eBay Q2 2023 Pre-Earnings Countdown & Highlights

Liz Morton
Liz Morton


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eBay is set to announce Q2 2023 earnings July 26th at 5:30 PM Eastern. Take a look back at some of the highlights from Q2 and what's happening so far in Q3.


Leadership Changes & Corporate News

The unionization fight rages on at TCGPlayer under new CEO Rob Bigler's leadership as eBay/TCG continue to delay coming to the bargaining table while appealing to the National Labor Relations Board to overturn vote.

Union Win Delayed As eBay & TCGPlayer Appeal Vote, Refuse To Bargain
TCGPlayer workers still fighting for first contract as eBay & TCG leadership continue to appeal vote & delay bargaining.

TCGUnion-CWA organizer Briana Thomas was one of seven young union leaders recently invited to the White House to meet with President Biden, Senator Bernie Sanders, and Acting Labor Secretary Julie Su to discuss labor issues facing their industries.

eBay TCGPlayer Union Leader Meets With President Biden On Labor Issues
eBay TCGPlayer union organizer Briana Thomas discussed industry issues with President, Sen Sanders & Labor Sec Julie Su.

eBay's Chief Information Officer Rami Mazid quietly left the company in April, following shortly after Chief Accounting Officer Brian Doerger's abrupt exit.

Interestingly, Mazid mentioned the role he played in eBay Mergers and Acquisitions specifically in his LinkedIn job description history, raising questions about whether his departure may also be linked to growing questions and concerns about due diligence and disclosure in the TCGPlayer acquisition.

eBay CIO Rami Mazid Has Quietly Moved On To Nutanix
eBay’s Chief Information Officer Rami Mazid left in April, on heels of CAO exit amidst growing TCGPlayer due diligence concerns.

In the wake of those questions and concerns, eBay seems to have developed a sudden interest in hiring for Mergers & Acquisitions strategy, operations and employee integration positions - including some roles with a specific focus on TCGPlayer.

Hopefully some new M&A talent will make for a smoother transition for eBay's latest acquisition, AI-powered digital ID and authentication company Certilogo, which was completed in July for an undisclosed sum.

eBay Acquires Certilogo For AI Fashion Authentication
eBay agrees to acquire Certilogo, an AI-powered technology for digital ID & authentication of fashion brands.

eBay Ventures announced new investments in pre-owned sporting goods marketplace SidelineSwap and luxury fashion rental app The Volte, which will hopefully see better results than their previous investment in Cudoni, which closed its door just 3 months after raising eBay-led ~$9 Million funding round.

A new partnership between eBay Ventures and TechStars also promises to help launch future ecommerce stars with their pre-seed accelerator program for early stage startups.

eBay Ventures Partners With TechStars On Pre-Seed Accelerator Program
eBay Ventures & TechStars launch Future of Ecommerce pre-seed accelerator for early stage startups.

eBay has also snagged one of the biggest names behind Goldman Sachs' Apple partnership to head up Global Payment Products & Risk.

Discover, Goldman Sachs Alum Joins eBay As Head of Payment Products & Risk
Abhinav Anand joins eBay as Global Payment Prod & Risk as Goldman Sachs tries to offload Apple partnership, consumer business.

End of quarter discounting appears to have been a big part of eBay's Q2 strategy, offering 10-20% off in key focus vertical categories and launching 20% off 4th of July sale a full week early to try to capture a last minute sales boost.

eBay Bets Big On End of Quarter Focus Category Discounts
As Q2 2023 winds down, eBay makes last minute push in key focus vertical categories with significant savings!

Payments

Ever since eBay began managing payments in 2018, sellers have been wondering if eBay earns interest "on the float" while payments are processing or when payments are held for various reasons.

The short answer used to be "no", but changes to eBay's help and policy pages indicate that may have changed very recently.

Does eBay Earn Interest On Seller Funds?
Unannounced edits to help pages indicate eBay may now earn interest on seller funds waiting for payout or on hold.

eBay is expanding Immediate Payment Required testing to auctions, even as buyer pushback to the requirement on offers increases.

Buyers Balk As eBay Expands Immediate Payment For Offers
eBay expands Immediate Payment For Offers, but buyers are balking at entering payment info to make offers.

Changes to Promoted Listings attribution including "halo" sales came into full effect starting in Q2, potentially increasing the amount of sales that will incur ad fees.

eBay is expanding the beta test for cost per click Promoted Display Ads to more sellers, opening up prominent above the fold placement to drive traffic to specific store categories.

eBay Expands Promoted Display Ads For Stores Beta Test
eBay expands Promoted Display Ads for Stores beta to more sellers as pressure to increase ad revenue grows.

Promoted Listings Advanced cost per click ads are officially out of beta testing and ready to expand with new single listing set up.

eBay Promoted Listings Advanced Is Out Of Beta & Ready To Expand
eBay Promoted Listings Advanced finally ready for prime time after 2 year beta test with new single listing setup.

eBay may be hoping the good news about Promoted Listings Advanced will overshadow the bad news that Promoted Listings Express ads for Auctions have not gained significant seller adoption, largely due to their costly upfront flat fee structure.

Germany is the first market where eBay has announced they will be ending the failed ad product, with auctions being rolled into the existing Promoted Listings Standard cost per sale product instead - will other markets follow?

eBay Germany Drops Promoted Listings Express For Auctions
eBay Germany ends Promoted Listings Express for Auctions flat fee ad product, adds auctions to Promoted Listings Standard.

eBay has also promised that their revamped View Item page design will move all ads for competing items below seller provided item specifics and description modules, however recently seen tests indicate they may be rethinking the way ads are displayed on listings all together!

Has eBay Finally Realized Promoted Listing Ad Stuffing Has Gone Too Far?
Apparent test removes most Promoted Listings ads from View Item page - has eBay realized ad stuffing strategy isn’t working?

Vertical Focus Strategy

eBay's vertical focus playbook seems to have slowed progress with smaller expansions of existing categories in place of adding new bigger and broader categories to the strategy.

Trading card authentication has expanded to Canada, sneaker authentication now includes children's shoes in the US, and Motors Parts & Accessories tire installation service partnership now includes more providers.

Streetwear is the latest category to get the Authenticity Guarantee treatment for very limited and select brands and eBay is also introducing a Certified By Brand program for watches, handbags, and jewelry.

eBay Launches Certified By Brand For Watches, Handbags & Jewelry
eBay launches Certified By Brand for luxury watches, handbags & jewelry as part of high value focus vertical strategy.

Problems continue to be reported with eBay's jewelry authentication partnership with GIA, including some troubling indications they may be misusing free USPS shipping supplies - which could be a federal crime!

Misuse of USPS Supplies in eBay’s Jewelry Authentication Program Raises Alarms
Seller raises alarm about shocking misuse of free USPS supplies by eBay Authenticity Guaranteed for jewelry.

As eBay's livestream shopping experience opens up to include auctions, the site has also taken the drastic step of restricting trading card case and box breaks to a very limited number of pre-approved sellers only.

eBay Cracks Down On Trading Card Breaks, Limiting To Pre-Approved Sellers
eBay is cracking down on trading card case & box breaks, will only allow pre-approved sellers as of July 18.

And the eBay Vault is now accepting direct submissions, allowing collectors to send in qualifying trading cards over $250, even if they weren't purchased on eBay.

eBay Vault Expands To Accept Direct Submissions From Trading Card Collectors
eBay Vault service is expanding to allow collectors to directly submit graded trading cards over $250.

Shipping

As eBay International Shipping ramps up, concerning reports of delays and missorting of package at hubs in Illinois and California keep stacking up.

eBay International Shipping Delays, Missorting Continue
As eBay ramps international shipping program with hubs in IL & CA, reports of delays & missorting keep stacking up.

eBay's transition to the new USPS Ground Advantage shipping method has not gone smoothly with mass confusion about what changes sellers needed to make to listings, technical malfunctions that disabled QR code shipping label feature, and a massive flub on updating pricing for eBay Standard Envelope.

eBay USPS Ground Advantage Causes Confusion & Concern
eBay USPS Ground Advantage updates leaves sellers confused about what changes need to be made & when.

eBay's INFORM Act implementation went much more smoothly than Amazon's, but sellers have been curious if the new regulation will cut down on "arbitrage dropshipping."

A new Shipping Performance Policy aimed at international sellers who sell on the main US marketplace may indicate the answer is "yes" as international account restrictions and shut downs increase due to dropshipping or item location policy violations.

Is eBay Cracking Down On Overseas Dropshippers?
eBay’s new Shipping Performance Policy leads to crackdown down on non-US sellers who dropship or violate location policies.

Updates & New Features

Just days after initially launching a ChatGPT powered AI description generator in May, eBay abruptly removed the feature from the app, blaming "bugs" for causing "a broken, confusing user experience."

eBay ChatGPT AI Feature Fails, Removed Days After Launch
eBay’s ChatGPT AI description generator not ready for prime time & pulled from production just days after launch.

The bugs were eventually worked out and the feature was finally restored in July.

In other AI related news, eBay is testing shopping discovery personalization for laptops, tvs, and smartphones on it's German marketplace in partnership with Zoovu.

eBay's executive leadership team has been making the media rounds pumping up a supposedly grand AI future for the company, but on a daily basis, basic critical site functionality continues to break down.

eBay Execs Push AI As Critical Site Functionality Falters
eBay execs make media rounds promoting AI efforts, while critical basic site functionality continues to break down.

Elliott Management's infamous 2019 "Enhancing eBay" letter aptly pointed out that the company had become distracted with future technology pursuits that added little value to the core platform which continued to experience critical functionality failures.

The consistent reliability of the platform is central to eBay’s success, and management must do all that it takes to achieve it.

While innovative endeavors in new pursuits like machine learning and augmented reality are promising future technologies, eBay’s publicly touted initiatives in these areas will add little value if the core platform continues to have critical functionality failures.

The technical infrastructure of the site has been particularly fragile the last few months with disruptive server errors becoming an almost daily experience for many users.

There are far too many glitches to list here, but by way of a few examples:

eBay's search functionality continues to suffer with non-responsive search bars and common keywords that should have hundreds of thousands of results returning zero results in error.

Sellers are often unable to create or revise listings  or have new business policies randomly created and applied to their listings without their knowledge.

Buyers have been unable to enter bids or make payments, and in one instance they were not even able to view item descriptions due to Captchas gone wild.

eBay's traffic and sales reports for sellers have experienced strange anomalies that appear to indicate the numbers may be being extrapolated from formulas instead of actual impression and view counts.

eBay says it's "just a display issue" but corresponding drops in sales have raised seller concerns that there is more to this issue than eBay is admitting.

eBay Reports Not Showing Organic Views & Impressions
eBay traffic reports appear to be missing organic page views as well as other anomalies.

And most embarrassingly, eBay experienced a meltdown on Memorial Day weekend that randomly relisted previously sold items and increased quantities on active listings without seller input, causing massive overselling leading to many cancellations and unhappy buyers.

One might wonder why eBay allowed such a major technical issue to drag on over a prolonged holiday weekend - just remember that all of those sales that never should have happened will be counted in eBay's Q2 GMV, even if they were later cancelled and refunded.

eBay Glitch Increases Quantities & Relists Sold Items 5-27-23
Sellers report eBay’s systems have gone berserk, randomly increasing inventory quantities & relisting sold items.

With the current technical state of the platform, perhaps it would be wise for CEO Jamie Iannone to revisit that letter from Elliott before eBay once again finds themselves in the crosshairs of investors growing weary of continued underperformance and misexecution.


That's it for the pre-earnings recap - stay tuned for full commentary on eBay's Q2 2023 earnings call!

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Liz Morton is a seasoned ecommerce pro with 17 years of online marketplace sales experience, providing commentary, analysis & news about eBay, Etsy, Amazon, Shopify & more at Value Added Resource!