Wednesday, April 18, 2007

eBay is Getting out of the DVD Business!

This subject is near and dear to my heart. I made my living selling media items on eBay for several years until I saw the writing on the wall and shut down. During, eBay's Q1 Earnings conference call eBay's CEO Meg Whiman made the following statement. (The source for this is here).

2:07 p.m. Pacific: CEO Meg Whitman is going over why eBay's sites in U.S. and Germany aren't growing faster. Two initiatives to improve the quality of the marketplaces - getting rid of commodity listings like low-priced books and DVDs, and booting fraudulent sellers off the site - are holding back growth in gross merchandise value, Whitman says. France and Italy, by contrast, are "success stories in their own right," she adds.

I've felt this was their intention for quite awhile and believed the stores fee increase was meant to accomplish this, unfortunately when your business is selling DVD's you aren't just going to close up shop because of a fee increase -- I of course closed-up because I didn't see any upside in the business on eBay. No wonder they didn't put up a fuss when I told them I was shutting down GlacierBayDVD.

There are 1000's of sellers on eBay right now that should be shaking in their boots after hearing this statement from Meg "getting rid of commodity listings like low-priced books and DVDs"

eBay will just say that Media sellers should move there product to but many sellers are already there and their sales will be cut in half (pun intended).

This kind of statement in a public forum like a conference call is irresponsible and wrong. I’ve spoken with several media sellers this evening and they are all scared to death that their businesses may be finished.

EBay, needs to immediately confirm what their plans are and allow ample time for sellers to find a solution for their business.

This is a sad day among many sad days regarding eBay.


FireMeg said...

eBay management is hoping to drive up the ASP by getting rid of lower priced listings. Seems to make sense, until you realize that eBay is going to be losing the insertion fees on low priced listings and the FVF's also. Thought the increased ASP will look good on paper, how is it going to look on the books?

Also during the conference call today, Meg said that eBay users now total 230 million+. We at think that is a bit of a stretch and feel that ebay management is including multiple ID's by single users and also ID's created for fraudulent reasons on the site.

We're having a simple one question poll, how many eBay ID's do you have. Please take a moment to submit an answer, and maybe we can show that Meg Whitman is, well, full of crap.

Biddy said...

Randy, I think this is the relevent section:
However, the growth rate of overall listings and therefore GMV are not what we want them to be in the US and Germany. So let me spend a minute addressing the factors we think are specifically contributing to the growth rate in these two countries. First, as we told you last year, we continue to focus heavily on improving the buyer experience, by advantaging our auction listings and discouraging lower quality, poorly priced listings. This is absolutely having the desired effect of a cleaner site. However, as expected, this is putting some pressure on our listings and GMV growth in the US and Germany. But we still think this initiative will continue to substantially improve the buyer experience.

As you can see, it makes no specific mention of categories. I think the business2 person picked their own illustrations - and as you've probably seen, the AP report that appeared on Forbes picked different categories (cell phone chargers and out-of-date mp3 players!). I think Meg quite deliberately didn't mention any specific categories!

Randy Smythe said...

Biddy, I finally got the transcript! As you mentioned there were no specific categories.

I do think it is important to point out that DVD's are low-priced commodity items and that the Media category will be one of the first categories to experience the "purge"