Q1 data is telling us that the eBay changes are....

Working!  Since mid 2004, eBay datapoints have been painfully and irreversibly slowing.  Listings growth, GMV growth and active buyer growth.

Unless you've been living under a rock, you know that eBay has started rolling out the changes they announced back in January throughout Q1.

On Feb 20, gallery was set free and the new fees came into effect.

March 3rd, eBay rolled BestMatch as the default search. 

The results have been very profound, measurable and positive.  The much covered 'boycott' didn't cause any decrease in listings or buyer activity that we could see (I'm sure I'll get flamed for saying that, but there it is folks.).

First on Feb 20, conversion rates started a nice climb - especially for those sellers in the media categories that previously couldn't justify gallery.  By our calculations many media sellers saw conversions increase 2-5%.

Then the media+fixed priced sellers started listing a little bit more.  That saw some increased sales, and then sellers increased listings some more and that cycle is still continuing.

Then on March 3rd when eBay rolled BestMatch we saw an even larger and more across-the-board conversion bump.  We've got some sellers seeing a 10-20% increase in conversions.  I haven't seen anything this dramatically positive on eBay in a LOOOOOONGGGG time.

If you're still with me, listings are up, conversions are up and that means..... yep, GMV is up nicely and so far it's continuing its upward path.

As sellers see the results, they will tend to continue to list more (to balance conversions) and if the conversion rates hold, we'll see even more GMV coming out of the system.

At ChannelAdvisor we provide our customers with lots of real-time data on their sales and other vital stats and it allows them to react quickly so they tend to be ahead of the curve.  As the long-tail of eBay sellers see their eBay bills and start doing the math, they also will start to adjust their listings volume.

The much maligned DSRs are working.  Once BestMatch kicked in, we saw the difference between seller exposure really spread out dramatically. Since the S+H cost DSR is usually the lowest, it's the one that tends to key seller advantaging/disadvantaging.  When sellers heard the 5%/15% discounts, they did the math and for most it didn't make sense to change their S+H prices.  But now when sellers see they are losing share/conversions due to poor S+H prices/ratings, sellers are starting to test different communication practices and look for ways to lower S+H fees.  If eBay's data that buyers don't like eBay's S+H, then the focus on S+H prices and practices should be dynamite for the ecosystem.

For the first time in years, I'm starting to see a light at the end of the dark eBay tunnel we've been in.  I'm interested to see when these trend plateau's out and if eBay will turn the crank again on fees, lowering listings and raising FVFs.  Also we still don't have Finding 2.0 or the feedback changes out yet so there are two other big changes out there waiting to hit the system.

It's going to be interesting to see how Q1 came out for eBay - particularly on the y/y GMV growth which I think should look pretty good.  I'm also very curious to see if there are any signs of life in the active buyer data that eBay typically reports.

Usually analysts ask if these positive eBay indications mean bad news for Amazon.  We don't see any slow down there so I don't think so, it's not always a zero sum game at the seller GMV level and while eBay is perking up it's going to take some time for it to have any impact on Amazon's incredible momentum.

Disclosure: I am long google.
(Note: eBay Strategies is being picked up by Seeking Alpha now so this is required.)

Comments

[Sam]

We're a year later now, what's the deal with Q1 now? doesn't look too good...

[LegendsOfBatman]

Scot;

I am not sure if you are aware of this; but, ebay has padded their listings, spun things so far that anything that they produce, is unreliable.
They could tell the truth, and somehow it would still be a lie.

So, when they claim listings are up 16% over last year; I seriously doubt that.

I hope you don't get affected by ebay's new changes in a negative way. But, somehow, I cant imagine that not happening.
First, HOW can tying DSRs to searches be a good thing?
It moves bad sellers down?
Try THIS idea: If a seller is REALLY bad-- boot their butts. Why put good buyers at risk? THAT is a reveloutionary idea that would protect the community.
It offers powersellers a 5 or 15% discount.
For a month or two. Wait till pissed off buyers who arent happy start lowering the ratings. DESPITE a seller's best efforts. Ebay has made the bar so high, that very few would actually benefit.
Oh; and how about this one: If your DSR is at 4.0 ebay red-letters a warning you have a low DSR rating! Good luck getting buyers to buy from you. YES! Even GOOD sellers are getting redballed.

How is it PayPal can hold funds 21 days?
They're not a bank.
Whatever. They act like a bank, and need to be treated like a bank. They've been sued relentlessly over illegal holds. Theyve paid out millions. Apparently it is cheaper to pay out millions, than to give up the interest.

Wait til the next wave of "pissoff the sellers" comes around. Thats when ebay allows buyers to extort them.
Its against ebay policies.
Whatever. So is not paying. But, how long does it take ebay to remove bad buyers?
So is not honoring a sale. But, how long does it take ebay to remove bad sellers?
And, ebay has already said that just because we complain, doesnt mean they will be removed. (The ONLY thing they have said that I believe).
Its against the law in nearly every country to sell child porn. But, when told of a seller selling child porn, how long did it take ebay to kick the seller? And, was bringing in the FBI sufficient? NO. It took TWO years, bringing in the FBI AND the media. THEN ebay FINALLY said, "psst. guys, we have to stop collecting fees from child porn sellers."
And they want us to trust us with extortion?
Whatever.

I got suspended, because I posted in a DSR workshop that perhaps Ebay should take some of its own advice. For example, I wrote, "Ebay tells US to put ourselves in the buyers shoes. Perhaps its time for ebay to put themselves in OUR shoes". And, "Communication is the most important part of a successful business. Then WHY does ebay completely shut off communication with its community?"

I believe ebay is about one thing, and one thing only:
Getting rid of the peon sellers. If sellers dont sell 50,000 a month or more, they dont want to hear from us. They've made that obvious. Now its even more obvious.

[Billoment]

I left this a couple of days ago and it did not get published. Another glitch?

Well Scot, so far it has been an interesting Q1. So far for this year January sales were up 15%, February were down 9% but March is blowing everything away. I passed the sales total for March of last year on the 10th. Right now for March I am up over 32% and it is only the 14th. Is this because of the changes? That could very well be the cause but I am also getting a lot more International sales than usual obviously because of the great exchange rates. People overseas are finally waking up to the fact that their Euro, or whatever they use, is buying a lot more regardless of the shipping cost. That is also another factor that you have to put into the equation. As always a little blip does not make a trend. We will have to see how this plays out in the next few months. I feel though that the Best Match definately has something to do with it.

Bill

[John]

Yes, conversion is up. Should the economy and gas pricing be taken into consideration here? People have begun abandoning trips to the mall and opt to shop online for deals. Could the slumping economy be part of the factor with the eBay "success".

[Carol]

cozy 'lil post. after all your interests are "ebay! ebay! ebay!" and as CEO of a product that benefits from ebay sellers' cash it wouldn't do for you to be at all negative. Your blog is being picked up by seeking alpha you say. I saw that. I saw that mystery blogger "only ebay" quotes you in his current posting. all so cozy. will get even cozier when ebay's own corporate blogger links to you and only ebay as he said he would in the FSB article. can we see some actutal numbers, especially concerning how best match is the best thing since sliced bread?

[KevinL]

My wife has found 3 pairs of fish sticks frozen into the shape of a cross, all in the same box. She is trying to sell them on ebay. Do you have any advice on how to get this auction ( http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&Item=270219896321 ) noticed?

[Ed]

Scot

I'm not sure if you're able to correlate the data this way, but the medved graph for the last fortnight implies that the UK's Free Listing Day (6 Mar) listings were displayed on the US - the jump is just too steep to be otherwise.
Additionally, considering those listings are not supposed to be seen on the US according to UK policy, it seems strange that the vast majority of our buyers for those listings are US residents.

I'm suspicious there is some more eBay numbers-cooking similar to the shopping.com listings in core fiasco - right now I believe eBay management will do anything they can to persuade the members that their policies are correct, because to back down would simply lose far too much trust from the paying customers, and from Wall Street.

Ed

[tj]

And of course you are joking right?...just taking a quick look at Medveds sell thro rate says it all…worst downward spikes ever this year (below 25%) and still on average hovering around 30-40%..so where are the fantastic numbers ???????

Every power seller I know all say the same …almost NO SALES…not everyone sells DVD’s etc

Next month is April…as in the 1st

[tj]

And of course you are joking right?...just taking a quick look at Medveds sell thro rate says it all…worst downward spikes ever this year (below 25%) and still on average hovering around 30-40%..so where are the fantastic numbers ???????

Every power seller I know all say the same …almost NO SALES…not everyone sells DVD’s etc

Next month is April…...as in the 1st

[Billoment]

Well Scot, so far it has been an interesting Q1. So far for this year January sales were up 15%, February were down 9% but March is blowing everything away. I passed the sales total for March of last year on the 10th. Right now for March I am up over 32% and it is only the 14th. Is this because of the changes? That could very well be the cause but I am also getting a lot more International sales than usual obviously because of the great exchange rates. People overseas are finally waking up to the fact that their Euro, or whatever they use, is buying a lot more regardless of the shipping cost. That is also another factor that you have to put into the equation. As always a little blip does not make a trend. We will have to see how this plays out in the next few months. I feel though that the Best Match definately has something to do with it.

Bill

[Dan Wilson]

Interesting comments and it will be interesting to see what the Q1 results are when they're out in April.

But, of course, we shouldn't be surprised. eBay know that they need to provide a better buyer experience to ensure that sellers can continue to be successful. Part of that is letting the cream rise and giving some not-so-good sellers a kick in, what we Brits call, the arse. eBay isn't suicidal so it's heartening that these course corrections are working and the antis need to reassess their positions, enagage their brain and see what their experience is and change behaviours where needed.

Also, not surprised that the strike has been unsuccessful. With these things it's always a case of creating more heat than light. And the lack of coherent messaging and (frankly) aims damaged the endeavour. I'd also argue that press coverage generated has not been a good thing, on the whole, for professional sellers.

[Dominic]

Yes, I've seen my conversion rates increase and it's about time. Thanks for the article.