Make no mistake: eBay (EBAY) is heading for a wipeout in the not-too-distant future. The company’s latest Q1 results reveal a platform that’s struggling to be relevant to users. Poor forward-looking guidance indicates management’s future uncertainty.
Published by Seeking Alpha’s Gary Alexander. “eBay shares have lost about 5% since posting disappointing Q1 results. But the company still sports a hefty $40 billion market cap. Anyone who can remember the fallout of Yahoo only a few years ago will recognize how hard Internet giants can stumble when they fall out of favor.
Amazon (AMZN), as we know, just raised the price of a Prime subscription to $119. Most Wall Street analysts are praising the move and saying consumers will pay the fee anyway. It costs nothing to use eBay as a buyer, yet eBay’s active buyer pool absolutely pales in comparison to Amazon. There is no better indication that eBay’s platform no longer jives with the modern consumer. Quasi-auction style or even clunky “Buy it Now” items are no longer the most convenient or most popular way to buy items on the Internet, outside of a few select niches.
Among technology stocks, eBay looks like one of the cheapest names at just 17x forward P/E and under 4x forward-revenue. But for a company that’s posting low single-digit growth, contracting profit margins, and has little hope of being relevant in five years, eBay is more of a value trap.
It’s now been more than 20 years since eBay opened its virtual doors, and the world has largely moved-on. eBay’s Q1 results reveal a company that’s struggling to remain relevant. And is having only modest success at growing its user base and GMV.
It’s difficult to envision this company still being healthy in five years. eBay already has tried many different measures to revitalize itself. All to mixed results. I’d place my bets elsewhere.” Full article permalink. eBay Q1 transcript.
It all boils down to bad management. And it should be pointed out that company management are not necessarily bad people. Chances are eBay management team has never used there own platform to buy or sell. It’s time to listen to your sellers and buyers. Read the posts on your own community forum. 💡
Doc was the 1st Tampa Bay Area used car dealer to sell on eBay in 1999. This Roller auction and eBay Local made our local tv news back then.
Doc has become very well versed on eBay since those early days. As he sees it, corporate execs have literally screwed this golden goose into the ground. Doc has over 40 years experience in the used car business. 10 of those years was mastering eBay Motors. he cringed every time they rolled out a new feature that often hosed something else up and took months to correct. It was their way or the highway.
Automobiles are the 2nd necessity after housing and are a huge income generator. Independent dealers are paying Car Gurus an average of 2k per month. Franchised dealers are paying much much more. Auto trader and cars-com are similar. But CG is now king of the road.
Motors bread and butter comes from sales seminars signing up dealers to list. Dealers pay a flat $50 per car listing fee for 7 days, plus listing upgrades and extended run time. NO Final Value Fee – means no back-end money is left. Back in the golden era fees were $40 list and $40 TSF (plus upgrades) motors FVF is called a transaction service fee due to dealer licensing laws.
Why eBay merged it’s motors niche site into the core is anyone’s best guess. Possibly since it took specialty programmers who were knowledgeable of the car business it was less expensive to maintain. All the old motors help pages and image urls have 301 redirects to the core website. With the exception the main former subdomain (motors.ebay.com) has no 301 redirect and returns a dns error. Any valuable old urls in articles comments etc (back-links) are wasted.
It’s sad thinking about how the once number one vehicle marketing niche website has faded into oblivion. Many of us former sellers urged eBay to verify vehicle buyers. Verify the car dealers were licensed and have their dealer bond on file in-case one went out of trust or other major problem. Nope management had blinders on. Just like this vehicle arbitration idea that went nowhere fast.