Datapoint to ponder...

While working on tomorrow's webinar, I re-read eBay's Q2 results.

They reported that 43% of eBay's business is now fixed-price.  That would make eBay 'fixed-price' effectively a $27B marketplace.  Analysts guesstimate Amazon's 3P GMV at $4-6B.

Also, eBay's definition of fixed-price understates it substantially I believe. In eBay's definition it would be store listings, fixed-price listings and auction/bin where the user chose BIN.

Think of how many auctions close with one bidder.  In my mind those are transactions that should/could have been fixed-price.  I'd say that something like 40% of the auctions I checked in our dataset have one bidder.  With this expanded Wingo definition of fixed-price, I bet fixed-price is already 60-70% of eBay's GMV.  Also, eBay's 43% is by GMV, not transactions.  Most Motors/passenger vehicles are still auction-style listings and media is dominated by fixed-price so auctions I'd bet have a much higher ASP than fixed-price, so if you looked at the %'s by transaction you could get this number into the high 70%'s.

I guess my point is that eBay maybe much more down the fixed-price path than everyone realizes....

SeekingAlpha disclosure: I am long google and ebay

Comments

[meg witless]

hey folks,

if you type in an ebay search for "NO PAYPAL and click the box to include descriptions, guess what turns up??? 6,439,678 people who refuse to take paypal!!! six million people refuse to take paypal....

[Jeremy]

Scot, it is quite apparent in your writings (recent and past) that you wish for eBay to become a fixed-price venue. It is rather shameless as your company totally benefits from eBay becoming a fixed price venue. To suggest that auctions that close with only one bid are fixed-price is obsurd and shows that you will do everything you can to convince anyone who is reading that auctions are dead. You even do this when the press quotes you.

These suggestions make your data unscientific. I don't want to read "Wingo data", I would to read facts. Your writings are bordering, if they have not already reached the point of, being totally unobjective. By the way, the reason that so many auctions end up with only one bid is that with Best Match their visability has been reduced. Bidding wars at the end of an auction have practically died since time ending soonest is no longer the default.

I guess you and Donahoe will both do a little victory dance should eBay finally do away with auctions all together. I for one don't think for one minute that auctions are or were dead, it is eBay and comments from those like yourself who are intentionally killing them.

[Joe]

The last listing sale, I did nothing but fixed price. Did good with only about $20 up front exposure. The new selling tier should do well for me, at least at first. Down the road, we'll see if sell-thru declines...

Joe

[Fruity]

Do they include fixed price based on listing or do they include multi-qty listings into the equation? And how does GMV get calculated with multi quantity. Can you explain to me in a way so I understand Scot?

ps. Did you notice that at this Q2 they didn't call out store counts? They have before. Did that suddenly become a figure the analysts no longer needed to consider

[Alan]

Scot:

When I saw this statement in the earnings release I pondered the opposite. 43% of listings were fixed price, not 43% of dollars. Statistics can be very misleading! Is "business" considered listings or GMV? Most people preparing the release/presentation would use the definition that would suit there message.

BTW, I'm a new reader. Great blog.

Alan

[Jose Flores]

Just wanted to tell you that sellers prefer auctions over fixed price items because many times, we list at auction just at break even point allowing us to move inventory as required by the business but giving us the opportunity to make more money when market conditions are appropriate (i.e. favorable demand vs offer). Big retail stores and manufacturers spend a lot of time on marketing intelligence research plus finance calculations of costs and forecasting for buying parts and promising volumes to their providers. eBay took care of all these for sellers, just place it there and the market will define its real value, you are never undersold and many time you make a lot more than you expected. On the buyer side, the time constraints function as scarcity selling tactics that many times convince the doubting buyer. There is a big retailer called eCost that actually implemented en time and quantity left on their site (even travelocity for that matter). If ebay pushing it the fixed price route, would be a major mistake. BTW I don't agree with counting one bid buyers as fixed price, in my opinion BIN (as in Auct w BIN) should not be counted either. BIN is maximum value I expect to get and usually a get it now type strategy. Whereas fixed prices are set as minimum possible price to sell quickly, but still making profit. See the difference? - Pricing for me is a lot more difficult than you might think (because listing fees are major part of my costs and that is affected by the performance of the item). BUT: Why are you talking about that percentage? If you are trying to compare ebay and amazon, I think you are missing the user experience factor. Haven't you read that the new retail is more about experience than the actual product?

[anon]

"eBay maybe much more down the fixed-price path than everyone realizes"

Which is why it is in the jam that it is with 4+ years of stagnant stock price. Fixed price is a lousier business with lots of competitors.