products. This would have more organically made them a competitor against Amazon and others.

This is all easier said than done and I feel now eBay is so far behind other e-commerce destinations that it would take a huge amount of capital to make this happen. It's one of those areas I'd like to see eBay still prove me and others wrong if they're serious about course correcting but I just can't wrap my head around where that capital would come from at this point.

[ebbyisme]

 seems as the path our society has taken where some only consider evidence that supports their position applies to this thread..... in some cases....

You have two sets of "expert" opinions, and the experts and investors "opinions" do matter because it affects stock prices,

1. On one hand you have the "BUY" eBay stock experts and they cite reasons such as the changes will work, the stock price has corrected and is at the proper level now and eBay shows great profit*. (We will come back to the profit later, as well as revenue.)

2. The other side says the changes are not working or working quickly enough, eBay growth lags behind industry averages and peers and has for some time, and stock prices are weak.

Both sides ignore the internal working we see in using the site and we lack the internals corporate sees. So you have to try to piece everything together with limited information.

Back to profits -  I would LOVE to know what part of the increase in profits/revenue is from new revenue sources not directly the result of more sales? Such as higher fees, more stores subscriptions, return of 10% TRS+ bonus and the higher store fees with the shipping supply coupon.... because the higher fee with the shipping supple coupon adds revenue to two columns, it is almost like counting the same money twice as far as gross revenue and total sales are concerned.... but also counting the coupons as a business expense without really spending any money, the shipping supplies program is a great idea, but the growth from it is not totally accurate and hides the true health of the company and sales numbers. All these things do provide an increase in profit and revenue but not really an increase in user activity,  growth or health of the site..... actually it could be argued all these things are proof the site is having issues, or increased growth and sales would be natural from an increase in buyers purchasing items.

Also I just read an article where Wenig said new customer activity was right on track with what they expect but current user transaction conversion is down.... not sure what that means or even if it is important... but in Disruptive Innovation it says you may have to change customers, employees, suppliers and he also warned stockholders over a year ago there would be a period of weakness (as DI predicts) before growth exploded..... so I don't expect changes unless shareholders start screaming because it can be argued this was expected when they started DI.

[kathieskorner]

You are right - the time has passed for such a split.  It should have been done years ago shortly after the ebay motors split.  

Capital is only half the problem - they just have never had the technological expertise to do it as evidenced by all the technical glitches that have occurred on a regular basis year after year. 

[retrose1]

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@futuretomorrow wrote:

@retrose1

I can't remember if it was you that I saw suggest the separation of new items from used/vintage/antique before, maybe in another thread but I thought it was interesting and something eBay should have considered a while ago. This would have greatly reduced the cognitive load/Hick's Law for both user groups. When they introduced the GSP would have been an excellent time to have done this but I believe it should have gone further with eBay considering actually having their own warehouses and products. This would have more organically made them a competitor against Amazon and others.

This is all easier said than done and I feel now eBay is so far behind other e-commerce destinations that it would take a huge amount of capital to make this happen. It's one of those areas I'd like to see eBay still prove me and others wrong if they're serious about course correcting but I just can't wrap my head around where that capital would come from at this point.

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I have been suggesting that ebay divide for years now, back when Live World was running the boards and maybe a couple of years after ebay Express was shut down because of poor promotion.

I don't believe that it would take a lot of work and money to seperate new from used.  ebay had ebay Express up and running.   All they need is to pull out the program,  dust it off, make the upgraded changes and then plug in the catalog and then promote it.   Maybe change the name to not imply the failure it once was but I think Express is a good name for new stuff sold with free shipping and all sorts of guarantees.

ebay Motors works with different rules, Express could, too.  But I think that ebay knows that if they do segregate new from used - the Express side will not do well because it will have nothing to draw buyers, since it is offering the same stuff 75% of the other sites on the net are offering with better deals.  And that failure would not look good for ebay, who has spent the past 15 years banking on new merchandise as their future.

[castlemagicmemories]

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@carlmarxx wrote:

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@futuretomorrow wrote:

@everything-from-trinkets-to-treasures

I guess you didn't understand what I meant so I'll clarify. I'm not talking about a browser session where you can set the default search engine. What is new and I know for a fact you don't have access to is that buyers are on Amazon already and using their search in place of Google. That's how powerful Amazon is.

No one does this with eBay nor is it something I'm personally going to debate with anyone and have a continued back and forth over unless they're a data analyst and want to have a sidebar to not derail the threads main intent but please bring verifiable data to said discussion.

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I would like ebay  to stay with what got them to the mountain top to begain with ,It was never brand new items , and get away from buyer first policys  .Also  they need to get people that have worked in the retail indusry  And don't see their sellers as crooks to scam buyers.  They need to give sellers equal protections. and remove the MBG that is it's current form ! and get a new buyer  protection policy that doesn't  include  Snads , On the fact that ebay should never gotten involved in snad disputes  to begain with. 

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I agree with your first statement, with a bit of a modification.  I don't think either new or old should be favored to the exclusion of the other.  Having said that, I favor vintage, used, however you choose to define it.  But there are times when I need to buy new so it is good that that is here as well.  It only makes sense to have both to increase sales.

I disagree with your statement that new buyer protection should not include SNADs.  There is an extremely high rate of SNADs, TRUE SNADS, that has been well documented on these Boards both by buyers and sellers.  

This is a thread currently on the  Buying Board.

https://community.ebay.com/t5/Bidding-Buying/Is-it-JUST-me-2018-WORST-year-for-buying-YET/m-p/287697...

This is a thread from Dec by well known regular Board posters who are mainly SELLERS; it details the high rate of true SNADS they received and the horrendous customer service that ensue.  Many have long years and a loyalty to Ebay, but that was severely strained and in some cases, broken by these experiences.

https://community.ebay.com/t5/Archive-Selling/I-m-beginning-to-see-what-buyers-contend-with/m-p/2785...

The MBG for SNAD protection is essential especially due to the very high rate of SNADS that occur.  There have been numerous posts by sellers that experienced this in recent months.