eBay: Did listings change make a difference?

eBay: Did listings change make a difference?

Summary: EBay on Wednesday reports its first quarter results and there are many loose ends to tie up. Did the company's changes to listing fees make a difference?

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EBay on Wednesday reports its first quarter results and there are many loose ends to tie up. Did the company's changes to listing fees make a difference? Can eBay weather an economic downturn? Can the auction giant get growth going again?

Those are some big questions and eBay's new CEO John Donahoe, who officially took over March 31, isn't going to have all the answers. But we'll at least get some color on eBay's prospects in future quarters. It's been a long two months since eBay cut listing fees, boosted selling standards and dangled carrots in front of sellers to move more volume. The listing changes initially looked bad for eBay--it even faced a boycott that apparently fizzled--but anecdotal reports indicate that the hubbub has died down.

EBay is expected to report earnings of 39 cents a share on revenue of $2.08 billion, according to Thomson Financial. Most analysts expect an inline quarter with a little help from a weak dollar--53 percent of eBay's revenue comes from abroad. In other words, a weak dollar, strong euro and British Pound equates to an earnings bump for eBay. According to Jeffries analyst Youssef Squali every nickel decline year over year in the U.S. dollar against the pound and euro boosts eBay revenue by $27 million. Add it up and Squali figures eBay will get a revenue boost of about $87 million from a year ago.

Citigroup analyst Mark Mahaney said he expects eBay to report better than expected first quarter results.

Among the key issues:

  • Listings growth. Squali says that core U.S. listing for eBay gained six of the seven weeks since Feb. 20, indicating that the company finished the quarter in relatively good shape.
  • Average selling prices. RBC analyst Stephen Ju notes that eBay's average selling price per item is likely to have fallen due to the listing fee changes that favor cheaper goods. What remains to be seen is whether the decline is worrisome.
  • The outlook. Analysts say that eBay will project earnings and revenue in line with consensus estimates for 2008. A weak economy, new management and the listing fee changes mean higher guidance is unlikely.
  • Progress of the new management team. Donahoe has highlighted broad goals in enhancing the eBay experience, boosting listings growth and melding the auction and fixed price models. Where does management stand with those goals?

Here's Mahaney's handy cheat sheet ahead of eBay's earnings report:

ebay.png

Topics: Banking, E-Commerce, Enterprise Software

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11 comments
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  • Ebay - protect the seller, screw the customer

    I am one of the folks that got ripped off, $800, too bad. PayPal Protection? It's for the seller stupid. Every try to have PayPal use a credit card and STILL have it take money from your bank account? Wonder why? You can't get your money back from a bank transfer. eBay for Dummies and Suckers.
    Daemeon.Reiydelle@...
    • That's why I quit using PayPal

      I ran up to their 'limit', where they insisted that I register my bank account, and instead, I just quit using PayPal (and mostly quit using ebay).
      There must be tons of other people who did the same thing.
      When will they get access to my bank account? NEVER!
      TranMan
      • I quit using PayPal and eBay TOO!

        After using eBay and PayPal for 10 years, I reached the PayPal limit, and to send any more money with PayPal I HAD to give my bank account information or get a PayPal credit card. Because eBay insists on payment by PayPal, I have quit using eBay also. Darn Shame! I enjoyed it for years and had 100% positive feedback..
        hsmith360
    • Ebay - protect the seller, screw the customer

      They maybe now but it wasn't 3yrs ago i was a seller and was getting the screws put to me by the customers i would send out there Items have the proof of shipping and they where saying they never got items I ended up having to pay back $4000 for item i sent and some people would tell me that with in aweek of getting there money back they got the item i asked them to pay for it then and they said F**k U so dont tell me you got Screwed because I got it twice
      james1701_d
  • the boycott wasn't about fees...

    It was about the proposed changes to feedback. In May, sellers will no longer be able to leave anything but positive feeback for buyers. Ebay claims this is to prevent 'retaliatory' feedback from sellers when buyers leave less neutrals or negatives (which does happen; I've been the victim of it). However, there are just as many 'bad' buyers on Ebay as sellers, and this move will encourage them to lie, extort and scam to their hearts' content, leaving the sellers no recourse at all.

    The other issue is Paypal's ability to 'hold' money for 21 days if they deem a transaction 'suspicious'. This means A. a seller will have to spend her/his own money to ship an item before being paid for the purchase, or B. the seller will wait until the money is unfrozen before shipping the item. Something tells me choice B will result in a rash of negatives from angry buyers, while choice A will allow sellers to be cheated by 'bad' buyers. (did I mention that ebay has banned the use of google checkout?)

    The underlying problem is Ebay's continued insistence that the BUYERS are their customers, when in reality it is the SELLERS that pay Listing, Final Value and Paypal fees. Their changes are never about 'improving the ebay community' (there have problems with counterfeit goods and fraud for years; they've done nothing but pay lip service to it) but always about improving short term stock price.
    conspicuouschick
  • RE: eBay: Did listings change make a difference?

    Ebay is about as crooked as they come.

    They have only one interest and that is to fatten their wallet and screw the customers.

    I have reported gangs of scammers without them doing anything about it but they have ended auctions of mine for such simple shit as having a link to a site that has a review about the product simply because someone could actually BUY it from that site, despite it being much more than I charged for it.

    They dont' respond to claims and problem e mails and I have never had any help from them when being ripped off.

    I truly hope that someone comes and takes them down a notch because I truly feel that they are a totally dishonest company.
    guiri
  • RE: eBay: Did listings change make a difference?

    I have to say, I love eBay although I was sent a counterfeit copy of Vista, Paypal recovered all my money. I still have complete faith in them.
    zincalloy
  • eBay's pact with the devil on Wall Street

    I have used eBay for over ten years, but just to buy and sell used collectibles (phonograph records). I can state flat out that there is NOTHING eBay has initiated over this long time interval that has helped me. Today there is no transparency (you have no idea who you are bidding against), the listing fees and commissions have been significantly increased, the feedback system is a ridiculous joke, PayPal is constantly shoved down everyone's throat, and the amount of reissue and reproduction/bootleg merchandise is out of control.

    The fact that things only get worse over time suggests that eBay probably CANNOT do anything about these problems because its quarterly financials would now be a great risk. The counterfeit merchandise alone probably accounts for 40 percent of items sold in the collectible categories.

    Now, it is true that many eBay record sellers are at least honest enough to correctly identify what they are offering and will gladly answer your questions prior to an auction closing. But I contend that all this counterfeit merchandise should simply NOT BE OFFERED in the first place.

    I would be interested in comments from other experienced collectors who use eBay. I believe the time is long overdue for a top-quality specialty auction site to arise online that caters only to buyers and sellers of genuine old and collectible items. Those who shop eBay for new merchandise, electronics, automobiles, and real estate may have a whole different take on the situation.

    Don Mennie
    dmennie
    • Long time eBay "cuss-tomer"

      Like you, Don, I have bought and sold collectibles on eBay for 10+ years. The main focus of this activity being glass such as Fenton, Westmoreland, Imperial and Degenhart. I have watched eBay change over the years into a place where you have to be very careful about what you buy or who you sell to.

      Now that eBay has gotten so big, it is impossible to tell legitimate buyers/sellers from the frauds and con-artists unless it is someone you have done business with in the past. Feedback has become meaningless as a method of judging and you can't contact other buyers to see if a given seller is really legit.

      It would be nice to have a screened site for selling/buying collectible items. It may not teach sellers how to package to prevent breakage in shipping, but, at least you might keep the fraud to a minimum.

      What types of records do you collect? By age, speed, music genre?
      meanoldmom
  • RE: eBay: Did listings change make a difference?

    While it is true that eBay did reduce listing fees, on the other hand they raised final value fees (fees the seller pays on the final price of the item.) In addition, the fee paid to Paypal has not decreased. Most buyers have no idea that sellers pay so much in the way of fees. This is one reason the s/h fees have gone up. Sellers have to recoup their costs. Simple economics. You cannnot afford to lose money on a sale and hope to stay in business.This has basically driven me off eBay. I have bought and sold on eBay for over eight years. Unique positive feedbacks in excess of 800.
    I do not do this as a business but as a hobby - selling stuff I don't want in order to buy stuff I do want. But I am not crazy enough to list stuff and then give it away either.
    Fortunately I have found another site where I can do business. For many hobbyists,however, there is no alternative but to use FeeBay. For example, try to find a site where an individual can sell vintage comic books. Good luck!
    I only return to eBay when they run a sale on listing fees. Other than that, I hide in my cave or under a rock.
    poppadawg
    • [b] What is that other site for doing business?[/b]

      Nice post and you keen to the point.. selling for profit on Ebay has gotten very hard. Ebay buyers are like sailors on leave.. they have $ but they want a discount from the red light district.

      What is the other site you mentioned?
      junkmailstone@...