Yes they may be, but it is about to come to a crashing halt
eBay has been haemorrhaging both sellers and buyers for years. Furthermore its attempts to increase market share by attracting corporate clients has been and huge flop.
Over the past few years, increase in revenue has been exclusively generated by increasing fees – not market share – which in some categories, particularly quality china and glassware, and books, has resulted in these categories now being a mere shadow of their former selves. In fact what happened with books is perfect example of where eBay is heading.
A few years ago, if you wanted to buy an out of print book eBay was most buyers’ first port of call. Then some corporate idiot decided to increase the store per item listing cost from 10 cents per month to 40 cents a month. The result, just about every book seller closed there store (never to reopen it), with the drop of revenue in this category alone, being so significant, that 6 months later, they reverse the decision and reduce book shop listing cost to 5 cent per month. Unfortunately, by then the damage had been done. Most seller had moved on to other sites and it is these sites, not eBay, who are now the dominant players in the out of print book marketplace.
The point, eBay management are now acutely aware that the company has reached a tipping point. Now, not only does it costs significantly more to sell an item on eBay than any other comparable site, but sales in just about every category are falling, and they will continue to fall unless they, eBay, can attract more buyers, which is why I find the rationale behind the November initiatives so irrational.
The simple fact is, it matters not how well the transaction is protected. The buyer is here to buy a product, and if product is not here there is nothing for them to buy. It is seller, and not eBay, who supplies the goods to be sold, but just as the 30 cent shop fee increase drove sellers away, this has the potential to do the same. That as, far as sellers are concerned, prior to 1 November eBay was a high cost dangerous place to sell, and it is even more so now. So, not only will initiative drive out existing sellers, but new sellers will think twice as hard before listing their goods here. Outcome, less goods available, which brooks the question what is going attract more buyers to generate more sales.
So if you have shares in eBay, I think it’s time to seriously rethink the composition of your investment portfolio.
