eBay’s mission is to be the world’s favourite destination for discovering great value and unique selection
eBay full Year 2020 results reveals SIO generates 1% of all sales
eBay have had a stonkingly good year turning in their best results for a long time. In the eBay full Year 2020 results they revealed that revenue for the fourth quarter was $2.9 billion, up 28% and for the full year $10.3 billion, up 19%. More importantly for merchants GMV was $26.6 billion, up 21% for the quarter and $100.0 billion, up 17% for the full year.
The $2.9 billion and net income of $600 beat expectations with investors predicting more like $2.7 billion in sales with income close to $580 million.
eBay also bumped their dividend to $0.18 per share, a 13% increase from the prior quarterly dividend, and expanded their share repurchase authorisation by an additional $4.0 billion, having repurchased approximately $5.1 billion of their common stock and paid $447 million in cash dividend in 2020.
“I am proud eBay was able to be there for our buyers, sellers and community, especially in the face of a global pandemic. We finished the year with strong financial results, but what inspires me most is the support we’ve been able to extend to small businesses — providing them with tools, resources and access to millions of buyers globally. We will continue to invest in product and technology in order to deliver the best marketplace in the world for our customers.”
– Jamie Iannone, Chief Executive Officer, eBay
Doubtless the pandemic has helped eBay boost sales, but they’ve also done all the right things to take full advantage. They saw high sales velocity in hard-to-find and sold-out items. Refurbished gifts also emerged as a top trend, and eBay saw many products from top brands in their certified refurbished experience sell out completely.
eBay experienced unprecedented traffic levels for most of 2020, on more than 100 days in 2020 they exceeded peak 2019 traffic levels!
eBay payments and Advertising
eBay continues to scale its management of payments globally and in Q4, over 38% of global on-platform volume was processed through managed payments.
Promoted Listings delivered over $215 million of revenue in Q4, up 60% on an as-reported basis and up 57% on an FX-Neutral basis. eBay’s total advertising revenue reached a new milestone in 2020, passing $1 billion in revenue for the year.
eBay payments, despite some disruption as sellers migrate and have to adapt to new accounting methods, should represent savings for many sellers whilst at the same time generating income from eBay. eBay Promoted listings is a direct cost of sale for sellers and so on the surface might seem a less attractive proposition, but eBay say that sellers who have adopted promoted listings are seeing, on average, a double-digit sales increase.
Seller Initiated Offers (SIO)
One important thing to highlight is the free Send offer to buyers tool which eBay rolled out. In the last year, Seller Initiated Offers feature surpassed $1 billion GMV. With $100 billion total GMV reported in the eBay full Year 2020 Results, this means that 1% of all eBay GMV was generated by sellers clicking a button and sending an offer to buyers that had previously shown an interest in their items.
If you’re not using eBay Seller Initiated Offers then it’s time to start doing so. All you need is margin in your list price to enable you to send a discounted offer and it will generate incremental sales that you are missing if you’re not using currently the tool.
eBay full Year 2020 Results in the UK
The UK continues to perform strongly out of all eBay’s country sites around the world
- In the US, 1 in 10 online shoppers bought something on eBay.
- In Germany, that number was 1 in 7 online shoppers bought something on eBay.
- In the UK, 1 in 4 online shoppers bought something on eBay.
Put simply, eBay in the UK has engaged the population 2½ times more than in the US.
In a recent interview, eBay UK General Manager, Murray Lambell, revealed that traffic on eBay UK peaked at 29 million and has held steady throughout the year at higher levels. Buyers are coming to eBay and they are remaining engaged.
Building on its success in the US, eBay launched an optimised Brand Outlet experience in the UK with 150 fashion brands offering products at deep discounts. This type of initiative is hyper important, in the US eBay have majored on sneakers (trainers in the UK), offering free selling fees and authentication services.
“In 2020, the average customer who purchased a pair of sneakers over $100 spent a total of $2,500 on eBay. Approximately 80% of that spend was in categories outside of sneakers.”
– Jamie Iannone, Chief Executive Officer, eBay
Whenever you see eBay building a branded or vertical experience for buyers, it’s easy to point at it and assert eBay are only looking after the big brands. The reality however is that the 25 times overspill spend in other categories is one of the ways eBay find buyers for you.
eBay partnered with the NHS to create a new platform to quickly and efficiently distribute PPE to frontline workers. In Q4, the NHS PPE Portal, powered by eBay, reached a significant milestone delivering more than one billion PPE items to more than 45,000 social care workers in the UK.
To create economic opportunity amidst the pandemic, the company partnered with the Federation of Small Businesses and Adecco Working Ventures to boost youth employment opportunities for up to 1,000 people.
“If you’re not using eBay Seller Initiated Offers then it’s time to start doing so. All you need is margin in your list price to enable you to send a discounted offer and it will generate incremental sales that you are missing if you’re not using currently the tool.”
Simply don’t have time to deal with “offers” , my stock in competitive priced to begin to begin with without dealing with people trying to a £1 off of a £3.00 item.
As 1% of very little is still very little. I’ll continue to concentrate on Amazon.
If you’re doing it right then SIO doesn’t take any time to deal with it – this is you initiating the process and defining the price, and they can take it or leave it (you can choose to just ignore counter offers). This is different from Best Offer (initiated by the Buyer) where you have to see, interpret, and figure out how to respond, and that can take a bit more time. SIO allows you to define when and what you want to offer them and then that gives an additional outreach to those who have expressed interest. We’ve made it very easy to implement and have seen a nice marginal sales uplift among those who are participating, even among the small percentage of buyers that actually follow up and purchase based on that offer. By making it easy and fully automated we took out any effort involved, so it’s just free additional sales.
@marshall “easy and fully automated”
Hi, how do you do this? Would you please share some advice? I thought it was a manual process via MY EBAY>ACTIVE LISTINGS. Thanks!
We’ve made the tough decision to leave eBay by December 2021.
It’s just too expensive to sell on now, we’re having a full blown eCommerce ‘site built and it’s still going to come in at under half what we pay eBay each year even with monthly maintenance costs factored in.
I hope it goes well for you- and remember no hoops to jump through, no stupid customer support “advice” and no account defects (even if you’ve done nothing wrong). No malicious feedback, no buyer extortion and your future in your own hands. eBay was ok when final value fees were 5%, now we are running at 14% even without paid for promotions.
It’s just not worth the hassle anymore. We sell on three sites- and I can tell you in all honestly eBay creates the most problems by far.
You will enjoy the pressure free environment., I’m sure you will thrive.