Is eBay Dead? (And Does it Matter)

Not quite. But the auction format it built its business on may be a thing of the past. As long ago as 2009, CEO John Donahoe announced that the core auction business had not “kept pace with the changing competitive environment nor kept pace with our customers’ needs.” He outlined plans to breathe new life into the company by  expanding its ecommerce offerings and making auctions just one aspect of a bigger online shopping experience enabled by an “end-to-end ecommerce powerhouse.”

Unfortunately, they haven't quite made the leap even though fixed price selling represents almost two-thirds of sales on the site according to eBay and industry estimates. However, this change hasn't translated into more customers and visitors.

 

But with traffic and sales slowing again in recent years, and with new and old competitors like Amazon, Google, Etsy, Walmart, and Alibaba breathing down its neck, things aren’t looking so good for eBay. The Company has been making some big pivots lately, spinning off PayPal and selling eBay Enterprise to a private equity firm.

That leaves eBay with its marketplace business — which has shrunk for the past two quarters and has had declining visitors.

What’s eBay’s plan to grow revenue without PayPal and their marketing platforms? For now they're copying Amazon, expanding internationally and launching services like “eBay Plus”, a direct answer to Amazon Prime, offering free next day shipping for an annual fee.

What does that mean for you, as a manufacturer?

For now, very little.  They do not have the visitor traffic that Amazon commands, nor are they considered the 'first' place a person looks for product information.

All sales are via 3rd parties with little to no centralized quality control for products details. 

While this can often present products in a poor light, this rarely expands beyond the eBay site when it comes to reviews and lost sales. 

Bottom line - Top quality product details and review still matter more on Google and Amazon.  Many manufacturers have opted to make eBay a presence for discontinued and overstock items; keeping that 'low budget' model alive.   For many, it presents a 'safe' place to move items at a lower price without impacting the primary channels. 

Keep an eye on their activity and visitor levels. If they truly come out with some online innovations, make sure your organization is in a position to pilot and/or ramp as needed.

 

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