Almost two years have gone by since eBay made those fateful business decisions back in early 2008. John Donahoe’s monumental shift in removing seller’s ability to leave feedback and other significant changes that drove away sellers in droves. Now that two years have passed, how do things look for eBay now? CNN Money has a good article on the status of eBay at EBay sellers’ rebellion – the aftermath.
At first glance (and reading Donahoe’s spin) it looks like eBay is doing fine. They reported a gain in 2009 revenues over 2008 and 2007. However net income is a different matter. That’s down 8% from last year. Net income is typically a more valuable measure of business success than revenues are. Also tracked on eBay is GMV (Gross merchandise volume) – a measurement tracking the value of all items sold on eBay. This was even with last year (in other words, no growth). Furthermore, Amazon sites have surpassed eBay in number of visitors as of December 2009.
While eBay is not going under any time soon, it doesn’t look they are not growing by leaps and bounds any longer. The official word is they are showing progress based on the revenue figures, but I’m not sure I buy into that given their net income issue.
Sellers are still using eBay and there are ways to use eBay in your home based business without relying on it entirely. The CNN Money article pins it with:
One risk is that eBay becomes an advertising front merchants use to drive buyers to other, more lucrative channels.
I have long held that is the best way to use eBay. eBay still gets lots of traffic, so it’s too sizable to ignore. However, I see smaller sellers relying on it less and less and often only using it for a front to capture customers for other sites off eBay. And people are still not happy with eBay. Read the comments on that CNN Money article and see if you can find a favorable one from a seller.
The big problem for eBay continues to be margin erosion and there are persistent (unfounded) rumors that they are positioning themselves to be sold. But one thing is for certain: eBay is no longer the simple entry level system for a home based business it once was.