EBay Wants to be Seen as the Merchant

[labbypaws]

www.ecommercebytes.com/C/abblog/blog.pl?/pl/2018/8/1534378157.html

[chapeaunoir]

I've been seeing this coming and I'm not surprised - since I sell in the media and electronics/parts sections I've had this hit me first. So far I'm OK because I sell used items. As usual they're going to try to do it on the backs of the sellers instead of actually doing product fulfillment themselves and actually learning something about merchandising.

If we're lucky, the little reseller/used junk peddlers like myself will simply be overlooked in this brave new world and continue kind of underground, or our listings could be masked. Dunno.

[val2525]

Interesting comment on todays stock buyback.

[chapeaunoir]

It keeps happening.

[somany]

"' 'The goal is to let the buyer trust the platform rather than the seller.'

This is already a problem for eBay right now. Most people do not trust eBay. I realize they would have everyone think that it's the SELLERS who are the problems with eBay. However it is simply not the case. If it weren't for the individual sellers, eBay would be nothing. Put simply, if sellers operated in the same fashion as eBay, they are eliminated from search and forced off the site. "

Bwahahahahaha
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I don't have a problem with ebay's goal, just the execution.  ebay, you want to be like Amazon? 

Stop trying to set prices--let the marketplace set them.  If we have to absorb returns, we need the margin to be able to do so.  

You want returns to be offered across the platform?  Take responsibility for them (as Amazon does).  Stop abuse of the system in its tracks.  

Decide once and for all if you want to continue to market pre-owned clothing.  Stop treating it as the red headed stepchild or get rid of it.  If you decide to keep it, improve search as in don't manipulate it and let the buyer decide if they want to see pre-owned items or not.  Also let them see all the items not just the ones you think they want to see.  

Stop allowing sellers to drop ship from Amazon whereby I get the item I ordered in an Amazon box.  Why should I come back to ebay when I can go straight to Amazon the next time?  I would provide copies of packing slip to show fulfillment by Amazon if you'd do something about it.  

I'm sure there's more but that's all I got right now.  

IMHO life as a seller would be a lot smoother if we didn't have to interact with the buyers.  
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ETA, I came across The Motley Fool write up re second quarter results.  For your reading pleasure:

"eBay's (NASDAQ:EBAY) second quarter results disappointed investors, with the stock down over 10% since the release.



While there were some positive developments, including strong earnings growth and an increase in gross merchandise volume (GMV), investors were more focused on the negatives of weak customer engagement trends and failure of eBay's recent marketing efforts to bring in new buyers to the marketplace segment.

User engagement weakens

A key measure of eBay's customer engagement is active buyer growth, which decelerated to 3% when leaving out the three million additional users from the Giosis acquisition completed in the quarter. That's a significant deceleration over the year ago quarter's 5% growth rate.



Management blamed the decline on a surge last year of new customers buying low-priced fidget spinners. Sometimes companies deal with difficult year-over-year comparisons, and that is understandable. But the deceleration also revealed a weakness in eBay's efforts to attract new loyal customers. CFO Scott Schenkel said, regarding the spike in new customers last year, "We have not retained those new buyers to the extent that we have in the past."



Struggling to attract new buyers

eBay has increased its marketing spending in the last few quarters in order to bring in new shoppers and reignite its active buyer growth that was growing as much as 10% at the end 2014.



In the first six months of 2018, sales and marketing expense has increased 16% year over year, while revenue has only grown 9%. This increase, coupled with other increases in product development expense and overhead has caused operating profit to decline 4.1% so far this year. It's clear eBay is not getting the return on investment from marketing that it needs.



Speaking about their marketing efforts, CEO Devin Wenig said, "While our brand campaign has been well-regarded externally, it's not yet materially moved the needle on consideration, which is key to driving new buyer acquisition."



eBay's recent "Fill Your Cart with Color" campaign was an attempt to detach its brand from the garage sale style shopping experience of years past to a place consumers can find top brands.

One positive

On the positive side, Wenig explained that they are seeing "good performance" of new buyers that come to eBay and experience their new product pages that have been reworked through what management calls "structured data."



This initiative is making product listings in the marketplace easier to find and also makes the marketplace a more visually appealing place to shop. Management attributes GMV growth from 5% in the first quarter of 2017 to 7% this year to the new product experience, which has led to revenue accelerating from mid-single digits at this time last year to 9% in the second quarter.



So far, product categories representing just 3% of GMV have undergone the structured data treatment, which means as this gets rolled out throughout the marketplace, there could be further gains in GMV growth, as more buyers gravitate to more premium items that sell at higher prices.



More work to do

But there's still the problem of attracting those new active buyers. Accompanying the deceleration in active buyers has been a deceleration in the number of items sold in the marketplace, which was flat in the second quarter. There's only so much GMV (and revenue) will grow without corresponding improvements in these crucial metrics.



The focus on new product experiences dovetails with management's effort to rebrand eBay through marketing, which seems necessary to make eBay a consistently growing company over the long term. Wenig said they will "market aggressively" in the second half of the year in order to bring in more new buyers. It remains to be seen whether this will improve eBay's top line growth to the extent investors were expecting going into the year."

I don't think it's very smart to focus on the new buyer growth as that is only one piece of it.  When leadership starts worrying about how that number is going to look, they start making decisions to impact the statistic, and those decisions may not be the best thing for the business overall.  JMVHO.  

[Deleted]

The only way they're going to get "trust in the platform" is by creating continuity among sellers. They're working in that direction, but there's issues. I can look at the same (or similar) sweater from various sellers and the shipping time is different, the return policy is different, and the shipping price is different. That can make it confusing to new buyers. Why should a buyer have to figure out all these different policies on a generic item? If you get into expensive industrial or motors items, then yes - there's going to be a difference. But a $20 sweater?

Their biggest problem is there is minimal buyer retention, and they cannot attract new ones. There are so many different venues to purchase from - Amazon, Instagram, FB Market, CL, etc.. there is nothing special about Ebay. They have a complete identity crisis - they want to be Amazon, but Amazon left them in the dust years ago.

Their marketing and advertising is horrible. The only time I really knew about their commercials is when I heard about them on here. Otherwise they were pretty blah... The whole fill your box with color thing was cute for about a minute. As a buyer I don't give a crap what color box my item comes in. I prefer the discreet brown box anyway - even though live rural and I don't have to worry about porch pirates. Why is Ebay so against any real advertising? There was a commercial for The Real Real that got my attention. My first thought - Ebay has been around for 20 years and they still can't get a commercial to catch peoples attention.

[chapeaunoir]

I agree with everything you say about the crisis in direction, but the day eBay price fixes and forces me into 'buy box' for my used goods, then I'm done, because it will have already failed - it simply can't be done because of reasons of condition, etc. Independence as a seller is why I'm there, and there's no way to regulate used goods in any meaningful sense. They do not own these goods - that's the huge thing people forget - ebay sells nothing. 

eBay will try, though - the site is having an identity crisis and I agree if they want to mask the sellers and become the MoR, I think Wenig wouldn't mind just letting the used market go. It would hurt the site, though he doesn't seem to think so. I know in the clothing area a lot of the used stuff is dreck with bad photos, tatty mart items, etc., but a lot isn't. But the other areas where I sell - you can't get the items anywhere else but on eBay, and I'm just one of millions.  

So, they'll have to make a choice. Go for the Amazon-lite thing, get rid of used and turn eBay into a jaded version of Overstock.com, or get someone at the helm with real vision who realizes that ebay is not Amazon. I'm betting on the first.

[Deleted]

Being the dinosaur that I am, I'm loathe to change my ways. But it's becoming increasingly apparent that I will have to try new things and new venues. The thought of which I hate. But it's adapt or die time. Dang it. I was happy going along with the way eBay used to be. This past year with eBay has been horrendous. Two full time jobs (and my little eBay store) and we are still struggling. Now I've got two kids in college, so the need to make some sort of move is even more dire.

[chapeaunoir]

Etailing has evolved no matter what - it can't not. Ebay is in a tough spot because it'll never be the success Amazon is (it missed the boat on that ages ago), but continuing as a purveyor of used goods and a marketplace for small sellers may not have a lot of growth potential. Not with the kind of competition there is now.

Amazon has made the right decisions on going where it wants to go, eBay hasn't because its been plagued with poor leadership. Bezos continues to lead the company he founded so his vision (such as it is) remains intact - that's really important. eBay lost its founder at a critical time - this series of Bain rejects and rent-a-CEOs has been uninspiring - and the sad thing is, they have no reason whatsoever to fix anything. Instead of being busted and fired, they get let off with their golden parachute and go off to some meaningless C-suite position on some board or other.

[chapeaunoir]

I'm thinking, though, that a lot remains to be seen. So far the product catalog (which in itself I think is a good idea, but who knows if it'll be implemented well or not, at least they're taking time over it) won't affect many people in our sector, and all of the hoop-la over NEW NEW NEW! And Wenig's apparent dislike of the pre-owned sector hasn't stifled us completely - I think it's plain competition doing that if it's happening at all. I know I still have people coming to my stores to find something they can't find anywhere else - just got a couple of notes from a wonderful happy customer who said he had been hoping to find a certain brand of US-made hiking bag as he had been using his for over 30 years and wanted one for biking - he looked on eBay and there I was, carrying that bag. Couldn't find it anywhere else.

I doubt something like that would ever penetrate the gated-community mindset of Wenig, but it's one of eBay's greatest strengths - no one else, really, has that.