October 28, 2016

eBay Plans to Challenge Amazon, Announces Turnaround Strategy


eBay’s CEO Devin Wenig has announced an eBay turnaround strategy for the ecommerce company.

At the Goldman Sachs Technology and Media Conference in San Francisco on Feb. 10, Wenig revealed that the company is thinking more as a merchandiser or retailer, instead of just an open marketplace.

“We’re changing from an unstructured to highly structured marketplace,” said Wenig. “The brilliance of eBay’s model is its greatest challenge. It’s a friction free marketplace, which means sellers can sell anything they want, and that makes it complicated.”

eBay, the huge online auction house for hard-to-find items and antiques, used clothing and cars, has in the past five years emphasized selling new products like electronics and car parts at a fixed price.

Following its split from PayPal last year, the ecommerce company has been trying to revive sales and prove itself to investors. Yet, unlike other ecommerce giants such as Amazon, eBay has had quite a hard time attracting online shoppers.

During the holiday season, eBay’s sales grew an estimated 4.8 percent, which is way below the 13.3 percent typical for ecommerce companies, according to ChannelAdvisor.

During the fourth quarter last year, the number of active buyers on the platform grew by 5 percent to 162 million. The total value of merchandise sold in the quarter was $21.9 billion, a slight increase from $21.8 billion the previous year. eBay posted adjusted earnings of 50 cents per share on revenue of $2.32 billion during the quarter.

For this quarter, the company’s revenue ranged from $2.05 billion to $2.1 billion, which is below consensus estimates of $2.16 billion. eBay’s forecast of per-share earnings from 43 cents to 45 cents is also below estimates of 48 cents.

While predicting a potentially rough 2016, Wenig said in his opening remark: “There are a lot of questions out there and I don’t have any of the answers. There are really great companies getting hit hard.” But he hopes that eBay would be one of the companies to come out on top, especially through its new  makeover plan.

Details of the plan make it look like eBay is prepared to challenge against Amazon. Changes include improving the site’s search capabilities making finding items more structured. Instead of listing all available items when a product is searched, there will now be categories such as “best value,” “brand new” and others. This will help narrow buyers’ search and provide them with better choices.

The site will also provide more product reviews to buyers to enhance their shopping, as well as more tools and data for sellers to help improve their businesses.

Another area eBay is working on is its ranking in Google search results. According to Wenig, the company is “trying to bring more stability in search results.” Employing structured data would be a top priority and the only way to solve the company website’s search optimization problem.

eBay’s search listing suffered in 2014 and into last year when changes were made to Google’s search engine. The company says the changes by Google cost it over $200 million in revenues, as the eBay site lost a huge amount of traffic and sales.

On shipping and logistics, however, Wenig revealed that the company has no plans to follow Amazon’s trail. He said, “The last thing we should do is compete with Amazon on shipping.” This means that the company would continue to work with Uber Rush, and not create it’s own delivery network. Average shipping time for an eBay order is three days.

Wenig says the eBay turnaround plan is “about making things more simple. We want to improve all of these things in 2016,” he added.

Image: ebay.com

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Lisa Froelings

Lisa Froelings Lisa is a Staff Writer for Small Business Trends focusing on marketing technology, productivity and general small business news. She has a background in business and productivity consulting including experience in human resources working for a major retailer before deciding to build her own business.

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5 Reactions

  1. If you follow any of the eBay forums you will know that the eBay sellers are constantly complaining that their sales are way down and there aren’t the buyers that there used to be. As a collector-buyer I have stopped running 80% of my weekly eBay searches. I faithfully ran these searches since 1997. Two years ago I had to stop when John Donahoe gave us the nearly unlimited free listings, and free listings allow a seller to set unrealistically high prices on items because if there is no sale, they just relist it for free. From then on I could only run the searches that were the most important to me. I know that I’m missing a lot of things to buy, but when one search gives 5 pages of results, and a large proportion of those are relisted items I’ve seen for many months, I don’t have the time to look at everything. I am a very careful searcher. I’m not going to miss an item in the categories that I follow, and in the keyword searches that I bookmark and then run every week. If I see an item and don’t purchase it, there is zero chance I will ever purchase it unless the price drops at least 50%. So eBay, why make us see the same unique items over and over and over again in the antiques and vintage collectibles categories? All we ask for is a filter to prevent us seeing relisted items, or a filter that segregates the relists to the bottom of the page. It would be easy to code for. Because there is so much stuff on eBay, and so many relists, we buyers who have hung around all of these years are ready to throw in the towel. I had a friend call me nearly in tears. She has over 20,000 eBay feedbacks, nearly all from purchases, and she asked me if I didn’t know of some way for her to run her keyword searches and have them return only the items that had never been relisted. I told her the relists were also driving me crazy. I’m sure we aren’t the only buyers who can’t stand searching on eBay anymore. And they ask where all of the buyers have gone.

  2. Another mental midget genius wants to turn e-Bay around by making it a poor copy of Amazon. Lets see Meg Whitman wanted to turn it into another Overstock .com – so much for that idea. Then Donahue let Carl Icahn rip away the most profitable part of the company -PayPal. Old Carl is real good at destroying companies. In the meantime the greatest coin, stamp, antiques, and collectables company ever forgot what its core was about. Now Bidstart, Zillions of stamps, VCoins, and stampauctionnetwork among many others are eating your lunch and you are clueless. You gave it all away by your actions and created a vacuum filled by all of these. Amazing! If I want to buy books and gifts I go to Amazon. Target and Walmart supply essentials and groceries along with Sam’s and Costco. Electronics come from Best Buy. Notice the mixture of brick and mortar with online? Some things you just have to see or try on.

  3. eBay has a LONG haul ahead of it, if it wants to climb out of the hole that the last CEO created. He was famous for “innovative disruption” and eBay’s business under his tenure surely did experience MAJOR disruptions.

    eBay’s faults though are its own. From its rude staff, condescending customer service agents, abusing its sellers, major platform down times and more – those are just SOME of the reasons that eBay is where it is today.

    eBay has 32,000+ employees, and only GD in his heaven knows what they all do, since they arent there to help sellers (or even buyers).

    eBay’s selling tools are antiquated (circa early 2000’s), and the first thing the new CEO did was worry about changing the logo.

    eBay also cant decide if it wants to be a managed marketplace or a venue – and its answer changes depending on who asks it that question. When dragged into court, eBay will tell anyone who will listen that they have no control over anything – they are just a venue, but when its eBay vs its sellers – its a managed marketplace and they give themselves the right(s) to do as they please – with YOUR money.

    eBay has possibly the WORST record when it comes to dealing with its sellers – in all parts of its system. eBay, for example, in its TOS/UA states that your listings may not be seen 24/7 – at their whim and fancy. Is this 1995 or 2015? Do they not have enough server capacity to display the listings a seller makes 24/7?

    eBay also allows open seller abuse when it comes to returns. Backed up by the mantra “we are separate on paper but not in reality with Paypal”, eBay forces sellers to take losses on returns “since loosing money is part of business, so shut up and take the loss”. Lord help you though if you choose not to pay your seller fees!

    eBay of course also “helps sellers along” by putting competing ads in your listing(s). It wouldnt be so bad if it was for Coke or Ford or Motel 6 – but they are from competing companies! eBay (the little secret is now out) is more interested in its ad revenue then its sellers.

    Politics aside, Google makes on darn good search engine – yet eBay went to rewrite its own … why? Simply because Cassini (last one was Voyager) was written to be “Pay for Play” – its HARDLY organic. It also was programmed to show you listings EBAY thinks you want to see, not the actual ones you are looking for!

    There are alot of problems over at eBay – none of which will be solved by forcing people to put UPC codes into their listings.

    Devin Wenig claims he wants to reconnect with sellers – ok fine. So far though, it seems that all eBay wants to connect with …is a seller wallet.

    When eBay gets serious and gets its act together, it can be and will be an awesome company. Until that time, it will just be a company that lives in Amazon’s shadow.

  4. I have been selling on eBay for 5 years and made a living off it until this past 6 months. I have carried the same kind and amount of inventory over the past 5 years. Have advertised more than ever this past 6 months. My sales have dropped 80% over these past months. Translation I have run a 22K deficit in cashflow to keep going and investing. I am going to be forced to file bankruptcy shortly thanks to eBays lack of traffic and sales. Google : eBay slow and you will see a forum that will tell you everything about this company and how sellers who have been with eBay since 1998 are going bust. eBay will die this year….

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