After listening to eBay's earnings call yesterday I had some thoughts and wanted to write them down.
Ebay's competitive advantages
It's auctions- as a seller if you are going to auction off a used electronic item, ebay is the best place to do it.
Why?
Risk of low selling price- On another site you will probably fail to get fair market value for your item because you won't have the buyer traffic that ebay gets. On eBay you might get an non paying bidder, neg'd and then NARU'd for leaving negative comments in the postive feedback, but at least you tried.
Product Depth- “You can find it on eBay”....buyers are attracted to eBay because it has just about anything you can think of for sale.
Non Competitive advantages are:
Fixed Price Listings- anyone can come in and launch a site that allows sellers to list items on their site for free and then just charge a final value fee. The incremental cost of listing an item on another site to sellers is near negligible with the multi-channel products such as Channel Advisor. They can then drive traffic to the listings through paid search advertising or comparison engines.
Seller negative brand equity- sellers are upset and would love to see eBay fail.
“Shop Victoriously”- a stupid slogan and making people think they are winners for buying on eBay just doesn't work. Maybe “Neg Victoriously” would work....I don't know.
Useless eBay metrics-
ASP(average selling price)- I don't understand why everyone is so caught up on ASP's as a whole. If the basket of products being sold changes, then most likely the ASP's change. For instance, if I sell DVD's and then one day auction off my BMW, my ASP's will jump. Does this tell you anything about how well my core business is doing? NO. Most likely the reason for the drop in ASP's on eBay is the mix of products has changed. For example, they mention that motors has slowed and other lower selling items have done better. Consequently, we have lower ASP's.
Good eBay metrics-
GMV- Obviously the ability to monetize the site is dependent on the value of goods traded on the site. GMV is very important.
Revenue- No brainer here...
Earnings- Again, a no brainer...
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1 comment:
The primary difference between eBay and it's 50lb gorilla competitors is traffic. Most other sites do well with media, antiques, junk and small items, but do poorly with major (>$200 value) items.
I see a lot of the competing sites talk about how their millions of seller listings is better than eBay, but fail to show that any real sales volume is occurring.
The ASP and STR data points are just data. Each need to be taken into context, filtering out the occasional exceptions. I wish, and have frequently requested, that competing sites offer 1/10th of the data available to eBay sellers.
Like the management or not, eBay still is the 800lb gorilla with a bunch of kids running around.
"Power Up Your Business!"
- Brian
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