eBay 2024 1st Quarter Results - Groundhog Day

[ett1954]

For those interested; late yesterday (UK time) eBay's first quarter results for 2024 were announced.

As expected now, for the last 8 quarters, eBay active buyers were flat (although down 1% year-on-year).

Active sellers, well we don't know that figure as eBay stopped reporting seller numbers in 2021.

GMV basically flat on a FX Neutral basis

Revenue up 2%

Advertising revenue (promoted listings etc.) accounted for a significant proportion of the revenue increase and much of this was ploughed back into the share buyback scheme to satisfy investors and support the share value.

Interestingly when questioned about seller retention the CEO responded with a statement that eBay believes that what sellers really want is more ways to spend more money on advertising in order to bring back traffic.  So there you have it - if you want to sell you have to pay more in promoting your products.  Fortunately I have other avenues which are increasingly bearing fruit and as eBay want more of my margin to sell I will be offering more of my stock elsewhere.

Of further interest was the following comment from the CEO "We're increasingly leveraging generative AI to change how we work, driving meaningful productivity and efficiency improvements across our organization."  For a platform that is seeing a decrease in its basic functionality, almost on a daily basis with the ever increasing glitches, this scare the h*ll out of me.

[messier44000]

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@ett1954 wrote:

the CEO responded with a statement that eBay believes that what sellers really want is more ways to spend more money on advertising in order to bring back traffic.

Hands up anyone on these boards that have told eBay in any of their surveys they want to spend more on advertising.

[fatbobfan]

There is an interesting 'Market' analysis on BBC's World Business News 02/05/2024 looks at why the 'Markets' reacted the way they did to the quarterly results.

Collectables and Autoparts specifically get a mention, some intersting analysis on competitors who are now live streaming sales and Tiktok is now part of the retail world, who knew (not me) 

Its on Iplayer 5 minute report about a third in, I found it interesting 

[edwardian-dreams]

What a load of *bleep* 

[the_book_seekers]

ebay thinks sellers want more ways to spend their profits on advertising! Really. I'd like to know where they got this particular gem from. 

[theelench]

So another quarter of  --  more of the same.

Everything flat except a bottom line propped up by Promotion fees

Most of the profits going to shareholders while the site(s) crumble and buyer and seller numbers fall.  (If seller numbers were doing anything else the numbers would be reported, probably as a triumph)

Again I'll hazard a guess that if we could see the figures for ebay.uk, they would be even worse than for ebay.inc.

Meanwhile, my first quarter results on *b*d.

Sales 25, an increase of 250% on the same quarter last year.  And an increase of 1 on the whole of last years total.

Increase in fees paid 0%

Advertising spend 0.

I've more or less given up even trying to seriously sell anything on ebay, so can't say anything meaningful, except perhaps:

Total sales this quarter 2.

Increase in fees.  Was it 0.3% for the Regulatory Expenses Fee ?  Levied to help pay ebay.inc fines in the USA and so as not to spoil the shareholders party by risking a dividend cut.

Advertising spend 0.  With MY Return On Investment so pitiful, I don't think the CEO or the shareholders deserve a penny extra from me. 

[theelench]

Edit to the above.

Sales increase on the other site should read 150% not "250%".

Sorry, I shouldn't try mental arithmatic before second cup of coffee !

[the_book_seekers]

I watched an interview with the CEO with him talking about the results. He described the UK and Germany markets as 'soft' which I took to mean under performing, something a lot of us are very well aware of. 

[theelench]

The UK used to be the second largest ebay site after the USA.  I wonder if Germany is / was the third.

And is it relevant that .de was given fee free sales for private sellers ?   Followed shortly thereafter by what seems to have been a one-off offer of fee-free sales to selected UK private sellers, quickly followed by fee free sales of clothing for all private sellers in the UK.

Perhaps the Ebay Inc. figures hide a deeper malaise than I thought ?

[the_book_seekers]

In a wider field of online competitors getting buyers attention and staying relevant is harder than ever. If you sell outside of ebay's favoured categories there's probably not a lot of help, if any, from the company. Indeed we seem to be expected to advertise ourselves through promotions, paying for the priviledge. 

I think the figures said ebay has lost 1% of buyers from a previous figure 132m - that's still 1.32m buyers lost. 

[theelench]

Yes I agree with you.  Although the OP doesn't mention "ebays favoured categories" specifically, I expect (going by several previous quarters) that the CEO gave glowing reports about how well they were growing etc. etc.

But even if they're growing better than expected, they're still not growing enough to reverse the overall trend of everything in decline except advertising revenue, which continues to prop-up the profits on the bottom line.

I wonder how long a business can continue if most of it is in decline, the 'favoured categories' showing no visible evidence of reversing the more general decline and the only area of growth something which is essentially a bubble depending on the sentiment of those using it.

Yes Promotion works for some, but surely there are many for whom it doesn't and at some point they will realise they're effectively paying for little or nothing and stop.

Yet as ebay restricts sales of non-promoted listings to continue PL success aren't they loosing sellers and their sales who would otherwise be contributing to ebays profits?  Perhaps not by the 20 - 25% that ebay gets from PL  but at least by the 12.8% basic fees.

To me ebay is whittling away at sustainable and even what could be organically growing profits in favour of hyping something that will inevitably have a sell-by date as more sellers see through the smoke and mirrors ?

[ett1954]

@theelench   "Although the OP doesn't mention "ebays favoured categories" specifically, I expect (going by several previous quarters) that the CEO gave glowing reports about how well they were growing etc. etc."

Sorry I have just come across your response as I no longer receive notifications from the community boards (Re: No longer receiving email notifications from c... - UK eBay Community )

I only came across a vague statement regarding enthusiast buyers other than it was roughly flat quarter over quarter at 16 million...spending over $3,000.  This was the 5th consecutive quarter at 16m; prior to this Q3 2022 it was 17m so read into the comment what you will.  Reading between the lines my take on this is that when inflation is taken into account these favoured categories could well have passed their peak and now be falling slightly.

The following comment was made regarding eBay's favoured categories: "After many quarters of consistent innovation in focus categories like luxury, P& A, and retail, Refurbished sneakers and street wear. We are bringing our innovation playbook to pre owned fashion in the UK to simplify selling, drive inspirational shopping, and promote the circular economy."

Comment was made to initiatives taken in Germany and the UK particularly the free clothing selling for private selling in the UK and a reference to the new OECD rules requiring the reporting of selling to tax authorities.

I found the following statement strange in that it only referred to the UK:  "In the UK, we did see some softness in C2C volumes during the quarter when the new UK digital sales reporting requirements came into effect. We are currently working to educate sellers that many of them actually do not incur taxes for selling pre owned items."

Strange to single out the UK when there are over 30 countries involved in this OECD initiative, including Germany; although on second thought eBay in the UK up to still appears to tolerate, if not actively encourage, businesses to sell under a private account whereas most countries enforce this through regulation and penalties, especially Germany, and this legislation will probably just bring the UK into line with other countries.

One final point; these Quarterly Statements are primarily aimed at the financial markets and the investors and will always aim the delivery to maintain confidence in the business and of course to support the share value.  Accordingly as long as dividends are maintained share value doesn't fall (manipulation through share buybacks), then everything is rosy in their world.

[the_book_seekers]

"We are currently working to educate sellers that many of them actually do not incur taxes for selling pre owned items."

If I were a private seller dealing with the new regulations I'd be reluctant to take any advice from ebay about it. With the company's track record there's no guarantee it would be correct, but I'd be certain there would be no backing if it was wrong. 

[theelench]

I distinctly remember replying to one thread when these enthusiast buyers and ebays favoured categories were first being held up as the the "way to go" to reverse ebays loss of buyers and falling sales.  The CEO was also praising how well ebays plan was going to "rid the site of low value buyers".

I said at the time,  that this was all smoke and mirrors to cover the loss of small sellers and buy time by claiming that it was necessary to build a relationship with the High Value Buyers and encourage them to shop several times a year on ebay.  Kicking the can down the road and buying a few more years before ebay's failings were revealed.

It certainly looks like the can could do with another kick, reality perhaps having caught up with the hype again.

So now we see ebay trying to entice those low value buyers and sellers back again with fee free sales in .de and .uk. because they've woken up to the fact that "Buyers who also sell, buy twice as much as buyers who don't".  In other words those "Low Value" buyers ebay has spent years trying (and succeeding) to rid the site of.

Having taken Paypal from them, demanded they hand over bank details, forced them onto the Seller Hub, introduced the wider use of Payment Holds and generally made using the site a more horrible experience and reduced their sales unless they pay for Promotion.  Now ebay wants them to return to the same site, with all the things that drove them away, still in place ?  Plus, if they return, they will find that ebay now wants their NINO and there is a possibility of getting entangled with HMRC.

I don't think that will go well, the response will IMO be a rude gesture from many. 

I don't know why ebay singles out the UK when it says they are "working to educate sellers" re. tax liabilities.  I've learnt more from reading the boards than I have from ebay and only seen their efforts if they've been quoted here.  Only a guess, I've said that IMO ebay.uk is perhaps even weaker than the ebay.inc figures imply.  Perhaps the "Softness" in C2C, (I take it that means private seller to private buyer transactions ?) was caused by another wave of them leaving ebay on top of the already heavy losses that accompanied each step along the path outlined above.  Making it especially pronounced in the UK ?

[theelench]

I'm a private seller and will have to deal with them and I certainly won't be relying on ebay's advice.

Some on the boards have put forward a comforting scenario where sellers who breach the thresholds and are reported to HMRC will receive a letter politely asking them to confirm that they are only selling their unwanted possessions.

That's not the sort of approach I remember when I was Self Employed.  Any perceived discrepancy resulted in a terse letter demanding "x, y and z"  information to explain things to their satisfaction.

No-one really knows what HMRC will do with what will very likely be a torrent of information.  They may send out polite enquiries but, IMO, they are just as likely to not bother doing that and just send a letter / email telling everyone that they are now required to file a Tax Return. 

Who knows, but I'm proceeding with that in mind and will stop selling on ebay this year.  I have nothing to fear from completing a Tax Return (although being annoyed that I'm likely to be dragged back into something that I thought I'd done with when I retired), but a tax return will inevitably give a distorted picture of my selling activities which HMRC could think incriminating.  That distortion will be removed if I only sell on one site, so that is what I will do.