We won’t compete with
you
My initial impression was that EBAY had been left behind by the online juggernaut that is Amazon. Amazon has dominated the online space, with its own shipping and inventory it has been able to more closely control the customer experience and put pressure on traditional retailers. Amazon alienated large retailers by releasing a price check app before Christmas last year, a consumer using the app with certain conditions could find the similar item on Amazon at a 5% lower guaranteed price.
My initial impression was that EBAY had been left behind by the online juggernaut that is Amazon. Amazon has dominated the online space, with its own shipping and inventory it has been able to more closely control the customer experience and put pressure on traditional retailers. Amazon alienated large retailers by releasing a price check app before Christmas last year, a consumer using the app with certain conditions could find the similar item on Amazon at a 5% lower guaranteed price.
Amazon has been undercutting retailers other ways, the FT
had a great article exposing Amazon’s pricing algorithms. Basically Amazon
has been data mining retailer’s sales on their site and using the information
to undercut their prices. EBAYs rallying call to retailers is, we will not
compete with you. This is a lot easier for EBAY when EBAY does not carry its
own inventory. Retailers have finally woken up to the fact that EBAY can help
facilitate transactions while Amazon is a direct competitor.
My favourite item of all time ghost in a box
The large retailers have opened storefronts on EBAY increasing the number of fixed priced items to around 70% of listings, EBAY is no longer just a flea market. EBAY has also improved the customer experience with nearly half of the items sold offering free shipping. Due to these initiatives EBAY marketplaces is posting its strongest organic growth since 2006 of 15%.
Paypal don’t leave
home without it
The other trend EBAY is tapped into are electronic payments. Paypal recently inked a deal with Discover Financial Services, it was a fantastic deal allowing EBAY to leverage into their relationships with 7 million merchant locations across the US with the international opportunity yet to come. It would have taken years for EBAY to ink similar deals with individual retailers. Because of this merchant growth EBAY now accounts for only 1/3 of Paypal's transaction volume. Given the Paypal's decreasing reliance on EBAY marketplaces it is possible that we may see the division spun off in a few years time unlocking shareholder value.
The other trend EBAY is tapped into are electronic payments. Paypal recently inked a deal with Discover Financial Services, it was a fantastic deal allowing EBAY to leverage into their relationships with 7 million merchant locations across the US with the international opportunity yet to come. It would have taken years for EBAY to ink similar deals with individual retailers. Because of this merchant growth EBAY now accounts for only 1/3 of Paypal's transaction volume. Given the Paypal's decreasing reliance on EBAY marketplaces it is possible that we may see the division spun off in a few years time unlocking shareholder value.
Not sold yet, sell
your life on EBAY?
Remember the man who sold his life on EBAY a few years ago? There was a nice little write up in WA today, after the auction four years later he is now living on an island he bought. As Ian Ushers mentions "the journey here was a little random. I just happened to be reading an article on the cheapest places in the world to live, and Panama came up." Since selling his life (house, job, cars and friends) he has accomplished 93 out of his 100 goal bucket list. Apart from French one of his goals was to join the “mile high club.” Disney was interested enough to obtain an option to produce a movie about the tale. There is no other internet site that can help someone sell their life and move onto the next great opportunity!
Remember the man who sold his life on EBAY a few years ago? There was a nice little write up in WA today, after the auction four years later he is now living on an island he bought. As Ian Ushers mentions "the journey here was a little random. I just happened to be reading an article on the cheapest places in the world to live, and Panama came up." Since selling his life (house, job, cars and friends) he has accomplished 93 out of his 100 goal bucket list. Apart from French one of his goals was to join the “mile high club.” Disney was interested enough to obtain an option to produce a movie about the tale. There is no other internet site that can help someone sell their life and move onto the next great opportunity!
Jason
Disclosure:
Decisive is long EBAY
The material in
this article is for informational purposes only and in no way constitutes a
solicitation of business or investment advice. The material has been prepared
without regard to any client's or other person's investment objectives. Before
making an investment decision you should consider the assistance of a financial
adviser and whether any investment or service is appropriate in light of your
particular investment needs.
