Last month eBay announced the launch of eBay Consignment, partnering exclusively with seller Linda's Stuff to offer consignment services for luxury handbags.
Today, eBay introduces a new consignment service, giving users direct access to expert sellers who will list and sell their luxury items on their behalf. Launching initially for designer handbags, the service will expand next year to include additional luxury categories, including jewelry and watches.
To power the service at launch, eBay has partnered with Linda Lightman, founder of Linda's Stuff, and a leading seller of luxury goods. Linda has operated a consignment store on eBay for more than 20 years, and she brings unrivaled expertise when it comes to selling designer goods.
Now it appears eBay is promoting the service (and the sole seller provider of the service) even further with a 25% off discount that can only be applied exclusively to items from Linda's Stuff with a big banner ad on the Designer Handbags category page.
How do we know eBay is funding this discount? Typically if a coupon is seller funded, that will be disclosed in the terms in conditions - like in the recent Adidas coupon code blunder.
The terms and conditions for the LINDATWENTYFIVE discount are pretty clearly for a coupon being offered by eBay.
When this consignment program was first announced, many sellers pointed out eBay has been down this road before with eBay Trading Partners and eBay Valet programs that were eventually shuttered.
And, of course, there used to be the Trading Assistant Program and the Valet Program, but those were for all items and eBay itself was not the seller. Both tanked because selling for others has too many problems and pitfalls.
Sellers also questioned the preferential treatment this program bestows by picking a single seller to be the sole provider and beneficiary of not just the hefty consignment fees for these sales, but also the additional advertising "bump" from being an eBay partner seller.
eBay has long maintained that their "competitive advantage" is they don't compete with their sellers (as opposed to larger rivals like Amazon), but it is increasingly clear they have no qualms about placing a very heavy thumb on the scale in favor of some sellers over others.
CEO Jamie Iannone stopped by Fortune as part of a media blitz last week and gave an interesting answer to a question about problems he initially set out to solve when he took the helm at eBay in 2020.
You became CEO at a time when eBay was running low on steam. What did you see initially as problems to solve?
Our first vector shift was to become more focused on not-in-season items. The company had been focused on new, in-season merchandise and was doing unhealthy things like buying traffic.
That's obviously a reference to the extreme discounting tactics his predecessor, Devin Wenig, undertook to try to goose GMV and buyer stats, especially before quarterly financial reports.
Under Wenig, eBay leaned heavily on sitewide "flash sales" of 15-20% off through the year and those promotions proved to be a double edged sword - once buyers get used to receiving discounts, they'll often wait for a sale before making a purchase, creating "one and done" or only occasional buyers.
Wenig's strategy was considered such a failure that Iannone felt the need to explicitly distance himself from it when speaking to investors in Q2 2021.
We've discontinued legacy tactics that led to low value, infrequent or one and done buyers. Our buyer base is starting to evolve based on this strategy. These high-volume buyers are growing compared to a year-ago and their spend on eBay is growing even faster. This higher-quality mix of buyers increases value for sellers and will lead to improved health of our ecosystem over the long-term...
..This is something that I laid out last July when we talked about the tech-led reimagination as being focused on turning buyers into lifelong enthusiasts on the platform and moving away from the tactics that we had in 2019 what was really just about the number of active buyers even low value buyers or one and done buyers.
However, despite his criticism of those past tactics, Jamie hasn't actually abandoned them.
eBay under his leadership continues to offer regular discounts to goose the numbers in select "vertical focus" categories like sneakers, watches, handbags, trading cards, jewelry, certified refurbished, and parts and accessories.
Not to mention, how much money has eBay thrown at expensive marketing campaigns and paid brand partnerships as part of this strategy?
And now eBay is funding a whopping 25% discount to drive sales for their new pet Consignment program so they can report to Wall Street that initial demand has been overwhelming and their strategy is working - the very definition of "buying traffic."
Jamie is 100% right that buying traffic is ultimately unhealthy for the business and not likely to lead to long-term positive results, which is why Wenig was rightfully criticized for it....so why does he keep making this same blunder?
If the definition of insanity is doing the same thing over and over and expecting different results, someone needs to do a wellness check on eBay's BOD, stat!
The continued misexecution is beyond ridiculous at this point and if the Board won't act to institute change, perhaps it's time for investors to force the issue.