Stumbled across this blog. Great post. As a former eBay store owner myself--canceled right before the rate hike--I've been frustrated with them.

I know a lot of pressure comes from Wall Street to appease unrealistic expectations, but c'mon...

Although, there are other auction/classified sites (Overstock, Google Base, etc.) to sell stuff, none come close to the magnitude of eBay. There needs to be a company that completely changes the face of online auctioning.

Reminds me of how Y! Mail and Hotmail got lazy after dominating the free e-mail market then Gmail came along and changed everything. Same with what Firefox did to Explorer.

It's a shame Google and Co don't seem to want to upset eBay by having a go at them (either in competition or even a takeover threat). Maybe their too friendly with each other!

I still see the far east as the danger to eBay. Just as the Japanese took on the established motor industry in the late 20th Century I think the Chinese may take on the Internet big boys in the next few years.

The Japanese didn't really innovate much, they just recognized an existing market could be exploited better by being more efficient and offering better value.

Who imagined Ford losing money hand over fist a few years back?

Who dares imagine eBay losing money hand over fist in a few years time (perhaps for fear of being labelled a space cadet)?

In the meantime Gary, good to see you've put your writing skills to good use!

LOL Helen, you crack me up!!!

I agree, wish Google would get off their you-know-what and get something going...

And if they do have something going, I wish they'd hurry up!

I was wondering why the reported listing numbers were still managing to remain so high. With 56 sales I the next question is how long will this new store hang around pouring money into the eBay coffers, with that number of non selling items listed.

As another ex store owner the opposition has gained significantly since all this and the new bright star in the firmanent is Tazbar.com this exciting new site is very clever as when you register each user sees things in their own currency, taking the information from your registration, cool.

Listings at alternative sites have risen by 23% in the last two months and I suspect this may rise still further when the UK store 90 days expire in a couple of weeks. I don't think eBay has seen the last of the exodus.

PayPal, eBays financial money spinner, which has been the real earner, is also coming under pressure as ex users also look for alternative payment options. I suspect their income from this source will also be set for a decline as Nochex, Google and others nibble away at the Greedbay fees!

with respect to Google taking on eBay, i think it's important to remember that Google doesn't really need to take on anybody at this point. however, because they have so much money and some of the top programmers in the world, their slow blob-like expansion will naturally put other companies on their toes naturally. We saw this with search, Gmail and now Google Checkout and GBase.

Google's philosophy, which i think is working brilliantly, seems to be to innovate beyond the reach of established markets, not just trying to come up with something to match an estabilished market and then go head-to-head with the market leader. Great companies innovate and Google is doing just that.

If you're somewhat dependent on eBay right now (as i am), you will not need to wait much longer before you start seeing the effects of Google's blob.. GBase in particular provides a lot of promise and will be tested in Google search results this holiday season. : )

Hi Gary,
August 29, 2006 approximately 15 million total listings, 3.5 million by top 5 stores.

November 6, 2006 approximate 14.1 million total listings, 2.5 million by top 5 stores.


What I find significant about these numbers you've given is that August (15 million total) was in the slow season...

We are now into the holiday season.. only a month and a half until Christmas.. (and that doesn't allow for shipping time).

The sellers should be stocking the shelves.

The current 14.1 million total is a decrease.. not an increase.

So, Where is the vibrancy?... the magic?.. the growth?

I had a trouble getting to sleep last night and it was because of something I read yesterday, I think it was in amongst the blogging stocks.

Apparently ebay adds a huge amount of server space on a daily basis and every time I closed my eyes, all I could see was an image of this formless, ugly mass of greenish gel spreading and swamping every wire in the web almost as fast as the web expanded.

There was something very sinister and worrying about it, like some old ‘B’ movie horror where the ‘thing’ would seem innocuous at first only to then multiply exponentially, rearing itself up as some gross monster before devouring the nearest town and then probably going on to a demise caused by its own greed.

On a more serious note, I believe ebay has caused itself a large and growing problem. Hell bent on global domination, it has opened its doors to half the World to list on the site for free and now has to run to keep up with itself. Yes, China, the Far East, India are all huge markets but do we really need them to all be in one place (ebay) together?

There is also one enormous problem, in that nothing is actually free, especially not when ebay tries to tell you it is. All those ‘free’ listings for the markets those in charge of ebay would like to conquer have to be paid for somewhere along the line … but of course, the Western countries and Australia just had a huge fee hike, bigger in Australia than anywhere else because there is less competition in terms of alternative online auction ‘venues‘ there.

That fee hike, in some cases reportedly representing up to 800% rises as opposed to the 6% claimed by ebay (nowhere have I seen that figure supported by those paying the fees), is just about to take full effect. Although it was implemented at the end of August 06, due to the foresight of store owners SIF (shop inventory format) listings were placed on the auction site for the maximum 90 days for which they are eligible to run and by the 20th November these will have run their course. It remains to be seen how many store owners will feel they can bear the costs of the increases (not only in ebay fees but also Paypal fees) and stay on for the run up to Christmas.

I have to admit, the management at ebay were apparently very ‘clever’ in their timing for the increases in fees. Presumably they were banking on the fact that by the time the SIFs ended, Christmas sales would be into full swing and the knock-on effect of the hikes would not show to investors until the 4th quarter results. I guess the management is assuming that the ‘new business’ gained between the end of August and the financial year end will make up for any losses in existing membership.

But wait, now here’s a thing, I’ve seen people who closed their stores almost as soon as this latest fee hike was announced, stating that their store is still appearing on ebay months after they closed it, ebay hasn’t removed it and, what’s more, it has become clear that there are countless thousands of member accounts which remain open years after they were last used. Not only does this practice massage ebay membership numbers, it also gives scammers and thieves a perfect way into the system by hijacking these dormant accounts.

And that they have done, by the thousand. Ebay’s lax rules on joining the auction site are also causing problems by allowing scammers to set up multiple ids which then are ‘legitimised’ by trading between each other. I have seen many examples of this practice and have screen captured some for posterity. The ‘legitimised’ accounts are then used (after gaining some feedback from its own ring) to ‘sell’ multiple high value items, mainly laptops, plasma TVs and the like but increasingly also other high value goods such as antiques, designer clothing etc., which do not exist and will never be received by the ‘buyer’.

It doesn’t matter to the scammer that the accounts used will quickly be struck off (NARU - no longer a registered user), he/she has no intention of paying any fees to ebay (whether listing or final value fees - FVF), frequently taking all the glossy extras to promote their listings, they bank on having up to about 8 weeks in which to con as many people as possible, making a small fortune along the way.

One rotter I found had not only used his listings (Dutch auctions for expensive goods) to bump up his feedback on a ring of new accounts, he had also conned numerous people out of between c £800 and £1200 each. On just one listing he has made in the region of £5000. In all, he seemed to have about a dozen accounts running and, of course, as soon as one is NARU he can switch to another.

Scammers and thieves are making a fortune and ebay is ‘growing’ exponentially because of their activities. Is this healthy for a business? In the long term clearly it’s a disaster but in the short term, well, there’s money to be made in creative accounting.

#4 So agree, Tazbar is looking mighty nice... Huge advertising campaign as well... My US pick is HiBidder, which is growing steadily and has a tight group of sellers promoting the heck out of it...

#5 Agree there too... GBase actually can be used stand alone, which reminds me, I need to get over there... I think the reason people are wanting Google to do something "eBay-like" is because many sellers have become accustomed to that format... But they want something without the supposed "glatchancements" (which I believe aren't always glitches... Think seller guinea pigs, who pay for IT, LOL), the incessant raising of fees for less, etc... What eBay fails to realize is that, IMO, stores are innovative and both sellers and buyers want them... They're throwing the baby out with the bathwater!

#6 Want to know something even more interesting? Many sellers are reporting their items, either sold months ago, or closed, magically appearing for sale!!! Aye carumba, not only are these sellers being charged for listings they did not initiate, how do you say "padding numbers"? eBay is up to some shady stuff... And imagine how many high volume sellers who don't even notice until a buyer buys something that is out of stock? That's just wrong...

#7 Amazing post...

Gary Sattler

Thank you
Thank you
Thank you

Finally a voice of truth!
It is sure great to see the truth posted where the stock holders can see it. Perhaps its time for a change in the corporate offices .
The strange relistings on ebay of items that have already been sold cant just be a minor glitch in thier system, Can it???????.
The free listings for India for only on the North American ebay site when most of the india listings didnt even ship to america. Does that make any since????? Well enough said on that. The list goes on and on.
Can the sellers trust ebay anymore????I for one dont think so!

First I currently do not own any ebay shares.

Now, I'm disappointed at the decision to turn this section into little more than a rallying point for a bunch of disgruntled people with a clear agenda against ebay. Frankly the market has priced this minority of people into the share price and we can all see what has happened to the stock price since ebay annoyed these people by raising fees.

Gary ok we get it, you don't like what they have done. Move on.

The tiresome bleating and arguments between the likes of Gary Sattler, Sigh, Ann Lambert et al was the main reason I stopped reading the comments sections of your posts. Now I find that Blogging Stocks have signed one of these morons on as an author. Adios.

Seems to me they wanted to do away with auctions when they did away with Going, Going, Gone in April 2004 and instituted a messy convoluted search system. They dealt quite a blow to the arts categories which now suffer from front and rear-loading feature plus auctions (as much as 33 pages worth) with regular auctions smoothered in between - almost invisible unless you have a following. How would you like to list a regular auction and find it ending immediately but smoothered behind 33 pages of feature plus auctions? At the same time, they continued two separate categories for arts so that artists selling higher priced works had to list FP's in two categories at 40.00 plus a pop! Nice work Ebay. Then they pump up stores and when you figure you'll open one and keep higher priced stock in there they pull the rug out from under you expecting you to list most of this stuff back in regular auctions. That was a move propelled by pure greed on Meg & Bill's part. I bet they were drooling in anticipation of all that extra revenue. Thankfully, its backfiring - AND - miraculously its giving other venues a small boost - just enough to hopefully get the ball rolling. Ebay so very badly needs competition....it is now so full of itself that it feels it can and will push sellers around and greedily milk them shamelessly whenever they need cash flow. They happily pump that cash down the dry well known as China!...and give the chinese sellers free auctions at our expense! This whole situation pried me loose from the 100 percent loyalty I had with Ebay and I now list on 3 other venues besides my own website. I really should send Meg and Bill a thank you card :-)

As both eBay sellers and buyers, here in the UK, we can see the situation from more than one angle.

We were keen to exploit the increased exposure of eBay stores, and things were great for us. But revenue from auction style listings fell throughout the period of enhanced store exposure. At the same time, buying became more difficult as sellers listed more of their items at high prices in their stores. Like most sellers, we're being forced to think in a more businesslike fashion whereas before we just piled stuff into our eBay store because it was so cheap to do so.

We can all see that eBay made a mistake, because they didn't anticipate the huge swing towards store listings. We can all see the enormous difficulties that many sellers are facing. We can all see the arrogance that comes with being a dominant player in the market place. But we can also see sellers taking the opportunity to get their act together to seek out new ways to trade smarter, with many sellers using eBay as a marketing tool rather than just a selling platform.

I feel very sorry for all the sellers who are badly affected, especially you guys in the states, but it may just be that eBay have inadvertently made the mistake of forcing many of their loyal sellers into market savvy entrepreneurs, eager to use eBay to their, and not necessarily eBay's, advantage.

#10 Dissapointed, while you might not agree with all the "bleating", I personally find that those who are at the coal-face usually give balance to the "everything is better than ever" statements eBay executives put out.

eBay states a 10% increase in profitability for q3. At the coal-face (when you read through forums), people are asking "where are the customers" and "should I close my shop"? The fall-out is still rolling out even now as we speak.

So, yes, I do want to hear the bad news as well as the "everything's rosy" statements eBay want us to believe.

eBay have an agenda to make profit (and rightly so, they are a business), which is why one needs to take what is said with a grain of salt and look at the complete picture beyond the positive spin and the "better than expected" statements.

Great blog, Gary.

To Disappointed:

As a former protester of the fee hikes, etc., on the eBay Stores Board, I have listened to the cheerleading of eBay's Voices for far too long. Actually, based on your oh-so-familiar comments, I could hazard a pretty good guess as to who you are.
The bleating you hear is that of the sheep, the group to which the cheerleaders belong, and it is truly false and annoying, brought on by too many glasses of the coolaide.

Please, save your cheerleading for the eBay discussion boards where they are welcome. Welcome, because eBay has systematically banned all the voices of dissent from participating on it's boards. But, OH! We are still welcome to sell on the site!

Sarcastically Yours, a Former eBay Store Owner

Ever heard of the First Amendment... what follows is the product of a simple yahoo search, with the statements below coming from the very first result... Cornell's website, specifically the Cornell Law School.
*****************************************************
The First Amendment of the Constitution protects the right to freedom of religion and freedom of expression from government interference. See U.S. Const. amend. I.

Freedom of expression consists of the rights to freedom of speech, press, assembly and to petition the government for a redress of grievances, and the implied rights of association and belief. The Supreme Court interprets the extent of the protection afforded to these rights. The First Amendment has been interpreted by the Court as applying to the entire federal government even though it is only expressly applicable to Congress. Furthermore, the Court has interpreted, the due process clause of the Fourteenth Amendment as protecting the rights in the First Amendment (http://www.law.cornell.edu/constitution/constitution.billofrights.html#amendmenti) from interference by state governments. See U.S. Const. amend. XIV (http://www.law.cornell.edu/constitution/constitution.billofrights.html#amendmentxiv).freedom of speech!

Seems like Ebay have now grabbed the attention of the BBC's 'Watchdog' program:

http://www.youtube.com/watch?v=wCrzFkbYnWw

How on earth are Ebay going to attract new buyers when this sort of publicity is so commonplace?

"Please, save your cheerleading for the eBay discussion boards where they are welcome. Welcome, because eBay has systematically banned all the voices of dissent from participating on it's boards. But, OH! We are still welcome to sell on the site!"

I'm one who was banned forever from Ebay's discussion boards for simply posting my honest opinion. Eight of us were banned at the same time, over a year ago, for the same reason - some never suspended before - some never even receiving a warning before. Ebay does not like people coming on the boards and speaking the truth - they can't handle it. Yes, I still sell there because its to my benefit to do so but my opinion of them is at its lowest point.

Wow VC and others you really need to brush up on your reading comprehension. Notice I said..

"The tiresome bleating and arguments between the likes of Gary Sattler, Sigh, Ann Lambert et al was the main reason I stopped reading the comments sections of your posts."

You see, that was aimed at all sides on this boring and, as evidenced by recent rises in the stock price, irrelevant argument.

Good luck to you all. I will not be reading any further comments on this site... I've already broken that promise to myself once and it won't happen again.

*yawn*, dissapointed - I know exactly what you said. Reading comprehension is fine at this end.

How's your manners?

My response was to the fact you called one of bloggingstocks new bloggers a "moron". Thus my comment was to counter this, in that I find most of what Gary has to say to be of value.

Anyway, I don't know why you bother even posting here. You already stated you don't have eBay shares nor read the comments, so why stir trouble? Do you just want to comment on Gary's blog merely to discredit him?

Hi interesting Blog. Just researching Ebay as an investment. Looks like alot of people here don't like ebay. Need to do some digging and check out the archives.