eBay Fixated on Fixed Price as Revenues Decline

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AuctionBytes Blog
News and insight focusing on
ecommerce and the online auction industry
by Ina Steiner, Editor of AuctionBytes.com

April 24, 2009

eBay Fixated on Fixed Price as Revenues Decline

By: Ina Steiner

Fri Apr 24 2009 024:53:29

I'll say one thing about the online tech-news site The Register - they aren't subtle, as in this headline published after eBay and Amazon released first quarter earnings this week: "Amazon shames eBay with 24 per cent profit bulge." eBay was not alone in seeing a sales decline, however - Overstock.com experienced an 8% decrease in sales in the first quarter.

The Register's post was a far cry from this Bloomberg article whose author was impressed with eBay's performance, starting off with, "EBay Inc., the most-visited U.S. e-commerce site, reported sales and profit that beat estimates, a sign that efforts to overhaul its auction and fixed-price retail site are working."

BusinessWeek was more matter-of-fact in its assessment: "When it comes to overall market share growth, one rival that Amazon continues to steal share from is eBay, analysts say. One highlight of the quarter was the growth in the number of products sold by other merchants who list their products on Amazon's site. Those sales represented 32% of overall Amazon revenues, up from 27% in the fourth quarter and 30% in the year-earlier quarter."

Bloomberg said Donahoe overhauled listing fees last year and encouraged sellers to offer more fixed-price items. Sell-fulfilling prophecy - as we reported yesterday, Fixed Price format grew 12% during Q1, while auction format declined 20 percent (the law of unintended consequences?). But despite the fact sales are down, Donahoe's not changing course: he told Bloomberg he expects fixed-price sales to account for as much as 70 percent of the site's sales within a few years.

Comments (46) | Permalink

Readers Comments

eBay Fixated on Fixed Price as Revenues Decline

by: Scriptorical

Fri Apr 24 09:21:27 2009

>>>Bloomberg said Donahoe overhauled listing fees last year and encouraged sellers to offer more fixed-price items >>Donahoe's not changing course: he told Bloomberg he expects fixed-price sales to account for as much as 70 percent of the site's sales within a few years<<<

I read on another site where Donahoe was embracing auctions again. He needs to make up his mind or these affiliates need to get their stories straight.

One thing is certain. His policies are not working and he will continue to loose market as he continues his disruptive innovation.

eBay Fixated on Fixed Price as Revenues Decline

by: i'd rather not say

Fri Apr 24 09:27:23 2009

it is very easy to create a 70% sales figure for fixed price items when you turf out all your tried and true auction sellers.

eBay Fixated on Fixed Price as Revenues Decline

by: confused

Fri Apr 24 09:31:32 2009

There are so many conflicting reports about ebay's so-called plans. The fact is that no one knows if there is a plan and Donahoe spits out information that tries to fit with whatever is happening now.

I sell both fixed price and auctions. Auctions are definitely selling better than fixed price. All I seem to get with fixed price are offers so far below cost it becomes insulting and a waste of time.

eBay Fixated on Fixed Price as Revenues Decline

by: and*the*horses*you*rode*in*on

Fri Apr 24 09:41:49 2009

"But," he added, "we're not doing anything different than we've done in the past."

I wish eBay could have been the one to say that instead of Amazon, but nooooooooooooooooooo.

HO and NO gotta GO!

Neg Meg 2010

eBay Fixated on Fixed Price as Revenues Decline

by: OOAK_handcrafts

Fri Apr 24 10:10:23 2009

I find the fixed price format works extremely well for me.

As for eBay I don't think they know what they are doing. I think the attitude is "let's change something then everyone will notice us and start the buzz"

I don't think that approach is working ...

eBay Fixated on Fixed Price as Revenues Decline

by: Jonathan Friedel

Fri Apr 24 10:17:09 2009

The bottom line is I do not trust eBay the market place or eBay management. I prefer to shop and sell on Amazon and I think this is a growing trend; a direct result of eBay's terrible management team.

I sell on eBay, Amazon, Fulfillment by Amazon and my own website. While Amazon has it's problems, I can trust them and generally they know what they are speaking about.

eBay has done everything it can do to drive me and my customers away. They have indeed succeeded. When I sell something on eBay now I have to re-think the steps to process the order... such a rare event.

There used to be 10 competitors selling my product on eBay, there is now only 2 of us. There used to be 3 of us on Amazon, there are now 9.

Those of you who defend eBay, I put you in two categories... 1. the group that is making more money because you now have less competition and 2. the group that just defend eBay for the sake of defending something when you really do not see past the fogged up window.

The problem for the group that is defending eBay as a result of the changes helping you make more money, the changes are not enough to keep the company alive in the long run and then you will be joining the rest of us at Amazon.

Is it too late to fix eBay? I don't know but I do know every day the current management continues run eBay the chances are less it will make it another few years.

WHo is to blame? Now this is a really good question. The way it is supposed to work is stock holders elect the board. It is the same for so many of our recently failed companies in the USA. It is so hard for a stock holder to actually have a say in things that a few people in all these big companies pocket the money and screw the stock holders. Perhaps it is the fault of our capitalist marketplace that we do not enforce rules and stockholders can oust the bad people when it needs to be done...

eBay Fixated on Fixed Price as Revenues Decline

by: jake

Fri Apr 24 10:36:02 2009

Jonathan Friedel

Well said right on the money.

eBay are fools , it is doomed

eBay Fixated on Fixed Price as Revenues Decline

by: Lyn

Fri Apr 24 10:55:30 2009

What "within a few years" would that be, I ask, with auction sellers peeling off at 20 percent per quarter?

Some people really do enjoy auctions. Too bad eBay has so unintelligently sought to knife itself in the throat on this area, because a large market has just moved elsewhere to have its fun. BTW, most of those buyers are former sellers, who have been royally pissed off at all the face-kickings they have received over the past two years.

Ebay deserves its whipping and all that whining about the strong dollar (oh yeah? did that happen when I was sleeping?) is just BS.

eBay Fixated on Fixed Price as Revenues Decline

by: Too bad, so sad

Fri Apr 24 11:23:42 2009

I never shopped Amazon before because they were just too slow to load, but now it's the first place I go after spending an hour one day struggling through all of the manure the ebay site throws at you and your computer when you try to shop there.

And if I'm looking for vintage or collectible pieces that used to be plentiful but are no longer anywhere to be found on ebay, I go to Bonanzle.com or Ecrater.com

Too bad, so sad. Bye ebay.

eBay Fixated on Fixed Price as Revenues Decline

by: DUH!

Fri Apr 24 11:28:56 2009

News to me that ebay is 'fixated' on fixed price. Stores provided lots of fixed price listings and they treated us like dirt and apparently 'stores' got left out of the reporting.

I'm just so glad that I took my store and moved elsewhere (ecrater) where I'm doing just fine! Thank you ebay, for forcing me into such a move that is so good for me. I love selling stuff and not having to fork over 12% to ebay, it sure makes a difference on the balance sheet.

eBay Fixated on Fixed Price as Revenues Decline

by: Kal

Fri Apr 24 11:44:09 2009

Unfortunately ''investors'' believe what they read in these journals, magazines, and what the ''analysts'' have to say. Like it or not.

Watch for a ''knee jerk'' reaction to this quarter's numbers and by the comments made by the media. Management will perform some 180 degree move soon. Mark my words.

''Some people really do enjoy auctions. Too bad eBay has so unintelligently sought to knife itself in the throat on this area, because a large market has just moved elsewhere to have its fun.''

Auction seller here! Can't use any other format. I'm still making sales, but they are quite below par. The ''right'' items still sell amazingly well, but those items are now few and far between.

But my question to you is WHERE else did everyone go to have their ''auction fun''? I haven't found another site. Most of the other alternate sites are fixed price. Oh, which by the way just legitimizes Doughnut-Holes contention that BIN is the ''way of the future'' and that he must keep the company moving that way.

eBay Fixated on Fixed Price as Revenues Decline

by: Scriptorical

Fri Apr 24 11:54:48 2009

@ Kal

The alternate sites have not developed a really good auction format. I have spoken with some and they have told me that they have things in the works but that was months ago and nothing as yet. GoAntiques has a live proxy auction to which small sellers can sell their items.

If just one of these sites cloned an eBay style format auction page they would take off. I think their afraid to. We consign now to auction halls, have our own website www.scriptorical.com and list on Bonanzle. For what we sell Bonanzle is limited in buyers. We've sold more off our own site, but find the buyers are more choosy.

eBay Fixated on Fixed Price as Revenues Decline

by: Bezos Now #1

Fri Apr 24 12:31:59 2009

Finally Jeff Bezos has beaten ebay, and next quarter will be more of the same, more of the same, and more of the same.

I don't know what ebay's master plan is, nor do I really care anymore. Suffice to say I am not tagging along with a loser.

I am done, do you hear me ebay? I am done changing my auction templates every 6 months for a loser like you.

They spin and lie till they are boxed themselves into a corner. Now what?? What are we supposed to believe after being lied to for the last 4 years??

"NOTHING EBAY SAYS MATTERS"

I have some advice for any company with a monopoly on the market like ebay "HAD AT ONE TIME".... That advice would be to aggressively serve your paying customers (sellers) even drop prices across the board if it strongly affected
your position on power.

Ebay could do no wrong to prevent growth at one time, even the fraud on the site was tame in comparison to the good will people felt towards ebay. the sellers (ebay customers) kept ebay alive and well, and that is what kept ebay at the top of the heap. It certainly was not the vaulted management of this sorry corporate pus sack that did anything. It's a shame that a CEO struts around taking all of the credit for everybody Else's hard work. Now she wants to feed her ego on California, god forbid...

I'm personally ashamed to have my website associated with ebay in any way. The ebay label is now mud. Why would a company destroy a good name (probably never deserved) a monopoly on power, etc. all for not.

Ebay has no chance, and I mean no chance of catching Jeff Bezos at this point, NONE!! Even Overstock for that matter! I feel the frustration of many fellow sellers as I watched ebay missing opportunity after opportunity to grab complete control of the e-commerce market. They are "complete idiots" and now they are running out of time despite any long term master plans.

Looks like Jack Ma will be buying ebay when they get through with the changes. What little is left of it...

You can say one thing for ebay, they'll made a lot of money right up to the bitter end. That's just a very short sighted approach when you had the distinct lead, and a hammer lock on the market 2 years ago.

Completely Insane...

The ebay culture is doomed. They could not do the most mundane task correctly.
It has been said that you need to get rid of 30% of a companies employees to change it's culture. Ebay is on the train tracks to nowhere - FACT!!

Go ahead ebay promote some more clones that think they're all that, can do no wrong. Egotistical maniacs that are all wrapped up in there own false ideals.

This ought to be fun to watch....

Just stop telling me and everybody else how great you are. I'm sick of your bullshit. You make alot of money, whoopie, for how much longer will it last?? Then you'll be online history.

R.I.P.

eBay Fixated on Fixed Price as Revenues Decline

by: Patricia

Fri Apr 24 12:44:29 2009

I cannot understand the analysts. They are out there selling the virtues and pluses of Ebay as though they were on Ebay's payroll! Silly investors are eating that garbage up and buying this hapless stock! Truth is Ebay's core is failing miserably. They can't hide behind the dollar because Amazon isn't hiding behind the dollar - they have to put the blame right where it belongs...smack in Donahoe's hands! Unless that position is replaced Ebay will continue failing. Paypal alone can't hold Ebay up and hiding behind Paypal's success won't last much longer. Skype will either be spun off or sold. What then? Why are these analysts pushing Ebay as though it were the find of the century?

Maybe Donahoe will eventually end up with a totally different Ebay but even if its a success how many years will it take Ebay to recoup all this loss???? It absolutely makes no business sense!

eBay Fixated on Fixed Price as Revenues Decline

by: seniorsportsfan

Fri Apr 24 12:52:23 2009

My take about what is happening at ebay is that Donahoe will wring every dollar of revenue and every ounce of what little good will remains out of the ebay marketplace.

At the ebay newly created landfill he is cutting off communication between buyers and sellers with automated robotic policies while saving dollars by not fixing operational problems, not installing customer service, and not advertising the marketplace.

He has announced that Skype will be spun off, and as soon as paypal's image is spruced up by dumping the cost and stigma of paypal's dispute process onto the ebay marketplace - Paypal will also be spun off.

Once Paypal becomes a stand alone expect him to sell what's left of the ebay marketplace to the highest bidder - probably a foreign entity.

The he'll finally move on.

As long as "analysts" turn a blind eye to the decline of the ebay marketplace and as long as investors see strong profits no matter how they are maintained, Donahoe can do no wrong as far as Wall Street is concerned. The collateral damage being done to its users is unimportant in Donahoe's scheme of things.

eBay Fixated on Fixed Price as Revenues Decline

by: nora

Fri Apr 24 13:15:44 2009

Wall Street has a disconnect with reality, as we saw in the Tech Bubble in 2000. Stocks with absolutely no earnings were shooting to the moon. One of the things Wall Street likes is story stocks. Then there are stock Technical Indicators, which people trade on, which have nothing to do with a companies Fundamentals. Sometimes there is alot of cash sitting on the sidelines that has to be put to work. The stock Market is an interesting game. We all did see that Ebays core Market Place is shrinking. In an up Market, no one cares; in a down market the dirt gets exposed.

Also, I found this auction site, LBD Auctions, which is not getting much exposure.

http://littlebitdifferent.com/index.php

I am in no way connected to it other than I thought it was very well laid out and wanted to bring it to the attention of others to see what they thought. It is based some were in the UK, but is a worldwide site. No listing fees or Final value fees. They have some listing upgrade fees. I would like to see what others thought about this site and it is an auction site.

eBay Fixated on Fixed Price as Revenues Decline

by: Fruity

Fri Apr 24 14:50:18 2009

Wow holy late bloomer award goes to John Donahoe for realizing that Fixed price was taking the bulk of the marketplace. It only took him what, 3 or 4 years to figure it out? If actions like this is what qualifies people to run SEC corporations like ebay, we all could run these companies and only cost the shareholders what... 50 grand a year? What did you get from shareholders last year John Donahue for being a schmuck?

eBay Fixated on Fixed Price as Revenues Decline

by: Steve Young

Fri Apr 24 16:40:26 2009

It’s interesting that eBay’s fixed-price sales are up 12% while auction sales fell 20%, when we at Wigix have all along believed that the fixed-price model is the most buyer friendly. Our structured catalog not only makes it easier for buyers to find and research their products, but also find sellers with the right price!

eBay Fixated on Fixed Price as Revenues Decline

by: nora

Fri Apr 24 17:23:58 2009

Fixed price is not necessarily better. It all depends what you are selling. Ebay is charging high fees for Auction Format with lower visability, thus the change in balance of Fixed price and Auction sales. The ironic thing is that Ebay was the best Auction site is often refered to as the Auction Site and that is what they want to do away with.

eBay Fixated on Fixed Price as Revenues Decline

by: Auld Cynical

Fri Apr 24 19:44:45 2009

Really, who cares anymore. It's going to take two years to recover from disruptive innovation even if it were reversed tomorrow. Things have moved on and there plenty of trouble free buyers out there now. I can't be bothered waiting for sense to prevail. Ebay will go under when it goes under and then things will get back to normal. Maybe five years. Maybe never. Time to move on.

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