• When you click on links to various merchants on this site and make a purchase, this can result in this site earning a commission. Affiliate programs and affiliations include, but are not limited to, the eBay Partner Network.

Archived

This topic is now archived and is closed to further replies.

Capitalization consequences of Ebay Kicking off 15,000 sellers....

Started by the blob,

128 posts in this topic

the blob

the blob

Posted
Posted

Well, it has been over 20 years since I took corporate finance in college (I did get an A though).... but if we assume I am typical of the small/medium size seller kicked off (probably a big assumption...), gone are my roughly $800 a year in ebay and paypal fees (from ebay sales...paypal will still get me when i sell here)

 

While it has not been the case as much lately for me, if we're talking about collectors who sell too, a few years ago I was probably spending about 50% of what I brought in via sales back on stuff on ebay...so generating another $400/yr on the buying end.

 

$1200 a year.

 

15,000 accounts.

 

$18 million in fees lost.

 

Honestly, I do not believe these extra accounts add any to overhead costs (which are mostly going to be there anyway), so let's take a little over 10% off that number...knock it down to $16 million and call it earnings/profit.

 

$16 million X ebay's current 25 P/E ratio = $400 million in lost capitalization

 

Sure, one will argue that just because the 15,000 are no longer selling doesn't mean buyers won't spend that money elsewhere on ebay and generate fees, but that's terribly hard to quantify. It may also drive more buyers to more specialized sites as the offerings on ebay (for collectibles, art (already going to etsy.com) and what not) become poorer. But let's take a guess and knock my # down 25% to $300 million (a seller kicked off is going to be loathe to keep on buying).

 

And let's say some just start selling under other accounts (but the ISP checking they do might make that hard....knock another $50 million off (though I doubt it)..

 

$250 million

 

Sure, I suppose with a market cap of $69 billion, that's a drop in the bucket. Probably the 25 cent drop they experienced yesterday.

 

oh well, so much for my theory...

Link to comment
Share on other sites
the blob

the blob

Posted
  • Author
Posted

yes, i read the link, which is what made me ponder my hypothesis, which is a separate issue...

 

also wanted to see if the finance types here think my reasoning is totally flawed

 

i am trying to transition back into securities/financial litigation again after 9 years of doing civil right/employment/medical, so I'm trying to get my brain into that mindset

 

should have taken the job offer with Boston Cinsulting in college rather than going to law school, would probably be retired by now

Link to comment
Share on other sites
Chespirito

Chespirito

Posted
Posted

I vowed to not log on to Ebay..for a while, if enough people do it, another rich guy will come up with another site.....I refuse to believe its a monopoly, I might be wrong, but I believe it isn't just yet

Link to comment
Share on other sites
comicwiz

comicwiz

Posted
Posted

There are two fundamental problems that are in a constant collision course when it comes to understanding the mess eBay has become.

 

The first is that eBay has grown to a size and scale where it is simply too large to manage itself in a logically coherent manner.

 

Depending on a superficial algorithm which allows them to quickly scan members who aren't performing on a sole metric which could easily be skewed in a buyer or sellers favour, on an incident-by-incident basis, is just one way it has demonstrated a total abandonment of common sense.

 

The second is where the rubber meets the road, and it involves its members who are loyal to a fault. If eBay decides several weeks, months or even years from now to re-invite these people it has blocked, I would be willing to bet a high percentage would return. This to me is why things are destined to only get progressively worse with eBay, because it continues to make blunder after blunder and people still put up with them.

 

If people sought alternatives and cut their ties, eBay might probably change for the better. As is, this recent move could probably be used as a way to throw up a few charts in front of their stakeholder meetings as a clamp down measure, and reinforced with some cost metrics revealing what eBay spends to patrol/monitor riff raff, which I'm pretty certain would be a number that would easily dwarf your projected $250M in losses.

 

The best thing I ever did was get my own website. I can still use a number of marketing methods, including eBay, to pull customers in, but I have way more choice when it comes to determining how much I want to support eBay or any venue undeserving of my business and loyalty.

Link to comment
Share on other sites
comicwiz

comicwiz

Posted
Posted
I vowed to not log on to Ebay..for a while, if enough people do it, another rich guy will come up with another site.....I refuse to believe its a monopoly, I might be wrong, but I believe it isn't just yet

 

eBay is part owner of Craigslist, and owns Kijiji and a few other free local classified sites. They have very long and reaching tentacles when it comes to the business of online auctions and classifieds.

Link to comment
Share on other sites
Chespirito

Chespirito

Posted
Posted
I vowed to not log on to Ebay..for a while, if enough people do it, another rich guy will come up with another site.....I refuse to believe its a monopoly, I might be wrong, but I believe it isn't just yet

 

eBay is part owner of Craigslist, and owns Kijiji and a few other free local classified sites. They have very long and reaching tentacles when it comes to the business of online auctions and classifieds.

 

Russia was once powerhouse who answered to no one....Ebay, eventually has to come down off its pedestal and allow other kids in the playground to play...

Link to comment
Share on other sites
asteroid-comix

asteroid-comix

Posted
Posted

Who is to say the 15k members won't just return under a new account? It's not that hard to grab a PO box, new checking account, and open a brand new eBay account. That's probably giving eBay way too much credit for id'ing these sellers that got kicked. I'm betting they could just open a brand new account with a new email and eBay wouldn't say word one to them.

 

Seemed to be more of a marketing tool to pull in more buyers. eBay is probably banking on the fact that the removed sellers will just return under a new id.

Link to comment
Share on other sites
Comicopolis

Comicopolis

Posted
Posted
I vowed to not log on to Ebay..for a while, if enough people do it, another rich guy will come up with another site.....I refuse to believe its a monopoly, I might be wrong, but I believe it isn't just yet

 

eBay is part owner of Craigslist, and owns Kijiji and a few other free local classified sites. They have very long and reaching tentacles when it comes to the business of online auctions and classifieds.

 

Russia was once powerhouse who answered to no one....Ebay, eventually has to come down off its pedestal and allow other kids in the playground to play...

 

Yeah, the west has really put Russia in its place since the Berlin Wall came down.

Link to comment
Share on other sites
Chespirito

Chespirito

Posted
Posted
I vowed to not log on to Ebay..for a while, if enough people do it, another rich guy will come up with another site.....I refuse to believe its a monopoly, I might be wrong, but I believe it isn't just yet

 

eBay is part owner of Craigslist, and owns Kijiji and a few other free local classified sites. They have very long and reaching tentacles when it comes to the business of online auctions and classifieds.

 

Russia was once powerhouse who answered to no one....Ebay, eventually has to come down off its pedestal and allow other kids in the playground to play...

 

Yeah, the west has really put Russia in its place since the Berlin Wall came down.

I just meant that not all big boys in the playground remain the big boys forever...

Link to comment
Share on other sites
Comicopolis

Comicopolis

Posted
Posted
I vowed to not log on to Ebay..for a while, if enough people do it, another rich guy will come up with another site.....I refuse to believe its a monopoly, I might be wrong, but I believe it isn't just yet

 

eBay is part owner of Craigslist, and owns Kijiji and a few other free local classified sites. They have very long and reaching tentacles when it comes to the business of online auctions and classifieds.

 

Russia was once powerhouse who answered to no one....Ebay, eventually has to come down off its pedestal and allow other kids in the playground to play...

 

Yeah, the west has really put Russia in its place since the Berlin Wall came down.

I just meant that not all big boys in the playground remain the big boys forever...

 

You are correct sir. (thumbs u

Link to comment
Share on other sites
asteroid-comix

asteroid-comix

Posted
Posted
I vowed to not log on to Ebay..for a while, if enough people do it, another rich guy will come up with another site.....I refuse to believe its a monopoly, I might be wrong, but I believe it isn't just yet

 

eBay is part owner of Craigslist, and owns Kijiji and a few other free local classified sites. They have very long and reaching tentacles when it comes to the business of online auctions and classifieds.

 

Russia was once powerhouse who answered to no one....Ebay, eventually has to come down off its pedestal and allow other kids in the playground to play...

 

Yeah, the west has really put Russia in its place since the Berlin Wall came down.

I just meant that not all big boys in the playground remain the big boys forever...

 

What about AOL, Blockbuster, CD's, VCR's, or the printed word? Ah, wait...

Link to comment
Share on other sites
comicwiz

comicwiz

Posted
Posted
I vowed to not log on to Ebay..for a while, if enough people do it, another rich guy will come up with another site.....I refuse to believe its a monopoly, I might be wrong, but I believe it isn't just yet

 

eBay is part owner of Craigslist, and owns Kijiji and a few other free local classified sites. They have very long and reaching tentacles when it comes to the business of online auctions and classifieds.

 

Russia was once powerhouse who answered to no one....Ebay, eventually has to come down off its pedestal and allow other kids in the playground to play...

 

Yeah, the west has really put Russia in its place since the Berlin Wall came down.

I just meant that not all big boys in the playground remain the big boys forever...

 

Just to be clear, I only mentioned that because a lot of people swear to quit eBay, and then turn to other sites it owns.

 

eBay is the despot when it comes to online auctions. I think it's more likely that no one will care or want to be associated to the space ten years from now, rather than a case of another player overthrowing the current despot. eBay will try to adapt to the changes that are coming, but will fail because the next generation will not be anywhere near as fee-intensive, and there just isn't a way for eBay to offload the burn rate of running it's site in its current iteration and/or without significantly altering how it operates.

 

A lot of the "what" and "how" things will happen in the next five years determines the role social networks will play in the next wave of person to person trading, but I really believe the one big threat to eBay is technology which simplifies the way we share the things we own and cherish. It's really hard to explain this without losing people, but this idea of having to scan, photograph or list items using individual photographs or still images will look like the dark ages of sharing once technology like Google Glass reaches it's second or third generation. And there are a lot of really cool things other vendors are doing, but I really believe Google will own this space.

 

There is also the trust factor, and eBay has been way behind the times in this respect. My website offers me ten times the protection eBay does, because every registrant has to provide me their information, and the payment module uses the lowly IPN interface which at least alerts me when a person purchasing from my site is using a PayPal account which doesn't match the info they provided upon registration. Nice thing is that whenever this happens, I rectify it by making a simple phone call and in most cases it's resolved in the first few minutes speaking on the phone with the customer. With eBay, it's basically a roll of the dice, and the idea that it also allows shady sellers to remain anonymous and carry out their ruse using "private" account settings has never sat well with me.

 

Social networks will destroy eBay in this regard, because the mere fact that people are connecting using mobile devices with unique phone numbers, registration information, and metadata from the media sharing, creates a different type of atmosphere of trading where real people using their real identities are allowed to develop toward positively building their personal brands, rather than being an unknown, insignificant, and taxed cog whose sole purpose is to serve and build up eBay's brand power.

Link to comment
Share on other sites
dupont2005

dupont2005

Posted
Posted

eBay will eventually be replaced by something exactly the same, the way Facebook replaced Myspace. I bet nobody saw that coming in 2005. But when our new overlords control the online auction market will things be any better? I figure no online auction is going to be perfect and we're all going to have to put up with one thing or another in order to sell online. And I don't think a utopia with five or six awesome sites to choose from with low fees and plenty of bidders is ever going to be a reality.

Link to comment
Share on other sites
ComicConnoisseur

ComicConnoisseur

Posted
Posted
Facebook could probably do an auction type component....basically just do an ebay to expand their market cap. Probably more folks in the usa active on facebook than ebay

I know someone who sells on Facebook, and she says it is quite profitable. I guess she started her own niche group, and her followers buy off her.

Blogs are good as well. I remember coming across this blog about Pokémon cards, and they were selling Pokémon cards on their own blog!

They were getting daily traffic, so yeah it can be done!

Eventually person to person sales will be the way to go, and EBay will get much smaller.

Link to comment
Share on other sites
Bosco685

Bosco685

Posted
Posted
Facebook could probably do an auction type component....basically just do an ebay to expand their market cap. Probably more folks in the usa active on facebook than ebay

I know someone who sells on Facebook, and she says it is quite profitable. I guess she started her own niche group, and her followers buy off her.

 

So does she just post books on her Facebook account, and regular customers then email her on the books they want prices and conditions on? Or is she posting everything on Facebook, and there is no worry of being cut off for running a business through a personal account?

Link to comment
Share on other sites
comicwiz

comicwiz

Posted
Posted
Facebook could probably do an auction type component....basically just do an ebay to expand their market cap. Probably more folks in the usa active on facebook than ebay

I know someone who sells on Facebook, and she says it is quite profitable. I guess she started her own niche group, and her followers buy off her.

 

So does she just post books on her Facebook account, and regular customers then email her on the books they want prices and conditions on? Or is she posting everything on Facebook, and there is no worry of being cut off for running a business through a personal account?

 

Most of the activity is under the guise of groups created to swap/buy goods. A person takes a photo of an unwanted shirt or household item, posts and image of it in the group with a price and buyers post either on their wall or message them if they're interested. Same pitfalls as dealing with strangers on local classified sites apply, but the good thing is these groups tend to be localized to a specific area only. Because of the local aspect, it tends to be more a cash and carry/pick-up type of model of selling. This is how I envision the next wave of person to person trading to evolve to, and it will be more of a relaxed garage sale/swap meet type of buying/selling atmosphere.

Link to comment
Share on other sites
ComicConnoisseur

ComicConnoisseur

Posted
Posted
Facebook could probably do an auction type component....basically just do an ebay to expand their market cap. Probably more folks in the usa active on facebook than ebay

I know someone who sells on Facebook, and she says it is quite profitable. I guess she started her own niche group, and her followers buy off her.

 

So does she just post books on her Facebook account, and regular customers then email her on the books they want prices and conditions on? Or is she posting everything on Facebook, and there is no worry of being cut off for running a business through a personal account?

 

Most of the activity is under the guise of groups created to swap/buy goods. A person takes a photo of an unwanted shirt or household item, posts and image of it in the group with a price and buyers post either on their wall or message them if they're interested. Same pitfalls as dealing with strangers on local classified sites apply, but the good thing is these groups tend to be localized to a specific area only. Because of the local aspect, it tends to be more a cash and carry/pick-up type of model of selling. This is how I envision the next wave of person to person trading to evolve to, and it will be more of a relaxed garage sale/swap meet type of buying/selling atmosphere.

+1

You have explained it better then me.

Link to comment
Share on other sites
Go to topic listing