eBay Q409 revenues up 16%
eBay announced their fourth quarter figures for 2009 tonight, and for the first time in a while, they make cheery reading. Overall net revenue was up 16% on the same quarter in 2008 – and while being up on that dismal quarter isn’t so difficult, there are more indications that eBay’s fortunes may have turned a corner.
The payments business (PayPal and Bill Me Later) was, as always, the star for eBay, reporting a 28% increase in revenue year on year. Significantly, this was the first quarter in which off-eBay payments have exceeded on-eBay payments: this is obviously the growth area for eBay, so expect to see more and more merchants adding PayPal as a payment option in future (when they get Amazon, I’ll be *really* impressed).
Marketplaces revenue also increased by 15% on the same quarter last year, and GMV (the value of items sold) increased 24%. Non-US sales now account for 60% of this revenue, and much of the improvement in eBay’s performance can be attributed to economic conditions in Europe improving. But eBay also believe their European successes are due to changes they’ve made on the site: Top-Rated Sellers are seeing their sales increase enormously (25% in Germany, 35% in the UK), and lowering insertion fees has led to a doubling of the number of items listed on the site.
This earnings call was remarkable for its frankness about what is coming next for eBay sellers. Ina tweeted that JD “hinted” that the European “low IF, higher FVF” model would roll out to the US soon: I think it was the next best thing to an announcement. US sellers, get ready: eBay think lower insertion fees work, and they’ll be coming to your site in the next couple of months, so start planning how to make this fee model work for you. There’s also something revolutionary coming to the Clothes, Shoes and Accessories category: not much detail on that, but that isn’t going to stop speculation (so leave us a comment!).
It’s been a while since I heard an earnings call as upbeat as this one: not only in terms of figures, but on where the company thinks it’s going. JD mentioned two or three times eBay’s mission “to bring buyers and sellers together”. It’s been a long time since anyone from eBay has talked like that, but it sounds like it signals a return to eBay doing what it’s good at: providing a platform, and letting the rest of us get on with business. I hope I’m not being overoptimistic.
Where will we see eBay going in the next few months? Well, we haven’t stopped talking about “the secondary market”, so maybe we do still want to be Overstock when we grow up. But there was less of that, and more – well – vision. JD spelled out three pillars on which eBay’s future rests:
- further enhancing trust in the marketplace by enhancing buyer protection
- improving volume and selection, and continuing to improve search technology
- improving the user experience, bringing inventory to buyers in new and creative ways
The next few weeks and months will reveal what these mean in practice – but it’s safe to say, eBay isn’t quite over yet. 2010 is going to be interesting.
I am all for lower If’s and higher FVF’s.
Since I sell clothing I am also very interested in changes coming to those categories. My new clothing is doing well but my used clothing sales have been dismal
I’m going to speculate that the revolutionary thing coming to the clothing and shoes categories is mandatory accepted returns under all circumstances.
Market leaders like Zappos ( http://digg.com/business_finance/Zappos_wants_you_to_return_those_shoes?t=14369667 and http://www.zappos.com/shipping-and-returns ) are built around the concept of charging more but letting you return for any reason for 100% free. The logic being that buyers will pay more when there is 0 risk to them. And since you can find an example of it on the internet it must be a common trend in ecommerce that eBay needs to duplicate. (yes, I’m aware of the DSR in the UK but I’m talking about the United States)
What worries me is that I heard they will be “improving pricing and search technology” (another website said pricing, not just search). Especially combining that with a survey I saw back in November.
I’m against low insertion fees it just encourages chancers cluttering up the cats
Power seller lines are currently ‘closed for a short period of time’.
My account manager was also due to ring me this morning but didn’t.
Is something big going down???
I wonder what the reaction of people would have been if the results were poor? We would have had a lot more comments and plenty of people suggesting what ebay should do and that JD doesn’t know what he’s doing. Maybe eBay do have a plan after all?
I’m sure the Hoe and his bainite friends have plenty of ‘vision’ and ‘plans’ for most of us sellers.
I sincerely doubt however that you will like most of what you will hear in the next 2 quarters from the eBay bunker.
As to the results – complete tosh – they could have done nothing and revenues would still have risen on the back of improved trading conditions.
The issue is how they are doing relative to other ‘similar’ busnesses and the answer is not very well.
Put simply eBay have underperformed and continue to do so and without Paypal they would be in serious trouble.
The management team are not earning their money – simple as at.
Results were poor. Not catastrophic but certainly not good. PayPal and StubHub were responsible for the majority of gains.
There are grounds for optimism for higher volume Top-rated Sellers, if you look. Small TRS balance on the blade of a sharp sword with every sale, which will drive you barking mad if you let it.
my feet are cut to ribbons balancing on that sword need to get myself some clogs
demoted to pleb seller this month cos we did not sell enough in the 3 monthes and some plonker left 11X 1ns months ago
We understand your pain norf!
For lower volume and especially higher value sellers TRS is a living nightmare where a couple of idiots can materially damage your business on eBay.
Everybody knows it is grossly unfair but are eBay listening?
I doubt it 😥
Only solution is to flog anything you can find that is cheap and cheerful for a marginal profit and do whatever it takes to get 400 plus sales per quarter and get into the calmer waters of TRS rolling yearly review.
luckily TRS is more pride and ego to us, than a need, as we are auction only.
we can bung a few pence on the postage
and make up any FVF discount loss
we really feel for those that run a shop and rely on best match and position in search, they must have to dance like monkeys on a stick,
held to ransome by the whims of ebay and the awkward
nearly 12 years full time selling on ebay ,about 12 negatives in that time so average of 1 neg a year
not one single buyer has ever lost money with us, they either get their goods
or they get their money back and ebay have the cheek to call us Standard,
and some of those outlet bodgers top rated ,it really is a joke
Same scenario here. 8 years of selling on eBay. No more than 5 negatives with no customer ever having lost money and now a “Standard” seller. Was TRS for a month then lost it for a month then regained it for a month and now lost it again.
The way eBay do the calculations has resulted in the yoyoing.
Calculation basis used has shifted from from 12 months to 3 months to 12 months to 3 montths depending on the level of sales. Expect to get TRS back next month and then loose it again the following month! The fact is if I don’t sell anything for a month and revert to 12 months I become TRS!
Only in the world of eBay can a negative (not selling) result in a positive (TRS status)!
How this helps eBay’s bottom line is anybodies guess.