Monday, January 14, 2008

Key Takeaways From PeSA Conference Call with Bear Stearns

On Friday January 11th Bear Stearns hosted a conference call with Jonathan Garriss of Gotham City and Executive Director of PeSA (Professional eBay Sellers Alliance) Here are some key takewaways. If you would like to hear the entire conference call replay, please email me for the information.

  • Detailed 4Q Trends. Mr. Garriss mentioned that PESA member listings decreased 14% YoY. However, included in those numbers are the shut down of 66 sellers in 2007 as well as newly added members to the organization. On a same-store basis, PESA members’ listings decreased 7% YoY. 45% of its members increased listings YoY in 4Q. Mr.
    Garriss mentioned that conversions and ASP trends are weak. Overall, GMV went up by 7% YoY, aided by the addition of new members.
  • Sellers Become More Multi-Channel Than Ever Before. eBay’s flat fee structure does not present seller scale, which makes it challenging to run high volume business on eBay. As such, large sellers all start looking at alternative channels / launch own web sites. The speaker mentioned his observations that as sellers started to rationalize their
    channel mix, they started to put premium products on their own sites and amazon.com while push remnant/closeout inventories to eBay. As such, ebay is increasingly becoming a liquidation channel.
  • Thoughts on Fee Structure Changes. Mr. Garriss believed eBay could announce the upcoming changes in its fee structure in the upcoming weeks. The current fee structure charges upfront payment which is roughly 2/3 of total listings costs to sellers. These uncertainties put eBay at disadvantage compared to its competitors like Amazon.com.
    Sellers are investing every incremental dollar into alternative channels and ebay has to move quickly to keep those sellers. The speaker believes that eBay will incorporate much feedback learned from the eBay Top Seller Summit in Washington D.C. on January 29th, 2008. eBay is also reconsidering its gallery option offers as they tested free gallery
    promotion recently. The lack of images presents poor user experience and eBay could be considering making that option free to all to enhance buyer experience.
  • Thoughts on Finding 2.0. The speaker mentioned that there are definitely issues with eBay’s Finding 2.0 given the unstructured nature of listings data on the eBay marketplace. That being said, Mr. Garriss believes that it is one of the company’s top priorities to launch a better search mechanism in 2008.
  • Thoughts on Trust & Security. Trust and security is yet another area of focus for the company. Aside from improving the trust issues on the platform, eBay should also make sure that the message is included in its marketing campaigns to attract buyers to the platform. Buyer confidence is the key to Amazon’s strong performance.

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