eBay Analyst Day: The Future of the eBay Platform

Posted on March 12, 2009. Filed under: eBay | Tags: , , , , , , , |

analyst1

I have several things to say about the eBay Analyst Day held in San Jose yesterday March 11, 2009.  Since I am an eBay seller I decided to start with the information they presented that most affects me directly.  Potential buyers on eBay find me (and other sellers) by typing in keywords into a search function which returns results to the potential buyer.  The future of the search results will look something like the slide above.

In the top section of the returned results, the potential buyer will see a picture of the item along with some key item specifics about the product.  Funny but this catalog approach seems to mimic Amazon.

Next there is a section titled “Trusted Sellers”.  According to eBay, trusted sellers are defined as sellers who have 4.8+ DSR ratings across the board.  So a seller with 98.2% satisfaction rating with 4.8+ DSR ratings would appear in this section whereas a seller with 100% satisfaction rating but has a 4.7 on shipping and handling cost DSR rating would not appear here.  According to eBay, they want to highlight trusted sellers who offer things such as “fast shipping and easy returns”.  Although eBay did not specifically say, I assume this trusted seller section would list fixed price items only since a later slide describes this section as “Retail-like option: experienced sellers vetted by eBay”.   This trusted seller section appears to mimic the Amazon “buy box” philosophy. 

Next on the returned results page is the “Marketplace Deals” section where all fixed price and auction items that do not appear in the “Trusted Sellers” section would appear.  In other words, potential eBay buyers could find some really great “deals” if they are willing to take a risk and purchase from untrustworthy sellers. 

Notice the section titled “What’s nearby” which would be a culmination of the eBay Classifieds section.  And “Sponsored results” at the bottom of the page would take eBay buyers off-site to purchase elsewhere.

Based on what eBay had to say yesterday, it seems to me that the future of eBay will be a hybrid site somewhere between Overstock.com (whose focus is on the secondary market which is now eBay’s newly announced focus), Craigslist (local classifieds) and Amazon.com (who uses catalogs and features trusted sellers).   

For all the talk by Donahoe of wanting to be a winner and not wanting to mimic others, this new eBay platform will not accomplish either of those objectives in my opinion.  eBay did their best to put on a good show at eBay Analyst Day 2009 but I was not impressed yesterday with eBay’s vision for the future.  Since the presentation was not targeted toward me, however, the analysts may have walked away from the meeting a bit more excited about eBay 2011 than I did.

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6 Responses to “eBay Analyst Day: The Future of the eBay Platform”

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Sounds like the end of eBay most people know and enjoyed shopping on…

It is absolutely all puff and fluff. Those businesses who are still selling on eBay presumably have the numbers to make it worthwhile. In my business the numbers said buh-bye.

Unless you are selling as a hobby there is a minimum return on investment, I am not talking transaction by transaction, ‘well I made a profit on this one,’ but month to month and eventually year over year; beneath which the game is not worth the candle as they say.

If you’re an investor:

http://seekingalpha.com/article/125672-what-are-analysts-saying-about-ebay-s-analyst-day
What Analysts Are Saying About eBay’s Analyst Day?

Jeetil Patel – SELL – $11 PT

* While filled with long- term optimism, we thought the analyst event lacked near-term reality with respect to the current deteriorating fundamentals. In light of no near-term (2009) guidance, anticipate acceleration in growth, competitive pressures and economic backdrop, we think it’s difficult to put much credibility into the 3-year plan. We think investors should gauge eBay against near-term performance.
* Near–term, the marketplace business is expected to underperform industry growth trends before flattening out next year and reaccelerating in 2011 – representing an optimistic view from eBay, we think . Clearly, this business represents the cash cow, and risk remains on declining demand, high seller commissions and lack of interface changes. We think the Skype unit is actually performing well, and management should hold on to this business model.
* The problem in the core lies with lack of demand, seller fees running too high and an e-commerce interface that is inconsistent with the industry norm (think product orientation, not listings metaphor). It is quite difficult for sellers to generate cash flows if they have to discount pricing (relative to other sites and direct) and maintain in-line to above-market commissions on selling on the platform, especially with weakening demand.

And what New eBay expects from it’s sellers:

“The old Ebay was sitting in people’s attics. The new Ebay is sitting in warehouses.” Lorrie Norrington

If you’re a major corporation or “small seller” with a warehouse in the back yard, you’ll do fine on New eBay.

As to what we think:

“Run for your life!”
The Doctor, Doctor Who

You’re on fire Brews. EBAY stock had a huge pop from the meeting.

It reminds of the real estate market between 2004-2006. Everything bullish and all the words you hear are great. Donahoe gets on CNBC with a huge grin talking about what a winner he is.

Then I see more changes coming in April and a continued war against sellers and declining revenue on eBay and I have to believe that eBay will continue to go down the toilet.

After 10 years of selling antiques and collectibles in ebay auctions, I am much happier selling in my own online mall. Too bad eBay didn’t realize a good thing when they had it instead of getting greedy at the expense of long-time sellers.

I suppose we should all thank them for last year’s crash course in the fundamentals of fixed price selling. Now we’re just doing it in other places and I don’t think we’ll be going back.

After 11 years on ebay I am moving on. They have repeatedly made me change my password when I used my laptop and Boingo to sign in when I am out of town and want to check on my messages on ebay. They they lie to me and tell me my account was hijacked and tell me I should have a computer expert come in to clean my computer. This happened no less that 10 times in the past month. Then they tell me I can eliminate this by paying $5 and giving them all of my credit information plus a pint of blood(just kidding about the blood) in order to be a “trusted” seller. What a crock of b.s. I have over 3050 feedback and not once have I cheated anyone. If this is the way they treat their Power Sellers (ha ha) then I guess it is time to move on.


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