Friday, July 23, 2010

eBay Is in Trouble

Nothing could be more clear to me. EBay is in trouble, and they know it. If you have seven minutes to spare, then watch John Lawson of explain eBay's earnings report.

The upshot of it is that eBay reported a 2% growth year-over-year during the 2nd quarter, thus making it sound like eBay is doing okay. The trouble is that eBay was at a 6% growth year-over-year at the end of the 1st quarter, meaning that eBay has experienced a 4% net decrease during the 2nd quarter. EBay's revenue declined despite higher fees and fewer power seller discounts. Oh, dear.

During eBay's earnings report, eBay CEO John Donahoe concentrated on how well PayPal is doing and mentioned the marketplace very little. The only reason that the overall corporation is doing fine is because of PayPal's revenue. If eBay did not own PayPal, it would be in a tailspin. Actually, the eBay marketplace is in a tailspin.

John Donahoe admitted that Best Match is not working well. Big surprise. Remember that eBay first gave fixed-price listings preferential treatment over auctions, which was part of the process that ultimately caused me to leave eBay for Bonanzle. Beginning sometime in the last year, eBay changed Best Match to make auctions more visible than fixed-price items. Donahoe just announced that... prepare yourselves... Best Match will be tweaked again to give fixed-price items better visibility. Plan A did not work, so eBay went to Plan B. Plan B did not work, so eBay is going back to Plan A. How do you spell stupid?

I have no respect for eBay's executives. They fail to understand their marketplace. We need items sorted by "ending soonest." Could we please change back to that default?

Remember that eBay began making all these changes in order to compete with Amazon. It should be noted that Amazon's 2nd quarter sales increased by a whopping 41%. How's that working out for you, eBay?

If you are a seller who is disenchanted with eBay, please join me on Bonanzle. The fees are much lower, and Bonanzle is steadily gaining ground. It is still a very new site, and our main problem is that a large number of buyers mindlessly search eBay with no understanding of the huge e-commerce world outside eBay. This is great for the people who keep selling on eBay, but somehow I don't think most of those sellers are doing so well on eBay anymore.

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