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The New eBay: Bland, But Thriving

ebay1The past week was one of the best eBay (s ebay) has seen in a long time. AT&T (s t) said it will soon allow VoIP calls over its 3G network, a move that will boost Skype’s allure as eBay moves to sell it. And a federal appeals court dismissed patent claims against the voice, video and messaging application. But more importantly, evidence is emerging that the long, awkward and painful turnaround of the marketplace business is really underway.

Sales through some 3,000 eBay merchants rose 4.6 percent in August and 5.1 percent in September, according to ChannelAdvisor, an e-commerce services company that tracks data from its clients (and that eBay holds a minority stake in). That compared to sales declines in each of the the previous 12 months. That reversal of fortunes helped prompt Kaufman Brothers analyst Aaron Kessler to upgrade eBay to buy from hold and to lift his price target to $29 a share from $22. (Shares of eBay closed Friday at $24.42, up 7.6 percent on the week.) That comes on the heels of two other upgrades, from UBS and Bernstein Research, respectively, as well as a revised price target from Barclays.

In his report, Kessler noted that:

The ChannelAdvisor data is indicating a low single-digit increase in U.S. same store sales for 3Q – we would note that over the last three quarters the ChannelAdvisor data has shown a strong correlation and, on average, tracked 2 percent above the reported gross merchandise value data.

Consumers may finally be warming up to the new eBay. The company’s meteoric rise as an auction-oriented e-commerce site turned it into a cultural phenomenon, but cultural phenomenons can fade away as quickly as they emerge. And while CEO John Donahoe often said that he didn’t see Amazon (s amzn) as a chief competitor to eBay, the fact is that many bargain hunters were, in the long run, looking for the kind of seamless, intuitive interface and security they could easily find through Amazon and its merchants.

Donahoe’s solution was a top-to-bottom renovation of the marketplace, redesigning pages and beefing up search, downplaying auctions in favor of buy-it-now sales, and rewarding top sellers while driving away smaller ones. For a couple of years, the result was a messy muddle. Consumers lost their sense of what eBay was, exactly, and shopped elsewhere. Many alienated sellers protested angrily, creating a protracted PR nightmare for the company.

But like many messy renovations, the final result is often worth the wait. The new eBay offers a compelling alternative to any e-commerce site out there, including Amazon. Free shipping, easy access to trusted merchants, a broad inventory and an intuitive and useful search interface are starting to lure back not just consumers, as ChannelAdvisor’s data shows, but also investors. eBay’s stock is up 74 percent this year, compared with a 35 percent rise in the Nasdaq.

eBay still has a long way to go. Skype is still facing a daunting lawsuit from its founders, one that could complicate eBay’s plans to sell it off. PayPal will face more competition from Google (s goog) and, reportedly, Facebook and Apple (s aapl). And its marketplace business needs to nurture the recovery that has taken root. During its troubled years, many people (including me) knocked the company and questioned its prospects. But Donahoe’s turnaround looks to be working.

Gone is the fun and freewheeling arcade of auction-mania that drove eBay’s success in its early years. What’s left is something blander — but more importantly, something that’s beginning to resonate with online shoppers.

18 Responses to “The New eBay: Bland, But Thriving”

  1. try
    I am trying to helping the small sellers and make selling and buying fun and safe. I have a lot of work to do still at the site. I would like any sellers to check out my site and send me some feed back.
    Wanderby is not just another auction site.

  2. PhilipCohen

    This rubbish is straight out of the eBay Department of Spin.

    eBay activity is up? That must be all the pro sellers buying their own stuff; but I doubt that eBay will be getting any FVF therefrom; the shills know how to use the “seller did not pay” excuse. The Ho will undoubtedly claim that user numbers are up again—every unscrupulous auction seller now has 10-20 shill bidding IDs.

    But there is not much point in all that increased activity if there is no revenue therefrom …

    I’ll keep my powder dry until the September quarter’s “profit” is announced. I’m putting my money on a further reduction in Marketplace revenue and a savaging of profits that not even the Ho’s Department of Spin will be able to put a smiley face on. And, the pink-slipping of 400 Teutons will ake little difference to the cancer eating away at eBay.

    Actually, it’s the Ho’s and his fellow idiots’ salaries that eBay’s board should be thinking about saving …

    If you want to know some of the reasons why this disingenuous, unscrupulous, criminal organisation is going down the toilet see

  3. Since this new search engine started my sales have droped by less then half , i have over 700 items to revise , ebay should have advised all the sellers of this change and gave us time to prepare, suddenly most of my items shows up at the end of the search.

    I even tried doing free shipping option and thats not doing much either , all it does is make ebay more money, like everyone else i been strugling with the rating system forever, what buyer gives five stars even to the best service most people are like sure 4 out of 5 cowboy , that system needs to change for the sellerS, we all know out of every 500 customers there is the never satisfied mf who will leave you bad feedback and bad ratting for the hell of it. Its you and your luck .

    Trusted sellers after all the work i did i m not trusted any more, i been looking at alot of the trusted sellers i have better feedback and better sales and rating then alot of them, i dont get this new system at all.

    Ebay is all about taking your money now, they cut down there customer service to seller i couldnt find there phone help line the other day or there chat.


  4. The past week was one of the best eBay has seen in a long time. AT&T said it will soon allow VoIP calls over its 3G network, a move that will boost Skype’s allure as eBay moves to sell it. And a federal appeals court dismissed patent claims against the voice, video and messaging application. But more importantly, evidence is emerging that the long, awkward and painful turnaround of the marketplace business is really underway.

  5. Stevie b.

    Yes, ebay may have changed, but as far as antiques and collectibles go, it’s for the worse. I’ve been basically a buyer for getting on for 10 years and it’s consistently gone downhill. I can’t be bothered to list all the things that hack me off – previous posters have done a pretty good job and ebay is no longer worth my time and effort to add more – been there and tried with others who cared to reason with ebay to no avail on the various Community Boards. Good luck to them in their new, revamped enterprise, but it’s no longer the ebay that many of us knew and (gulp!) actually loved.

      • Stevie b.

        Nadine – good question, probably an inadequate answer. After 20 years interest in art nouveau/deco lustre pottery & ceramics, glazes and quirky figures, i’ve kinda gotten to the end of the road. I still go to the odd antique/collectors fair here in the UK and browse ebay cos i need to keep a vague eye on values as it became part of my strategy to divesify out of £s – after all, knowledge is power and I’ve developed a fair amout of knowledge in my chosen area and had some cracking buys. Whether they will remain cracking buys ( and not crackpot ones…) remains to be seen in the current and anticipated economic environment – time will tell!

  6. Let me point out how ridiculous eBay is being when it says it is promoting “Trusted” sellers:

    I have been selling on eBay for more than five years and have over 5000 feedbacks.
    Does that make me trusted? No.

    My positive feedback percentage is 100%.
    Does that make me trusted? No.

    My Detailed Seller Ratings are 4.9/5.0 across the board.
    Does that make me trusted? No.

    Over the past 12 months 0.65% of my customers (or maybe one customer with multiple purchases) was unhappy with his/their shipping fees, though these are always stated beforehand via the Shipping Calculator (and are actually lower than my real mailing costs, which customers don’t know unless they mail packages themselves). Or perhaps one or more customers hit “1 star” instead of “5 star” by mistake. It doesn’t matter. The cutoff level of bad Detailed Seller Ratings in any category for the new “Trusted Seller” program is an incredible 0.5% over the last 3 or 12 months, depending on sales volume. Yes, you read that right. If you have 200 transactions, each rated in 4 categories, you are allowed only one single low 1 or 2 star rating to stay “trusted”. Two low ratings, and you become untrustworthy.

    So eBay says I am an untrustworthy seller.

    But they are still happy to take my money.

    Just not to guarantee any particular level of service.

  7. Stiv Bator

    I read the article and thought, eBay must have done something fantastic in the last months since I last used it.

    Then I went to and, nope, same old.

    PR piece?

  8. Totally agrees with Ric

    Ric hit the nail on the head.

    A few things to add…. eBay has totally eliminated the founding concept of a level playing field. eBay incentivises large sellers with discounted fees and raised placement, then slaps small sellers with full fees and what they call standard placement. That standard placement means the listings by those sellers will appear somewhere after eBay’s favorite discounted sellers.

    eBay sells listing space, then disadvantages those paid listings causing sellers to have to relist items time and time again before they sell.

    eBay increases profits by disadvantaging listings. Items rarely sell the first timne around due to lack of visibility causing sellers to have to repeatedly relist the same item multiple times and pay fees each time to eBay.

    Is that ethical??? Nope, not that eBay cares about ethical standards when dealing with sellers. If eBay needs to choose between ethics and collecting fees, they will chose fee collection everytime.

    eBay has become deceitful. They have promoted the concept of “free” shipping and tried to brainwash sellers that buyers prefer to have shipping costs combined into the selling price.

    How convenient for eBay that they reap the financial benefits in this effort financially at the seller’s expense.

    Sellers that list shipping cost separately from the sale price do not pay any fees on those costs. When shipping is combined into the selling price, eBay then turns around and charges final value fees on the total of the closed sale.

    How can users trust a company that distorts facts in order to financially benefit from the distortion? The simple answer is they can’t.

    Ric is right…..Sellers can’t trust eBay….Buyer’s can’t trust eBay.

  9. Reads like pablum straight out of eBay’s Public Relations Department or a science fiction novel.

    eBay is still a mess:

    Search does not function properly or seamlessly across the platform.

    Roll outs of new features are often loaded with bugs despite months of preparation prior to release.

    IT implementation is an embarrassment. Glitches have become so commonplace that eBay no longer posts issues on their system announcement boards to avoid becoming a laughingstock and to conceal issues from the public.

    Rules and policies are so fluid, even eBay’s own self proclaimed seller advocate has recently misinterpreted at least two different policies and advised sellers incorrectly as a result.

    When eBay’s most experienced staff has the wrong answers, how are buyers or sellers supposed to keep informed?

    Sellers of all sizes are kept off balance; unable to implement solid consistent business plans due to perpetual changes in policy and search, making the core marketplace most unpredictable, unstable and unreliable. Buyers and sellers abandon eBay out of frustration as a result.

    The remaining sellers that brought eBay to the dance are discriminated against in search, while eBay’s favored Diamond Sellers flood the marketplace with over priced merchandise and knock offs from China and receive elevated search exposure.

    Feedback and Seller Ratings are manipulated for Diamond Sellers to hide poor performance and buyer complaints, allowing the preferred class of sellers to continually to disappoint buyers while smaller sellers who deliver great service see their listings hidden from potential buyers.

    Small sellers continue to pay high fees to place listings while Diamond Sellers receive free listings and discounts on Final Value Fees.

    eBay’s CEO still has not realized or appreciated that the small sellers in it’s marketplace maintain separate accounts for buying and selling and were among eBay’s most loyal buyers… until they were treated by eBay’s CEO like something one scrapes off their shoes after stepping in it.

    With staffing reductions, eBay’s live help customer service department is severely understaffed. Buyers or sellers seeking live help assistance find frequent waits of 45 minutes or longer before being connected to an agent.

    eMailing eBay for help is an adventure as well. Many times, eMails sent through eBay’s own system arrive in eBay mailboxes blank. eBay customer service does not even have the courtesy to inform users their email was received but was blanked out by eBays glitchy system.

    The 24 – 48 hour response time is missed more times than it is hit when email does get through.

    Users that post dissenting opinions about changes on eBay’s own discussion boards find their posts deleted. In some cases, users are banned from posting in order to silence objections.

    eBay’s incompetent management allows, permits and condones these issues while collecting salaries inconsistent with the performance of the company. To protect their outrageous salaries, management continues to trim customer facing staff and negatively impacting service.

    eBay is a slowly sinking ship, captained by a CEO that continues to blindly lead the ship straight toward the iceberg. John Donahoe and the majority of his management team have failed to understand the fundamentals of the company from day one.

    This explains the past 18 months of declining year over year sales, and why the core marketplace has become a disaster.

    eBay desperately needs new management which is tasked with reversing the failed policies which are dragging the company down.

    Until new management is positioned and empowered to get eBay back on course, buyers and sellers will continue to lose trust and confidence in the company.