eBay’s End of Term Report

eBay’s fourth quarter results have led to an 8% jump in their stock value. Partly due to the Christmas sales rush, the sale of Skype and the performance of Paypal eBay have seen their net income rise to $1.4 billion.
Paypal has definitely been the Jewel in the Crown of eBay this last year. Its total payment volume has passed the $20 billion in the last quarter. It has 81 million active accounts, is in 190 countries and supports 24 currencies.
Despite the positive factors that have come out of the fourth quarter report there are still some areas of concern. Amazon is now well established as the leading online marketer and whilst their discount policy is encouraging growth whilst eBay’s auction format seems to be falling out of favour.
The situation at the moment appears that whilst more items are being sold on eBay the customers are paying less for them .This results in a reduced income for eBay on its Final Valuation fees. Some analysts believe that this will lead eBay to increase its fees once again. If this should happen it can only increase the already steady drain of eBay sellers who have gone off in search of other market places.
There is some suspicion that eBay would like to dump its original “baby” the online auction format and concentrate solely on fixed price buy it now items. To this end it has already offered some big incentives to large bricks and mortar companies to put their goods on the site. But even this policy has presented the company with some problems.
Many of the small companies and individual sellers who were the backbone of eBay believe that it is no longer a level playing field and all the advantages are being given to the big boys. As a consequence many have moved on. The second problem is that eBay does not own or control what is being sold on its sites. Therefore when Amazon or one of the other online retailers introduces a discount policy eBay cannot react.
If further proof were needed that eBay has its problems a recent survey conducted by Auctionbytes the online auction information site came up with some interesting findings. Their subscribers were asked to rate the various e-commerce market places 1.400 responded. Each site was assessed out of 10 for Recommendation, Profitability, Customer Service, Communications, and Ease of Use. In each category eBay finished in the bottom third and only achieved an overall rating of 4.11 and finishing third from the bottom of the overall table. Interestingly Amazon finished in fourth place and Ruby Lane who was rated top in all categories and so was also overall favourite.
There is no doubt that 2010 is going to be a testing year for eBay and it will be interesting to see how they will go forward from here.

Article Source: http://tk4.org

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