The Evolution Of Ebay Stores Into Corporate Profits Sept 11, 2016 12:24:41 GMT -5
Post by Sea Dogs Beach on Sept 11, 2016 12:24:41 GMT -5
Written By Jim Allan | 8-29-2016
Everyone knows what Ebay is. Ebay was the sensation of the 2000's with Meg Whitman at the helm of the corporation. Meg Whitman was hired in March of 1998 and kept Ebay loose and easy with a fee structure that kept all the auction marketplace wannabes at bay. The buyer traffic was plenty as a huge base of sellers were the cheerleaders bragging to their friends about how they made a sale or sales that were pleasing to them. Sellers and buyers were also running around their towns and cities flashing their Paypal credit cards as if they were in grade school showing off their popular trending toy. In the mid 1990's the emerging eCommerce markets were the new trend and Ebay stood out on top of the pile.
Ebay did upset Ebay store sellers many times under Meg Whitman's reign. Most of what upset store sellers was the constant change in programming and rules. A store seller would list several hundred fixed price items and Ebay would come along and change a rule or policy and the store seller would have to go through all their listings one by one and update them.
Meg Whitman has never liked the Ebay stores. The stores were installed to increase sales under Meg Whitman's command. Even though you will read Ebay stores were started in Meg Whitman's time it was the founder Pierre Omindyar that installed Ebay stores in June 2001. Ebay was churning enough profit off the auctions but wanted to expand profits by installing low cost stores for non auction buyers and sellers. Pierre Omindyar was also fighting the onslaught of competitor marketplace hosts attracting buyers and sellers away from Ebay so it made good since to provide low cost Ebay stores to inspire buyers and sellers to transact using Ebay. Meg Whitman was in a constant mode to push store sellers to move their items to the auction venue where the profits for Ebay were greater. Meg Whitman started offering auction listing discounts and other motivators for Ebay store sellers to move some of their inventories to the auction venue.
The problem with the auction venue were the extremely high listing fee's. Store sellers are not stupid and know that most auction listings end up with no sales. Auction sales are for rarer highly prized popular items and not everyday consumer and used items. Most steady sales come from many items listed for long periods of time and the low monthly store listing fee's were at least affordable resulting in at least a couple of sales a month that would cover the low store listing fee's for many items. Of course some store sellers were cashing in without the use of the auction venue and Ebay knew this.
Buyers and sellers were both saving and making money using Ebay. Ebay was the place to go because the cash flow was plentiful or good enough if you knew what you were doing. If you didn't know what you were doing you could feel like you were part of a consumer conscience that would toss a few bucks at you now and again.
At the end of 2008 the economy crashed big time due to Bill Clinton allowing illegal immigrants to get home loans through the "Housing And Urban Developement (HUD)". The derivative market that bought and sold home loans between financial institutions became overloaded with bad illegal immigrant home loans and finally after 10 years at the end of 2008 the whole economy collapsed.
Meg Whitman left in early 2008 after becoming a billionaire through Ebay and another CEO was chosen that really got greedy and hated the Ebay stores even more than Meg Whitman did. This guy John Donahoe the new CEO was out to get rid of all the $2 and $3 dollar store sellers and there were plenty of them. Sellers that sold used cloths and garage sale trinkets for a couple of bucks plus shipping were getting the boot off Ebay with the installation of a $16.00 a month store front rental fee to go along with a revised listing fee base that restricted the number of items that could be placed up for sale and higher final value fees. The new CEO John Donahue even stated publicly that Ebay store sellers were not paying enough and Ebay's profits were getting shortchanged.
Ol John Donahue tried his tricks to manipulate profits up but all he did was watch the falling profits on his daily earnings sheet. He hosed store sellers bad to the point there was an online revolution. To stop this onslaught of bad publicity by the store sellers that were getting screwed over, John Donahue started giving all sellers "50 Free No Listing Fee Auction Listings" a month. A few years after that he cut this to "20 Free Listings A Month". When the new CEO Devin Wenig took over the "50 Free Listings Came Back" along with the occasional "500 Or More Free No Fee Listings".
In 2015 another CEO took over and his name is Devin Wenig. Now Ebay store front rental fee's are $20.00 a month if you pay yearly and $24.95 if you pay monthly. Gee's, will this Devin Wenig be able to stabilize Ebay's profits in a failing economy full of immigrants that are lowering U.S. citizen incomes? I guess he's going to try by increasing store fee's. Kinda like when the government wants to raise more cash the first things they increase are taxes on in tobacco, gasoline and alcohol before everything else gets a tax hike. The U.S. government is to blame for collapsing the economy and the Ebay CEO John Donahue is responsible for the revolution against Ebay and making Ebay profits worse.
Ebay store rental fees are now in the $20.00 a month area now with restrictions on how many items you can have in your store before even higher listing fees kick in. If you pay yearly you get 250 items a month with no insertion fees which equals out to .08 cents a listing per month. That's a far cry from the .03 cents per listing without the store rental fee that was last see in 2008 before Meg Whitman left with no item restrictions. If you go over 250 items a month you get charged .20 cents for each listing over the 250.
It does look like the new CEO Devin Wenig is trying to bring back some spirit for Ebay. Ebay was a vibrant online marketplace under Meg Whitman with the .03 cent per store listings, small final value fee, no item listing restrictions and "NO" store front rental fee. When the economy collapsed at the end of 2008 John Donahue would have fared the bad economy much better if he had left the Ebay stores alone as Meg Whitman had them before she left. But instead John Donahue decided to attack Ebay stores and watched as the bad economy pulled Ebay's profits down. The vibrant Ebay marketplace turned dull with only successful brick and mortar stores peddling their wares. An Amazon lookalike is the Ebay of now but in a different format.
Will Ebay build Amazon warehouses in the future to come? Amazon tried to steal some of Ebay's thunder with auctions that they eventually had to drop because Ebay had the drop on them with that. Amazon still has store fronts that sell used items but they are mostly someone's personal brick and mortar stores that are on Ebay also.
The economy is bad right now so I expect we will have to wait to see what Ebay is planning to do as the little home sellers with a little junk in their garages get pushed aside for corporate profits. It's the little sellers with a little junk in their garages that got Ebay started in the mid 1990's as the personal computer age was coming into being. Right now as people pull back their spending because of the bad economy Ebay is in a recession also, "Down A Couple Of Billion A Year".
A vibrant place Ebay was but now as several other marketplace hosts adjust their sites for the future of satisfying the little sellers with some junk in their garages that got Ebay started we will see if Ebay will take their stores back to the past or sacrifice the little sellers with some junk in their garages to another emerging eCommerce web site with rising traffic.
Ebay has had 4 CEO's now. Each time a new CEO takes over another step is taken to advance Ebay away from the small sellers and into the hierarchy of retail business.