ebay "can't keep increasing their take rate without eventually reducing sales and seller quality".

[isaiah53-57]

Here is a very interesting opinion article discussing ebays viability as an investment grade stock - The author denotes the entity as a "Value Trap" since on the surface it appears to be undervalued and has at least put forth a strategy to get the company back on track - but due to its current and past stagnant or declining growth; the unprecedented loss in year-over-year active buyers from 185 million to 137 million; and the unsustainable trend of monetizing the site through higher rate take, the company's current trends are cause for caution.

https://seekingalpha.com/article/4539902-ebay-stock-value-trap-poor-growth

An interesting quote for sellers taken from the article:

"....profitability gains are largely from increases in take rate. The company is increasing its cut of transaction revenue to compensate for lower gross merchandise volume and declining user numbers.

Yes, this may boost financial performance in the short term. But I don't think this is a sustainable strategy. The company can't just keep increasing their take rate without eventually reducing sales and seller quality."

Essentially postulating that it will cost you more to sell less on the site - an unsustainable strategy - I can only wonder when the people who run the show will do something BOLD that will create a stir to regain a market share foothold and be beneficial and sustainable for ALL? It seems to me thats what needs to happen at this point.

[chapeau-noir]

@ittybitnot  I do remember one report eBay submitted that said their loss was because there were no products such as the "fidget spinners" that quarter. 

I remember that, too.  What they had actually said, though, was they had made a big mistake on banking on things like fidget spinners - cheap, short-term fads, and this is what got them looking at higher value.  I recall being a little bemused that they had done this to begin with.

General post:  What Jamie wants to do, I think, is narrow ebay's focus to higher value, and they're doing that with verticals and a push for 'high value buyers' - 'high value buyers' being those who spend a certain aggregate amount.  That means they might buy $800 worth of $10 shirts, but they still spend $800, but mostly they are regularly returning buyers.  Of course, there are their spendy and/or faddy verticals - they're going all-in on that by buying companies and bolting them onto the site or attempting to integrate them.  So they have a smaller market share, but a richer one.

I'm one of those little sellers, but do not feel as if they're trying to turf me out.  They could improve their look-back for seller metrics, though - the tranche between one year and 3 months is too wide.

[rugerskick]

Their quarterly reports show that is what is going on.

[theteamsetguy]

You have to price in the fees and make your buyer pay for them.  The bury the 30 cent fee, 12.9% on shipping, foreign transaction fee, supplies, and taxes in my shipping and handling fee. According to Pirateship my average domestic shipping label cost me $3.76 and I collect on average $5.18 per order. My buyers buy an average of a little over 4 items at a time.

[dbfolks166mt]

@dbfolks166mt  I will admit the promoted listings was a BRILLIANT idea that increased revenues and put the onus on the sellers back regarding whether to utilize it or not. It keeps eBay from looking like the bad guy which they would have been had they simply raised the standard fee structure. 

I would qualify 'brilliant idea' to 'brilliant stopgap' - it still doesn't resolve the essential problem of a shrinking market share.  It continues the revenue flow for the shareholders, yes.  Better optics, yes, but only internally - were I a shareholder, I might question exactly where eBay is going with this.

Agree with @my-cottage-books-and-antiques  that the jury is still out on the verticals idea. 

     Totally agree and as with any business it's a constantly changing environment that a company must strive to adapt to. Not so sure of the future of PL and whether it remains a stop gap or it continues to result in increased revenue for eBay. I talked several times about the prisoners dilemma, the prisoners in this case being the sellers using PL. Lots of people mentioned the decrease in GMV, reductions in active buyers and sellers but interestingly enough despite this eBay's gross revenues continued to grow. The have not drastically increased their fee schedule as far as the standard fees that are applied so the additional revenue is coming from somewhere. 

[dbfolks166mt]

I'm not sure how we are debating whether the percentage of profit take coming from ebay fees are important - I say they are - you say they arent -  Just different perspectives in how you look at things. 

I know they are important to me, but everything else aside, what makes them important in your case, is you can only adjust price so many times in reaction to increased fees/costs before your item become price-inflated and you get shook out of the market - the importance of cost/percentage of fees should carry more weight with you I think..  Again different way of looking at things but as far as adjusting that is the case with every seller that posts on eBay at least those looking to make a profit. There are also adjustments I can make internally like reducing my COGS although this is getting tougher than it used to be. A lot of estate sales have gone to online auctions and there a quite a number of consignment auction houses in my area that people are using quite frequently. 

The ripple effect goes deeper - if everyone in reaction to increased fees/costs keep "adjusting" to compensate, the site will become full of over-priced items... Then you can adjust, adapt, molt, or whatever you may want to call it, to no avail... I think we are a ways down that road right now... the percentages would matter more then I'm sure... O we may be quite a ways down that road which is one reason I started diversifying across multiple forums long ago. I do watch percentages but only as it applies to an expense out of my gross revenue. Again simply a different way of looking at things. 

[chapeau-noir]

They're deriving their increased revenue mostly from advertising.  Maybe they're just plugging the dike until they can get their verticals more established, or re-imagine more tech future, but if they keep having to rely on ever-increasing ad spend by sellers for accelerating profits, then it's a zero-sum game as far as I can see.

[epsilon_publishing]

Please delete this post

[kh-vince]

Hi everyone,

Due to the age of this thread, it has been closed to further replies. Please feel free to start a new thread if you wish to continue to discuss this topic.

Thank you for understanding.