Big News from eBay Q1 Earnings Call

by: ebayout

ebay stock fell to $39.20 after the bell.
Wonder how the kool-aid tastes now to the yahoos who paid $46.99.

by: FidoMaster

My notes:

• When you’re talking $2.6B figures, missing a revenue target by $10M is akin to a sales rep missing a $26,000 sales target by only $100.  “Close but no cigar.” “Horseshoes and hand grenades.”

I can imagine Wenig running down the hallways during March’s last sitewide buyer coupon instructing his minions to call, Facebook, Tweet, and send smoke signals to friends and family to buy something, anything on eBay!  Also throw another announcement out on the wire!

• ECB broke the news on Target dumping eBay, and as far as I know was the only ecom news site I know of that reported it.  Huge scoop! And…

• … When Dae Lee from JP Morgan asked Wenig about Target “potentially pulling out of eBay” (no no Dae, not “potentially”… they DONE DID IT!  Dumped ‘em and pulled out!  Buh-bye!  #MorningAfter (Hi Dae!  /waves)…

• …. Wenig not only got defensive, he got a bit testy, indignant, and irritated. Too funny!

• Wenig dropped a lot of the silly eBay jargon this time around.  As much as he touted promoted listings, he didn’t blather on and on about how much “surface area” they were going to shoehorn promoted listings into this time.

• On promoted listings, Wenig said 200k sellers advertised 130 million items a 200% YoY revenue increase.  One can see where this is headed...

• Wenig gave the “we don’t compete with our sellers” rah-rah spiel that he and Griff are so fond of giving at every possible opportunity. (I picture Wenig and Griff practicing this like SNL cheerleaders Will Ferrell and Cheri Oteri and giving each other facials afterwards).

Time will show with more clarity what complete BS this statement truly is and that it’s nothing more than a semantic technicality.

Also, there were a few technical issues getting analysts on the line during the call for the Q&A session, and eBay published a non-working link about an hour ahead of the call (no idea if the glitches were related or how much eBay engineering or product team was involved).

by: Whatever

well we will see what we see won't we?  big box retailers were always going to leave ebay - we all knew that so target leaving was no surprise,  as usual there still is no details in the payment processing scheme. we are still in the dark. heres what i know - when the money is in my hand the product gets shipped. I have a feeling this is really gonna screw up the fast shipping idea

by: eXtinctBay

Wonder if these 200K sellers who use Promoted Listings are actually paying for them, or just TRS+ sellers spending the $30 in monthly ''free'' listings?

In my opinion, there will not be a great deal of participation in the Free Returns program. Soon the number of Top-Rated Plus sellers will plummet, and so will the thirty dollar monthly credit. So this will eliminate a great deal of the so-called ''Sponsored'' eBay items.
 
Does not seem like it makes sense to pay extra just to have a Promoted / Sponsored Badge. And remember that more fees are collected on the back end as well. Either you have the best example of an item at the lowest price, or you don't. Smart buyers will find the overall deal which suits their needs, of course, if eBay chooses to show all the purchase options available.

If eBay still wants to hide listings of sellers who do not pay the additional cost, well, if no one participates in the program, whose items can they hide?? They are dreaming if they think a great deal of us will pay more money (again, on both ends) for a service which should be provided in the first place.

by: Marie

@fidomaster
Yes, me too.  I miss my revenue targets all the time.  LOL

@extinctbay

You do not have to offer Free Returns to qualify for TRS.

I do agree with you that there will be lots of sellers that won't use the Free Return policy.  For myself, I will use it on some listings and not on others.

by: justchangecarriers

@Marie

I had a fraudlent return opened. It was as described clearly. And what the buyers said was wrong was clearly shown in pictures and mentioned twice. They opened a item not described properly return. I called ebay. They made me accept the return and said they will no longer close those cases and are encourages sellers to eat the cost and just accept it.

I wasnt very happy. Took a good 15-20 minutes of him acknowledging I was right and me pointing out how boneheaded this crap was and how I wasnt in free returns program. He finally after saying he could do nothing over and over gave me 4 dollars credit on my account for the return shipping and I still had to accept the return and lose original postage since I do free shipping.

So according to that CSR( USA one by the way) this is their new policy and free returns for not as described false claims are now forced, and there is no opting out

by: mcfiver

"...eBay’s development teams are using artificial intelligence (AI) to sharpen the overall search experience, leveraging data and AI to improve recall and relevance on the eBay platform."

Hmmm, if we're lucky, the eBay development team will cede primary control to AI, which might 'recall and relevance' when eBay was an effective universal marketplace - where sellers items were once the star (not brands). And the highest rated sellers were supported and rewarded (not penalized for nutty onerous anti-business policies). When listings weren't peppered with bait & switch links interfering in sellers paid listings. Where SEARCH was once pure and democratic.

by: Maxwell

I have been reading ecommercebytes for a bit and there are some readers here who are very good at commenting with indepth explanations and indepth clarity.  Right off the top of my head I can't think of everyone, but three come to mind.....Marie, Ming the Merciless, and Pace 306.  There are other wonderful indepth commentators, so this "idea" is for you.....take it and run with it.

If you all live in different states, this idea might be really cool.  Marie, Pace 306, Ming and others.......  you should write articles (editorials if that is what is called) for a newspaper.

That newspaper would gain new followings and you guys would help wall street see things from a different view if they do not read the ecommerce bytes blog.  I really am sure that there are Wall Street guys and analysists that are clueless as to what is going on.  (Whether they are clueless by choice, is another topic)

I can just see the newspaper having something on...."page 5"  called "musings from an un enchanted ebay seller" OR   "What nefarious schemes is eBay upto?" OR  "When will  Wall Street open their eyes?"  OR "This is what I think this week" (you know sorta like a Dear Abbey section) except you won't answer questions from the sellers you would just remark on what is going on concerning eBay.  Take your comments made on ecommercebytes and introduce them to the world.

I can imagine the general public getting their newspaper and instead of opening the sports section or the editorials  first thing, they would go to "page 5", just because they are just too damn curious to see what's going on, and they would get an education at the same time.

And then  I can imagine the Wall street people or the analysists (or whatever those people are called)  I can see them dreading to look inside

From there I can imagine a news story coming on the T.V saying how the newspaper circulation has gone way up due to the popularity of reading "page 5", ordinary people being interviewed on the street for their comments... do they read "page 5", do they sell on eBay, do the buy on eBay etc etc. Interviews with sellers and then of course have interviews with the wall street guys and analysists.

This would be very interesting, because while yes ecommercebytes has a large following, there are millions of buyers and sellers who do not read ecommercebytes.........a newspaper column would get a wider reach.

There are certain articles here where many commentators make valid points but what I really like is that comments that go in depth to either explain or clarify.

I am an ebay seller and if I owned a newspaper, I would have a column like this.  This idea is not to bash eBay, I see it as more forcing eBay to go back on the right track.  Because while there was another reader that mentioned writing to their state attorney (which may help but can be long in getting either seen or get any results) a newspaper column would attract the state attorneys attention and the better business bureau etc.

Since eBay is forcing many changes on sellers, how about letting the much wider world know what is going on in eBay land?  

I came across a video of Ronald Regan's last White House broadcast to the people.  I loved something that he said....

"....we the people should tell the Government what the people want and not the Government telling the people what it can or can not do...."  

so it really should be the sellers tell  eBay what they want and not eBay telling the sellers what they can or can not do...and I know that this statement has a ton of pros and a ton of cons to it.

Like I said, this is just an idea for you guys who are great at expressing yourselves so clearly....run with it

Maybe a Newspaper column would be a good avenue to start with....."We the Sellers......

by: Chicago48

IMO losing Target is no big deal.  AMZ doesn't have Target anymore either.  Makes no sense.  I'm sure Target looked at the numbers and figured it was doing well on its own site.
Ebay has Goodwill Auctions and Overstock.  Those are huge stores.  As for missing its target, that happens OFTEN with a lot of companies.  No need to panic.

by: Rexford

What is that phrase eBay keep throwing out? "Augmented reality"?  How do AI and augmented reality personalize a shopping experience if a buyer can't find what they are looking for?

How about a dose of "reality"?   Show a buyer what he or she is looking for.  If you go to the market for eggs you don't want the grocer to shove eggplant, Cadbury eggs or whisks in your cart.

Devin's testiness and irritation are very telling, as is the stock drop.  Knowing how he worships Wall Street he'll likely become much more testy. Of course, as always, he will blame sellers.

by: RKTOYS

Wenig's comment about not being focused on retailers sounds alot like "you can't fire me, because I quit."  I really hope the free market actually works for a change and this blows up in their faces like it should.

by: Snapped

''...and warned them that ''improvement is not always linear.'' eBay grew Marketplace GMV 7%....''

Right.  Go with that, while every measurement and metric claimed to demonstrate claimed growth IS just that.  Linear.  Maybe he means some is rectilinear, as in blowing smoke up one.  

Take that GMV 'increase' for example.  Linear.  Also ignores how much of that 'increase' in sales represents buyer returns, which are never subtracted since no 'loss' is 'exprienced' by eBay.  They're just fine with, and actually encourage returns without consequence or question.  Meaning a buyer can by 27 versions of a widget or wardrobe, and keep the one they like, returning the others.  Maybe that buyer opened 27 different accounts too.  Boom.  More instant 'growth' that isn't.

If Wenig want's to oxymoronically 'warn' anyone congruent with claims of ''good'' performance, maybe he should put some substance in that related to operational reality.  Now that WOULD be ''Big News''.

by: Geetar

Does this mean he will be leaving and going to G.M.?

by: DingDong

A few times I have copied and added links to this site to Wall Street Journal and told them to read and actually see what is going on behind the scenes.

Actually, some of you need to write directly to The Wall Street Journal and other business journals. Maybe there will be someone with a brain to do some investigations.

by: VV

Missing earnings gets CEO's fired. Testy or not.

by: bb6

"The CEO got defensive, saying eBay wasn't going after big retailers (it's going after brands, he insisted), and implied retailers wouldn't survive. (We wonder what Target's thinking right now, not to mention the retailers who remain on eBay.)"

What an idiot!!!! Where was the follow up question for him, what about other big retailers that are still selling on your platform?  This idiot and the rest of ebay management just holding loaded guns shooting themselves in the feet everytime the light bulb goes off. First they got rid of the noise (small sellers), now its the big retailers, now they are just chasing brands? What about the Chinese knocking off all the brands? The answer is probably that there is no counterfeiting going on at ebay.  Ebay one of the main reasons you are failing is because you have No long term plan EVER! How the hell do they expect any business to last on your fee driven site if you never lay out a long term plan. Get rid of the 3 rock the world change announcements every year. You are not growing because you piss every seller off. They are the ones that will grow your business. WAKE UP!

by: ebayout

I took just 6 hours of accounting about a half century ago, but I still gotta ask...
How does ebay get away with counting pass-through money as a "sale"....a.k.a. GMV?
ebay never sees 80-85% (rough guess) of the money transactions between buyer and seller that occur on it's site. They see just the fees.
Also...how do they get away with counting a seller's own shipping charges as THEIR GMV? They realize at MOST just 10% of that figure. Do they pay tax on 100% of that number because there is no offsetting cost to them?

by: Snapped

Ever listen to the street analysts?  When it comes to share 'performance' such discussion rarely includes any reference to underlaying company 'operations' impacts, unless such impacts are themselves particularly newsworthy at a macro level.  

Otherwise, the only 'performance' elements that seem worthy of discussion relate to share price history and projections themselves.  They have their own language and nuance too.  

And that is because, at least in the case of eBay, almost 3/4 of their shares are institutionally owned and traded within broker account portfolios.  Which do not really care about substance or cause, rather 'trends' based on the uninvestigated 'claims' of those subject to such analysis.  

Not exactly 'news' either, but should be.  

by: pace306

I for one congratulate DW on his creative accounting - how he reached that %7.

I guess he had to take the leather jacket off for this call - he must have been sweating bullets.

Anyone with an IQ above 85 and deals with eBay, knows that eBay really has no clue what they are doing since except for one or 2 people - most employees know NOTHING about ecommerce.

First eBay DID actively court large sellers. It was part of the "smaller sellers are crap - they are just noise" and "small sellers are not reliable sources of income for us". Most large retailers knew how to take advantage of eBay - harvesting emails, finding new customers, using it as a place to dump unwanted goods, and of course use it as advertising.

eBay was SO HUNGRY to dump small sellers and to grow the numbers that they turned a blind eye to all the abuses. Of course it was mutual abuse - but neither cared since they both got what they needed. "XXXX is now on eBay" - it made eBay look like a big player (in yiddish - a "macher"). The retailers got a new stream of customers and everyone was happy.

That was great until eBay FINALLY realized that they were getting the short end of the stick and got HUNGRY for MORE.

Now "they dont need" big retailers - THEY SAID THE SAME THING ABOUT BIG BRANDS ON EBAY" .... and that was a lie too.

When they courted brands like Skullcandy - they even cut them a deal to let VERO RUN WILD on sellers and VERO some out of existance .....

eBay got a few thousand sales, the company removed lots of honest eBay sellers (ie they were NOT selling fakes) and all was fine - till all the junk in their basements ran out ..... and they too got enough new buyers emails to make it all worth it.

Sadly, eBay has an abysmal reputation. Since most here dont meet them "live" ie when you go to industry shows - "you have no idea" what happens when people say "eBay". The laughs, the smirks, the "dude - are you serious" all erupt and and then the topic changes to SERIOUS issues (like Amazon).

DW can spin this all any way he wants for Wall Street. But between his active destruction to change eBay from a listing format to a buy box format, the onerous rules, and the constant meddling in Sellers business - Q2, Q3 etc will be a fright.

For sellers its going to be a long hot summer, with eBay lashing out at everyone, blaming THEM for all THEIR ills .... thank god there are other optons available for most sellers.

by: epuise

Sales are on a WWWWWW trajectory... DOWNWARD...
anyone who doesn't SEE that on their dashboard...
is a FOOL