I was listening to a Yahoo Finance interview with eBay CEO Jamie Iannone this morning and one statement caught my ear -
So take our sneakers business. For now sneakers over $100-- over $200, we're actually authenticating them, using a great technology from Sneaker Con.
At about the 1:41 mark, Jamie first said $100, then stumbled briefly and corrected to $200 - however the minimum price for authentication has been $100 for new condition and $150 for used condition since June 2021.
Was this just an embarrassing mistake or does Jamie know something we don't yet?
As of today, the FAQ page for eBay Authenticity Guarantee For Sneakers still shows the minimums at $100 and $150, depending on condition. Searching sneakers currently for sale showing the Authenticity Guaranteed badging, those minimums appear to still be in use.
eBay support on Twitter has confirmed the $100 & $150 stated in the FAQs are still correct and that they are not aware of any upcoming changes, but that doesn't necessarily preclude the possibility that there could be a change on the horizon that hasn't yet been communicated to support.
It wouldn't be the first time there has been a change in the minimum price for sneaker authentication. Earlier this year, I took a look at the trends of how these prices have changed over the life of the program.
Just comparing the prices for new condition - in November 2020, Authenticity Guarantee applied to shoes of certain brands over $200. That was dropped to $150 in early December 2020, presumably helping drive Holiday/end of quarter/end of year sales in the sneakers category.
Then in January 2021, eBay opened the floodgates on authentication and lowered the minimum to $100, where it stayed for the rest of Q1 2021, despite many reports of the authenticator being overwhelmed, causing 3-4 week+ delays.
eBay raised the minimum back up to $150 in early April, citing a "surge in demand" - a surge which seems to have been almost entirely created by eBay themselves, possibly in an attempt to boost Q1 financial performance.
Then in June 2021, just in time for a last minute Q2 bump, eBay dropped the minimum back down to $100 where it has remained since.
Considering the strategy last year was to drop the minimum to drive additional holiday sales, it would seem very odd to do a complete 180 and significantly increase the minimum just before the holidays this year, if that is in fact what eBay plans to do.
However, one other significant change happened this year - eBay recently acquired Sneaker Con's authentication business.
It's also important to note that eBay makes no final value fees on sneaker sales over $100. That's right, 0% Final Value Fee, no $0.30 fixed per transaction fee, and no insertion fees - meaning the costs of the entire authentication process are not being paid directly from these sales.
My take - now that eBay owns the authentication business, they are going to be much more concerned about those costs. Looking at the trends over the last year, it's clear that eBay uses the minimum price for authentication as a lever to either open up the floodgate and boost sneaker sales when needed or pump the brakes to slow the flow.
It will not surprise me at all if they raise the minimum back up as a way to control costs going into 2022.
It also will not surprise me if they look for ways to change the fee structure as well, though the free to sell over $100 deal is going to be harder for them to walk back from without losing market share back to competitors like StockX.
It will also be interesting to see if eBay starts to crack down on the Buy It Now price manipulation that has caused $0.99 sneakers to be sent to the authenticator in the past. I suspect now that authentication will be "in house", it may be handled much more like the program for handbags with strict enforcement of minimum pricing.
For now we'll just have to wait and see, but I'll update this story as soon as more information becomes available.