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What do high value eBay buyers look like?

By Chris Dawson August 12, 2021 - 3:26 pm

eBay’s strategy, laid out in the latest earnings call, is to focus on building lifelong trusted relationships with enthusiast buyers. They are defocusing on eBay buyers who buy occasionally or make a one off purchase and doubling down on those that make regular purchases over an extended period of time.

“We’ve discontinued legacy tactics that led to low value, infrequent or one and done buyers. Our buyer base is starting to evolve based on this strategy. These high-volume buyers are growing compared to a year-ago and their spend on eBay is growing even faster. This higher-quality mix of buyers increases value for sellers and will lead to improved health of our ecosystem over the long-term”.
– Jamie Iannone, Chief Executive Officer, eBay

When you look at eBay buyers, 20% of them make up 75% of GMV and eBay’s challenge is how do to turn more buyers into these lifelong enthusiasts. Compare that to the 50% of buyers they only contribute 5% of GMV and it’s easy to see why eBay are zeroing in on high value customers. These high-value eBay buyers are defined as those that are buying over $800 (~£575), buying six times a year, or buyers who also sell – it’s been known for decades that an eBay buyer who sells just one item goes on to be a much more engaged loyal eBay customer.

When eBay do win a brand new buyer, they are going to be really focused on the first 90-days of the customer and getting them up their lifecycle, so this is going to be a purposeful strategy you’re going to see eBay prioritising on for years. Rather than attempting to re-engage with old buyers, eBay will be looking to highly engage with those new to the site.

This strategy should be apparent in the type of promotions that eBay offer and this will be worth monitoring in Q4. If eBay are less interested in attracting a buyer to a one of single hero deal, how they market Black Friday may change and events such as site wide 20% off promotions might be a thing of the past. It also won’t be a surprise to see eBay mute email offers to aged buyers trying to drag them back to the site with a promo – the strategy from 2019 and earlier has been binned.

The new strategy will see more initiatives such as in the recently launched price guide and collection tools, aimed at trading card enthusiasts, Luxury watches and handbags, the eBay Certified Refurbished experience and expanded the My Garage feature, not to mention sneakers which has been ongoing for a couple of years. It’s worth a reminded that that in 2020, the average customer who purchased a pair of sneakers over $100 went on to spend a total of $2,500 on eBay. Even better, about 80% of that spend was in categories outside of sneakers.

If eBay continue to see buyers in these categories translating into high value eBay buyers then this will remain the forward direction of travel.

  • SAM
    4 months ago

    The weekly 10% 15% and 20% discount code of the same sellers every week I think wore thin a long time ago it is to often and same old stuff.
    I used to spend a lot on eBay but it rarely crosses my mind these days. Even if I find a product on eBay via GS normally I will generally buy direct from a merchants site which is normally beside the eBay offer and it is better priced the majority of time.
    Even if I can get it cheaper e.g a new fridge freezer for some tenants last month was cheaper with a discount code with AO on eBay than direct I can not get the same delivery options and extras like old appliance uplift so for the sake of 20quid ended up going direct .

  • JoeB
    4 months ago

    I used to be an ‘enthustiac buyer’ but since I was bullied on to Managed Payments I don’t have money sat in PayPal so there’s no incentive for me to buy on eBay.

    I’m sure one of many.

  • 4 months ago

    This muddied thinking comes from marketers talking about lifetime value of the buyers as if their buyers are things they buy and acquire. They are not subscribers. They are making transactions. And they will make transactions wherever the inventory is offered at a good price and is easy to buy. The “good buyers” are simply people who are tolerant if the terrible purchasing experience on eBay. Everyone else falls off frustrated.

    Increase inventory and fix the purchase flow if you want more great buyers.

    You can bet every single one of those buyers is also spending on Amazon.

  • Toby
    4 months ago

    If only they looked after their decent sellers too…. oh well, after 11 years plus, we are off now. Good luck to all the drop shippers, ‘zero responders’, fakers, False locationers, and business selling as privaters…. those hundreds of questions etc that you dodge, are coming back to you, because we won’t be dealing with them!
    Could ebay really be the only market place where a seller gets told by ebay to dispatch by Monday via second class, the customer told they will get it on or BEFORE Tuesday, and a INR opened weds at 6am! I think it must be…. but ina few weeks time i wont care, taking our sales and our purchases elsewhere.
    You don’t just loose a seller when a unhappy business leaves, you loose all their purchases too, and we spend thousand son ebay each year.

  • Another Chris
    4 months ago

    Spot on David, when they say “… When eBay do win a brand new buyer… ” … surely they must understand this is an illusion as they is no committment from the buyer.
    eBay need to work out their value-offer they can bring to compare & compete with Amazon’s Prime … or they risk falling between the bulk of Amazon and the Etsy niche sellers.

  • Don
    4 months ago

    Strategically it sounds sensible to me, although not really sure how this is made to practice.

    As as they do not neglect the other customers; the lower value buyers and the sellers.

    The customer experience (again, all buyers and sellers) should be excellent for all, only way to survive.

  • Mark R
    4 months ago

    eBay’s strategies aren’t going to get the likes of the Argos or Superdry accounts to buy on eBay. They are 100% sellers. And eBay is a recruitment channel for them, to try to get purchase direct, without eBay seeing a penny in the long run.

    eBay might get a % of long-term buyer only accounts to switch also to selling, but it is likely to be down to external personal circumstances rather than anything they do. For sure, heavy discounts might prompt some selling but it won’t be regular.

    The real value to eBay is the “seller-buyers” – who always have stuff to sell, and who may also buy from eBay, but probably also from Amazon etc.

    These are likely to be the self-employed, small business owners and people who sell online as a kind of long term hustle for a second income.

    The problem eBay has is that they facilitate ways to cheat and alienate sellers.

    Regular sellers are alienated every week with “not as described” free postage fraud from fundamentally dishonest people.

    Regular sellers have all sorts of hassle with eBay, for instance you can upload a tracking number to an item not received fraud attempt and still the case doesn’t close.

    Regular sellers get targeted with messages and cases which are based on complete stupidity from buyers who seem incapable of reading the advert or browsing the photos and then later on kick up about things which were apparent all along.

    It does not really matter to eBay when they screw about with pure sellers like Superdry or Argos or PC World or what not.

    But it does, with buyer-sellers.

    When eBay screws me on my service metrics in addition to nickel and diming me for free postage, there is a very low chance I will be enthusiastic about their site, and I will only buy things that I cannot get on Amazon.

    What I think eBay needs to do is follow Amazon’s approach.

    Amazon simply ban continuous bad buyers who cost it and its sellers money.

    eBay propagates bad buyers and is never seen as doing anything about them and as a seller you know the platform has a knife in your back.

  • bfl
    4 months ago

    I am getting more and more inr cases opened asap, demanding a refund (sure sign of a scam – genuine buyers want the goods). eBay support these fraudsters in their crimes by forcing me to refund. I reckon that this is aiding and abetting another person in the commission of a crime.
    I saw an article on BBC News, describing how “influencers” are flogging instructions on how to scam online sellers amongst others – https://www.bbc.co.uk/news/uk-58223499
    eBay really could tackle this if they had the will. How about a filter to block any buyer who has opened over, say, 5% of their transactions as INR cases? Or members who leave more than 5% negative or neutral feedback (they are blackmailing scum trying to get money off/back)?

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