Note from Liz: Opinions expressed are mine alone and should not be taken as financial advice.
eBay released Q1 2021 results yesterday - full presentation can be found here. I'll leave the financial analysis to experts in that field, however several things jumped out to me as a seller while listening to the call.
eBay has been on a "multi-year journey" to increase their take rate - justifying this increased take rate by saying they are providing more value for their users. So rather than get bogged down in financial statements, I thought I'd address some of the "value added" aspects of eBay's "tech led reimagination" from the seller perspective with excerpts from eBay's press release.
In Q1, eBay saw significant growth in its core categories. In the U.S., sneakers valued above $100 grew at a triple digit rate year-over-year yet again, and growth in luxury watches accelerated from 16% in Q4 to 38% in Q1.
I have to point out the use of "valued" here, which may mean something very different than "sold."
My recent sneaker buying experience on eBay has shown that it appears eBay's Sneaker Authentication program is displaying the Authenticity Guarantee on many shoes that are selling for less than the current $150 minimum.
In one case, shoes with the Authenticity Guarantee were drop shipped to me from Amazon and not sent to the authenticator. In another case, shoes that were won at ~$40 on auction are being sent to the authenticator, which makes me question if that is why eBay's authentication partner is experiencing massive delays.
Considering that eBay has recently raised fees in many other categories, effectively making other sellers subsidize authentication and no fee sales for sneakers, I have to wonder about the business logic involved in paying for shipping and authentication on low dollar sneakers that technically shouldn't qualify.
Another core category eBay focused on during the quarter was Trading Cards. During Q1, in the U.S., GMV for Trading Cards was over $1 billion dollars and active buyers in the category doubled. The company also announced a new image listing tool for top-selling trading cards. The new tool leverages computer vision technology to scan the card, which streamlines listing creation and can reduce time to list by up to 75%.
I'll give eBay some credit on this one. I haven't had a chance to really put it through the paces yet, but did a quick take on this new tool and it worked pretty well. Full review coming soon!
Keeping with its commitment to be the partner of choice to sellers, eBay launched a new unified listing experience that offers a cohesive design across all platforms to simplify the listing flow and enhance seller benefits.
Now this one just makes me wonder if CEO Jamie Iannone is at all in tune with what is actually going on in the marketplace.
The Unified Listing Experience has been almost universally panned by the selling community. The feedback was so loud and so "unified", that Harry Temkin was forced to backtrack a bit in the March Seller Check-in and admit the new design was not on point and needed "significant modifications."
We went a little too mobile on desktop, right? Too many clicks and mouse moves to complete your listings. Based on this feedback we're in the midst of making some significant modifications to bring back a lot of the inline editing to the listing tool so when you're on the desktop you don't have the right fly out as much.
On top of that, the jewel in the crown of the Unified Listing Experience was supposed to be the Background Removal Tool. I tested it out both on desktop and mobile and must say "tech led reimagination" is not what springs to mind when using the 1995 MS Paint level functionality of this tool.
eBay announced a new coded coupons tool for sellers to create custom discount codes for their buyers to share publicly on eBay.com or privately through their own marketing channels. Sellers can also print their coded coupons to include in shipped packages, helping drive repeat purchases from their buyers.
This is another one I'm cautiously optimistic about. Sellers have been asking for enhanced promotional features like this for a long time and at first glance, this definitely seems to be an improvement over the previous codeless coupon option.
One minor execution flaw here though - they forgot to mention anywhere in the creation flow or demo videos that there is an 8 character minimum for the code, which could cause some friction and aggravation for sellers who won't know until they get an error message while trying to launch their promotion.
eBay launched Terapeak Sourcing Insights, a new tool that helps sellers with a qualifying stores subscription analyze trending categories, top products, and signals what inventory is most likely to sell.
Terapeak Sourcing Insights - another example of a good idea with execution problems.
When this was first rolled out, I saw several reports from sellers that it "wasn't working" and they were seeing errors indicating they had not sold anything in the last 90 days when that was not the case.
What I discovered was that Harry Temkin and the seller tool team had again forgotten to include several key points in the workflow or demo videos for this new tool.
Most importantly - Sellers need to have at least $1,000 in sales/last 90 days to have access to this tool. This was only discovered through a process of trial and error. It is not made obvious and in Harry Temkin's demo video for this feature he said only that sellers need to have a Basic store subscription or above - no mention of minimum sales thresholds.
Beyond that, there was also a crucial step in the set up process that was completely missed in the demos and again had to be discovered by trial and error.
"Categories that you sell in will appear here, once you've made a sale" leads sellers to think there is nothing they need to do and they should expect categories to auto-populate in this section once sales are made, but that's not how it actually works.
Sellers must search and browse categories, then manually select "saved categories" to populate the information and use this tool - none of which is made obvious within the work flow. My full review and explanation can be found here.
I'm still working with Terapeak Sourcing Insights to see if I can get anything really useful out of it over time, but my initial take is it is another seller tool that was rushed out in a "not ready for Prime Time" version.
Hopefully they'll get this "early release work in progress" dialed in much faster than they did with the Listing Quality Report.
The company simplified its shipping badges in the U.S. and Germany, providing buyers with a new, clean and concise view of shipping speed and cost.
Again, this makes me wonder if eBay leadership is at all in tune with what is actually going on with their marketplace.
While presumably this decision was made with an eye toward the buyer experience, there have been multiple reports that the implementation of this feature has caused some major problems in how estimated delivery times are calculated and displayed.
In this example, eBay was showing the "Free 4 Day Delivery" badge on items the seller had set a 10-15 day handling time on.
This seller did everything right to try to communicate accurate information to the buyer - by circumventing that eBay has set false expectations that will inevitably result in a negative experience.
How does this "add value" for either the buyer or seller in this scenario?
I think eBay needs to do a much better job of demonstrating the actual value of the things they use to justify their increased take rate.
It's not enough to simply say "we have this great idea that we think is going to add value for our users."
When the actual user experience doesn't match up to the press release promises, there needs to be transparency and accountability that goes all the way to the top.
That is how CEO Jamie Iannone can really turn eBay into the "seller partner of choice."
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