DOWN & DOWNER: Pair of Stories Chronicle eBay Declines
Saturday, November 22, 2008
Purchases and Total page views off 30%
A pair of stories this past week caught our eye. Each reports on one aspect of eBay's business that has seen a recent decline. Together they paint a portrait of a company in trouble.
The first story was titled "eBay Absorbs the Bidder Truth" from TheStreet.com. It details how purchase amounts are down 30% this year vs. last and are declining through the year. The report notes that customers spent "an average of $163.56 during October compared to $232.50 in January, according to the new Main Street Spending Index (MSSI) compiled by Geezeo, a personal finance Web site that helps consumers track their spending."
Though the story notes that eBay's competitors, citing Yahoo!, Amazon and Google among them, are also feeling the pain of a sagging economy, it paints a distinct difference between purchases of new goods and used items.
"But while eBay is seeing customers scale back purchases, the overall market for secondhand goods has grown as consumers tighten their belts," states the story.
That point cannot be underscored more boldly. It jibes with other recent news on the defections of individual sellers, especially those auctioning used items and collectibles, to other sites. One long-held benefit to eBay has been that is was the place bargain hunters went to save on collectibles and still-useful used items. If the market for secondhand goods is, in fact, growing, but eBay sales are off, one inference is that the bloom is off eBay's rose. Non-institutional customers are going elsewhere to transact business.
The next bit of bad eBay news came to our attention from Auction Bytes. Citing data from Nielsen Online, Ina Steiner writes that "eBay has seen a steady decline in page views throughout 2008, and in October suffered a precipitous drop of over 30% compared to the same period last year."
Steiner goes into some detail about the factors that seem to be at work here, including the fee hikes and feedback changes implemented early in the year. But we can't help notice the common figure, 30%. Both stories use the exact figure to describe the declines about which they report. Purchasing AND page views (one very important metric of web traffic) are BOTH off 30%
Earlier this week we asked if eBay's Allure had Abated with Bargain Hunters. Though we have no doubt that the San Jose-based company will weather this apparent storm, it is with much interest that we will be watching for the company's holiday sales tally and its year-end figures. Moreover we are again left to consider just who the winners are here. If customers have migrated elsewhere, who is going to emerge a stronger, better outfit for it?
We'd love to know where you are doing your buying and selling and would appreciate your thoughts on the state of eBay as reported by these stories.
A pair of stories this past week caught our eye. Each reports on one aspect of eBay's business that has seen a recent decline. Together they paint a portrait of a company in trouble.
The first story was titled "eBay Absorbs the Bidder Truth" from TheStreet.com. It details how purchase amounts are down 30% this year vs. last and are declining through the year. The report notes that customers spent "an average of $163.56 during October compared to $232.50 in January, according to the new Main Street Spending Index (MSSI) compiled by Geezeo, a personal finance Web site that helps consumers track their spending."
Though the story notes that eBay's competitors, citing Yahoo!, Amazon and Google among them, are also feeling the pain of a sagging economy, it paints a distinct difference between purchases of new goods and used items.
"But while eBay is seeing customers scale back purchases, the overall market for secondhand goods has grown as consumers tighten their belts," states the story.
That point cannot be underscored more boldly. It jibes with other recent news on the defections of individual sellers, especially those auctioning used items and collectibles, to other sites. One long-held benefit to eBay has been that is was the place bargain hunters went to save on collectibles and still-useful used items. If the market for secondhand goods is, in fact, growing, but eBay sales are off, one inference is that the bloom is off eBay's rose. Non-institutional customers are going elsewhere to transact business.
The next bit of bad eBay news came to our attention from Auction Bytes. Citing data from Nielsen Online, Ina Steiner writes that "eBay has seen a steady decline in page views throughout 2008, and in October suffered a precipitous drop of over 30% compared to the same period last year."
Steiner goes into some detail about the factors that seem to be at work here, including the fee hikes and feedback changes implemented early in the year. But we can't help notice the common figure, 30%. Both stories use the exact figure to describe the declines about which they report. Purchasing AND page views (one very important metric of web traffic) are BOTH off 30%
Earlier this week we asked if eBay's Allure had Abated with Bargain Hunters. Though we have no doubt that the San Jose-based company will weather this apparent storm, it is with much interest that we will be watching for the company's holiday sales tally and its year-end figures. Moreover we are again left to consider just who the winners are here. If customers have migrated elsewhere, who is going to emerge a stronger, better outfit for it?
We'd love to know where you are doing your buying and selling and would appreciate your thoughts on the state of eBay as reported by these stories.
posted by Chris and Frank at 9:16 PM
3 Comments:
eBay had to make choices about what kind of customers they wanted and had to keep an eye on what made Wall Street happy. They decided to lean in favor of big sellers. Now other companies are poised to scoop up what used to be eBay's bread and butter: small, individual sellers and eBay is seeing this reflected in some of the numbers you cite. No harm all around, and no foul - just business.
Grant, Howard Beach, NY
I bet the swap meet sellers are starting to bring back Good memories... of days gone bye to some of the old times at eBay
What grant said is true, they wanted to please Wall Street not caring about main street. And now must live with the choice.
The economic crash that started more then a year ago will be longer then anyone could have thought.
This might be the 1st of many bleak holiday seasons.?
Walter. Agoura Hills
We are left wonder, Walter, if eBay could have had its cake and eaten it, too. Did satisfying Wall Street mean HAVING to shoo away small sellers? Every business is faced with moments when it must decide how much of its past to bring with it into the future. We wonder what eBay will think when some small online auctioneer - perhaps one of the ones we've touted here - becomes the new old eBay.
As to the bleak, Black Fridays to come, we wonder if it is wise for any economy to be built so fundamentally on consumer spending. Pondering macro-econ puts us out of our depth but surely we're not the only ones who find as oxymoronic the notion of spending ones way out of debt.
Happy Thanksgiving.
Chris & Frank
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