Ebay's bleak outlook

[tobyshitzu]

EBay Inc. (EBAY.O 0.37%) gave a lackluster sales forecast for the third quarter, signaling leaner times may be ahead for the company following a round of layoffs.

https://www.bnnbloomberg.ca/ebay-s-bleak-q2-sales-outlook-signals-lean-times-ahead-1.1110403#_gus&_g...

More coupons ahead...

[hlmacdon]

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@reallynicestamps wrote:

Yet, I believe the shares have further to fall.

But the price of shares has nothing to do with eBay's success as a business. 

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Although the focus of the article is on the stock value, it has a analysis of the underlying issues by looking at the recent earnings report. Buyers are precisely the problem. Anemic user growth is a major issue combined with a rising cost base which hasn't translated to revenue growth.

We've seen what, 600-700 layoffs in the last month or so? At a casual view it looks like they are trying to control that cost base to free up marketing dollars. I always get suspicious when "retailers" or vendors start trotting out the discounting card and focus on increasing advertising revenue to drive top line revenue. More so when that advertising revenue is coming from squeezing sellers, not external sources.

It isn't so much of a case of them going away as it is them going nowhere in particular. Coupons are only compelling if a new buyer has a reason to use the marketplace in the first place. The fidget spinner impact is worth considering in light of that. New users are attracted when there is something they can't find elsewhere. Remember when that was a core ebay competency?

[Anonymous]

Just read this article.  eBay needs to stop "expecting" too much for $$$$$$.  eBay needs to focus to make our auctions more search availability, etc.  No need to be so greedy as they already earn $1 Billion and yet they WANT more $$$$$$$$$???????????????!!!!!!!!!!!!!!!!

[retroman_studios]

One of the key issues here is that eBay feels it has to keep up with the Joneses. Just because everyone else is doing it...oh wait...yeah we gotta do it.

The issues lies in the fact as mentioned, eBay is not a product specialist. The other companies that are going product based are before anything else, a retailer with physical product. Because they know retail, it puts them in a very good space.

So in fact, what used to make eBay unique.....is now gone.

The laying off of workers is a problem for a few reasons. It's not a long term solution, the workload of those workers will translate into bad experience for buyers and sellers alike, leading to market dissatisfaction. What further drives that nail in the coffin further will be if they outsource the work or simply dump it on other staff. Or in the case of volunteers to help with product catalogue, simply con someone else to do it under the pretense that hey someone's gotta do it might as well be you.

Marketing dollars only work if your market acquisitions become long term investments. If each customer costs $15 in the case of recent sales, then those customers would need to buy an additional $150-$200 to make up that initial cost.

I don't really see that happening much.

A better approach is to fix the issues that need fixing, listen to the people that pay your salary otherwise within 5 years the company crumbles and analyst have a 60 Seconds style program going over the brief history of online sales and how the bubble went pop.

[momcqueen]

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@widgetc wrote:

eBay wants to be like the river. It won't work. That niche is taken.

What eBay did well was the collectible, vintage and old stock hard to find items. Those are almost the only things I purchase here. Also I don't want "free" shipping. I often purchase multiple small items and I don't want shipping costs built into each of them. I want to get a combined shipping invoice after purchase.

For me eBay is moving completely in the wrong direction

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I cannot agree with your more vehemently. When I was buying here, my whole modus operandi was to find a seller with multiple items I wanted and buy them all to economize on their postage rate through combined shipping. Free shipping is the antidote to that. 

[lotzofuniquegoodies]

If there are  inaccuracies  in the constantly updated product catalog along with the competing fake products &  added reviews, it's not doing anything to help the current buying and selling experience. Personally, the last thing I want are product reviews being added to my listings that have not been substantiated or may be entirely false and misleading.

https://www.computerworld.com/article/3290370/artificial-intelligence/fake-products-only-ai-can-save...

http://abc7chicago.com/shopping/how-to-spot-fake-products-online/3441116/

https://abcnews.go.com/GMA/News/video/concerns-fake-reviews-amazon-54714663

http://www.cbc.ca/doczone/episodes/counterfeit-culture

Are any of these problems affecting your listings?

-CM

[hlmacdon]

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@lotzofuniquegoodies wrote:

If there are  inaccuracies  in the constantly updated product catalog along with the competing fake products &  added reviews, it's not doing anything to help the current buying and selling experience.

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I honestly don't think ebay cares at all, as evidenced by them continuing to crowd source all of this information, relying on volunteers. They know this a problem at their main competitor Amazon who smooths this over with a liberal return policy. This is likely one of the reasons why ebay has implemented a no questions asked buyer is always right return policy of late. That being said I fully expect this problem to be far more rife here at ebay than Amazon as ebay seems to do precisely nothing about bad actor sellers gaming the system. Shy of racking up VERO complaints or a continual track record of non delivery, most bad actors can flaunt the majority of stated policies here and sell on. 

[femmefan1946]

@hlmacdon

Yet, I believe the shares have further to fall.

But share prices reflect the hopes and dreams of shareholderss, not the actual business.

No matter what the analysts may think is happening with a company, its purpose is to make enough money to pay its workers and produce a product (for eBay a website) that satisfies its customers.

EBay doesn't pay dividends on the money it makes. Possibly they put it back into upgrading the site. We can hope.

But eBay makes no money on its stocks.

But if a shareholder wants to make money on eBay he wants the shareprice to be volatile.

If he bought in January and sold in March, he did quite nicely-- the share price rose from about $38 to about $44. That's a nice profit over three months.
And if the same punter buys now at about $34 he can expect eBay to do what it has historically done-- rise sharply by the next quarterly report.

Then he sells and takes his profit again.

The analysts can want the price to be higher, but every share that sells has a buyer.