eBay Grows Seller Fees but Not Seller Sales: Execs Explain

by: Frank Abagnale

Am I missing something? Ecommercebytes reported the 2019 Q3 results for GMV for was $21.7 billion:

https://www.ecommercebytes.com/2019/10/23/ebay-revenue
-flat-gmv-down-in-q3-2019/

Today's report said $19.5 billion. Regardless of ebay numbers, ebay sellers need to look at their own profit numbers.

by: COVID-19

"make eBay the "seller platform of choice."

Hah! What a sick joke. Barf! All sickBay has been doing is driving good sellers away with that Mangled Payments debacle and good buyers away with its now horrible search engine that returns spam results (Thanks, A.I. geniuses!) creating frustration.

Good luck with your wishful thinking that the chumps who throw down an occasional $500 for a overpriced "pocketbook" will definitely be spending $5000 on other overpriced, social media-driven, artificially inflated junks.

by: leavingNY

Yes, I have noticed my sales are down 45% over last year. People are not getting all that free government money now, and are paying more for ALL their everyday expenses, so they have way less to spend. Consumers are worrying about inflation and paying more for every day essentials. Not to mention Xmas expenses. Many consumers are starting to panic watching hyper inflation hitting everything they buy now. I am taking a hit on the huge postal price increases, because declining sales, I decided to not raise my prices on shipping, to try not to discourage buyers from making that purchase. The main problem is that Ebay is charging more fees, and cost for inventory is going up too, so a seller who is not stealing their inventory has to charge more to just make a profit after all the Ebay fees get paid. With all the "legal shoplifting" going on in many cities, some sellers are also competing with the shoplifters too. As the Ebay fees keep increasing, Ebay seems to be making more then me on some of my items now. Since the pandemic began, I no longer do international sales except for Canada due to the item not received claims that time out, and Ebay takes the money from you, and gives the buyer all their money back, when eventually the package does get delivered. This can add up to HUGE losses. The supply chain has been broken for a year now, so many items are not available for me to source now too. My supplier was forced to raise his prices when containers from overseas now cost him 20k per container now, up from 2k. Ebay has no mercy for sellers for all the problems and challenges that this pandemic has caused us. I am already seeing the USPS loose priority packages for several weeks, causing me a huge hassle with that starting earlier this year then last year. I currently have two lost, with one Bonanza sale being forwarded, but pay pal is going to give that customer back over $100 because they told me it was not delivered. Sheesh ! After doing this almost 20 years. I have had about enough of being ripped off by buyers and Ebay screwing me. Ebay just keeps on taking and taking. Ebay profits go up and the sellers profits decline.  

by: Marie

@leavingNY

Comparing sales yours, mine or theirs to 2020 will not give you very accurate numbers.  Which is why Ebay is comparing the numbers to 2019.

Last year the Pandemic really made the numbers quite different than normal for many.  I know for me, my sales where higher than I've ever had before on all the sites I sell on.  So comparing this year to last year would be very sad.  For me it is more in line with 2019.

by: Chicago48

The number of active buyers declined by 5%, and during a post earnings call on Wednesday,
^^
A lot of sellers are going to other platforms like Merc and Posh.

by: wrslss1222

There are ways eBay can help sellers increase sales but eBay does not seem to have the knowledge or desire to do anything but makes ridiculous changes that are created by individuals that do not seem to have any real selling experience on eBay.

by: Rexford

^The CEO cited an example of a buyer of a $500 pocketbook who will spend $5,000 in other categories on eBay as his reasoning behind focusing on "high-value buyers."^

Did he happen to mention any seller protection for those sellers selling these high dollar goods?   Ever had a strap removed from a $500 purse by a buyer so that they could file a SNAD Iannone?

When I hear the CEO toss out a buzz words like "upper funnel" I can't help but think that he is speaking about all of the dollars that funnel up to the C-Suite as the sellers pay more and more fees, watch their sales plummet and their profits shrink.

A business model that depends on postal rate rises to increase earnings is quite the pathetic business model.   Iannone, I highly recommend that you read a book about Henry Ford who clearly understood that for a business to do well the workers had to succeed with a financial return for their hard work.  Of course he was not on his knees trying to please Wall Street.

by: DingDong

eBay are growing seller fees - but it's the interest they make off of holding onto the sellers money for 30, 90 or plus days.

Buyers decrease 5% is probably the sellers who have left the platform. I use to sell on eBay, now eBid, and I have made very little purchases on eBay. There is one person that I had create an item for me and for some reason, they won't honor the price on eBay on their website. The company wouldn't be paying all the eBay fees. ? ? ?

by: Ronn

It's uncanny how eBay is more and more becoming like the USPS. Declining service levels while prices increase.

by: epuise

@LeavingNY
" People are not getting all that free government money now, and are paying more for ALL their everyday expenses, so they have way less to spend."
1. The Gov't $ wasn't 'free'... it was TAXED... Paid for by TAXES that mostly WORKING people pay...If employers hadn't LAID OFF millions... If EMPLOYEES hadn't been paid SO LITTLE, FOR YEARS... Had SAVINGS, or, PENSIONS, and HEALTH INS... The Gov't wouldn't have NEEDED to hand out (not) "Free" money... As the WEALTH went to the TOP... As CEOs make 300X (or more) the average wage, (instead of 30X)... WORKERS went from lower Middle Class to POOR... in one month.
2. People SAVE money NOT working... the $30,000 a year they 'earned' (before tax, travel expense, childcare... was NEVER theirs TO KEEP... CUTTING EXPENSES (staying home)... NETTED more in the household... SOMETHING was/is WRONG w/ WAGES if that was the case.
3. People were NOT spending OUTSIDE... B&M, Restaurants, Movies, etc... that TRANSLATED to spending INDOORS, ONLINE, to run a home school, or, office, or, entertain, or eat, or get supplies... ANY ONE who thought THAT bump in ONLINE shopping would continue, is a fool...
4. As TAXES favor THE TOP 20%... of course 'Venues" will favor THEM... THEY saw their NET WORTH / INCOME... RISE in the Pandemic...
5. Until TAX, WAGE STRUCTURE CHANGES... THIS is your 'new normal'... scratching the earth to eat... But, never fear... Musk, Bezos, et al... Your INVESTMENT in GOP & similarly greedy Congress / Senate... WILL pay off... mightily... Until... it doesn't... until the masses can't AFFORD to buy YOUR PRODUCTS... Until the masses realize... It is a higher 'NET' to NOT WORK FOR YOU... To maybe DOWNSIZE... to open a small biz from home... to NOT add to your coffers.

by: terry55

Only reason ebay is still alive is because of the virus, it was almost dead in the water in '18. My sales have dropped 50% the last 2 months. Ebay's lack of caring for sellers and the yearly shipping rate increase's, won't be long of the small sellers online

by: Shanna

How Does Mercari, a tiny company compared to eBay, able to keep their shipping prices the same while their shipping partners all increase their prices? Its like they are looking out for their buyers and sellers who use their platform.

by: pace306

eBay has ALOT of explaining to do - it just cares not to.

As long as Wall Street (aka "the beast") keeps being fed BS by eBay execs and letting the stock value grow - the more "leash" it gives itself.

Wall Street is complicit since it pretends that the numbers its fed are true and accurate - just try adding a comment to a stock website about eBay and explain what selling on eBay is REALLY like - and watch them pounce on you - like you called their mother a bad name.

They all too soon forget ZZZZ Best (1986), Centennial Technologies (1996), Bre-X Minerals (1997), Crazy Eddie (1997), Enron (2001), WorldCom (2002), Tyco International (2002) and many many others.

Does eBay make money? yes. Is eBay a major player in ecommerce? yes. Is eBay "too big to fail"? Wall Street seems to think so and gives it cover.

Most people think eBay and Paypal's split was mostly about activist stockholder(s) and Paypal's inability to process payments for other competing platforms, but there was MUCH MUCH more to it then that.

Ever wonder why eBay didnt put up much of a fight about the split? After all eBay spent 10+ years telling anyone and everyone how Paypal was THE ONLY safe way to shop online. You HAD to use Paypal or be kicked from the site.

This allowed eBay to 1) play good cop/bad cop with sellers 2) push any losses on to Paypal's books 3) "go along" with the "we are only a venue" statement they made UNDER OATH in court.

But then eBay/DW realized they had a problem - eBay just wasnt growing. It jumped the shark ages ago and they didnt even realize/care. Demonizing your sellers at every turn, lieing cheating and stealing from them and abusing them - started to catch up.

eBay is/has become good at BIG things, with smaller things getting ignored. Programming issues that eBay finds silly or not important (cart issues, search issues) get ignored, while fancy new shiny programs like MP or even CPC get all the attention.

eBay has become the lumbering giant, too big to get out of its own way.

eBay LOVED (not just "didnt mind") Paypal's exit, since it gave them an opportunity and "a way out" to convince Wall Street they could increase revenue. How? Playing with fees, holding money, forcing returns losses on sellers and so much more - because THEY now played CC.

The MP roll out was of "kindergarten quality" and was PLAGUED with issues. But no on in San Jose cared, since all the glitches "magically" made money for eBay.

eBay tells Wall Street and tells reporters "we are now processing ~ %90 of payments on our platform"! Really? by what means? If I hold a gun to your head and force you to do an action - can I claim success? No - because I FORCED you.

No one asked for MP, no one wanted MP, most want OUT in fact - but dont tell Wall Street that. All those yummy delicious fees are now eBays to do with as it feels and "show Wall Street" that no matter what's going on - eBay CAN and IS making money.

eBay always thought that Paypal was to gentle with sellers and now with eBays SUPER subpar CS service - it finally had the tools to get even with those bad nasty mean sellers. Dont like it ? Hate MP? Too bad - use it or get off the platform! (where oh where has that little Pierre gone, oh where oh where can he be?)(sunning himself on some island most probably - with YOUR stolen FVFs!)

eBay revenues go up, because they more or less control sellers and their business's. eBay makes money whether you make a sale or not. eBay makes money if theres a return, if you have too many returns, just by listing items (they sell the data). eBay makes money on the cc float, on the hidden fees (you have no real idea what fees SHOULD BE - its what eBay says they are at any given point in the day).

Worst of all, people who use eBay come away feeling SLIMY - and that shouldnt have to happen.

"The CEO cited an example of a buyer of a $500 pocketbook who will spend $5,000 in other categories on eBay as his reasoning behind focusing on "high-value buyers." - really? I %99 doubt that that statement is true. Where are the facts to back it up beyond eBays say so?

Whats of course missing from the statement(s) is how eBay relates to its sellers. It cant grow and wont until the relentless 24/7/365 war on them stops.

You can use every trick in the book - 3D images, 4D images, blocking sellers (like from the refurbished categories) all you want - but it wont make up for the bad feelings one gets when dealing with eBay corp.

by: HappyOne

Now it is clearer to me why all the item specific “required and suggested” along with all the category changes. Ebay doesn’t want my $10 to $25 replacement china and silverware, toys, tools or post cards. Since I don’t have any $500 sneakers (anyone remember Beanie Babies?) or pocket books I guess my selling days on Ebay are limited. If I had any $500 sneakers or pocket books I would not be selling them on Ebay - “only sell on Ebay what you can afford to lose”.  

by: toolguy

in 2021 I have bought 8 times on Mercari which I would've bought on eBay!

I'm still buying on eBay but I'm buying less. I NO longer feel obligated to eBay like I have in the past. . . .eBay NO longer pays my bills :-(

I'm the "Joe Lunchbucket" type, if I'm moving away from eBay so are many others!

by: WaLK-aWAY

Do people honestly fall for this rhetoric? Ebay is a cesspool of fraud and can't be by seller nor buyers. Sooner than later, the clown investors will catch on, and this goofy platform will go by way of "MySpace".

Ebay is the under age drunk kid at the corner bar making an a**s out of himself in a crowded room, taking selfies with all the patrons.

by: I Must be Crazy

Ebay is toast. Has been for a long time. The fact that it did grow so much so fast is the only reason is exists today.

There are a number of problems with eBay's latest earnings. None of it is a surprise as I could see this coming for quite some time now. It is only going to get worse.

Take managed payments, as many here have prophesied, the additional revenue is just making up for what is being lost through the core marketplace. This is no different from the papering over of declining marketplace activity that eBay managers whipped up when Paypal and Stub Hub were still part of the company. And, yes, there was resistance to spinning off Paypal. That changed when Carl Icahn acquired enough of a voting share of stock, along with other large holders, that would have replaced members of the board and John Donohoe if they did not go along. That was a forced effort. Brought on again by Paul Singer and Jesse Cohn with the forced sale of Stub Hub.

Iannone's strategy of focus on the ''top of the funnel'' is word spin and crap. It is mindless conjecture with no basis in fact. First, eBay is not known for being high end anything. Part of that flea market image they have never been able to shake. Try as they might. Second, they must rely on sellers to post such items. Now for me, I am scared to death when I list anything over a couple hundred dollars on the site. I do it, but I am holding my breath for 60 days after selling. With that, I have to bear the cost of insurance AND signature to mitigate any of those issues. I have some car parts worth hundreds of dollars that I won't risk listing on the site.

I am not alone in being cautious. That by itself should cause anyone hearing that bunch of garbage to question the veracity of the strategy. I doubt eBay can anymore focus on only high end product and buyers any more than I can within my limited sphere. Why? BECAUSE EVERYBODY WANTS THAT BUSINESS!!!

Further, the seller base is declining because selling on eBay is not worth it for most people. I know plenty of Uber Drivers, Door Dash and other workers who make more than many sellers do slugging it out on eBay. My margins are getting thinner every year and it becomes not worth the trouble. There are other options. I doubt Iannone is even considering the value of time when pondering why the seller base is shrinking.

Nobody should be surprised the Covid wave broke and things basically dropped back to the downward trajectory they were on pre-pandemic. Yes people received stimulus checks, and were stuck at home perusing online. But I think the REAL reason we all saw our sales lift is that eBay turned off the throttle and limits that manipulate search. 33 percent of the USA didn't just wake up one day and decide they needed parts for their 25 year old truck. The stuff has always been there, and yet I had merchandise flying out of here that sat for over a year. Sales this year, down 40 percent from 2019. It isn't coming back, ever. Sure I can list more, but working harder for the same or less is not sustainable.

Ina is correct, people are paying to advertise just to keep their items visible and sales at current levels. Again, shrinking margins that will eventually turn off sellers.

Jamie Ianonne was underwhelming at Walmart. He has proven himself to be completely out of touch in running eBay. Donohoe was arrogant. Wenig was just evil. But this guy may be the dumbest of all.

by: toolguy

FVF on shipping was the most ingenious idea ever!

The employee who came up with this idea should've been given a million dollar bonus.

None of us sellers like it but from a company standpoint it's a money maker!

Just remember, prices are going UP. Maybe it's time to adjust your prices due to inflation. . .

by: RKTOYS

eBay basically shut my account down over the summer for not joining Mangled Payments.  The year leading up to that was better than it had been in a while but no match for live event sales.

I guess I was always a "low value" buyer/seller working in the $20 to $100 range.  The last purchase I made was for a $3 USB port cover for my phone.  Before that was a $12 Hot Wheels car.  Months before that was a Switch game with some late tax because eBay was the only option.

eBay is just too expensive to compete with many other stores and venues.  They charge more and more to deliver less and less.

by: Marie

@Chicago

Yes the active buyers did decline and that is disturbing to be sure.  The active sellers however did NOT decline, it remained the same as it was in the 2nd quarter which at that time we added over a million sellers.