ChannelAdvisor

What was the impact of the Olympics on e-commerce?

Recently in the July Same Store Sales report, I mentioned that we were getting a lot of questions around the impact (most folks assume negative) on e-commerce from the Olympics.  The usual argument goes that with folks around the globe focused on the two week event that only happens every four years, perhaps e-commerce suffered.

To look at this in detail, we compared the Olympic roughly two week period from July 27 to August 12 for 2012 to 2011 to compare apples to apples for 2011 (non-Olympic year) to 2012 (Olympic year).  We then put in the June, July datapoints as reference and came up with the following data:

Here are our channel-specific observations:

• eBay - slightly below July trend, but a < 3% delta is attributable to natural causes such as days of the week in the consideration set.
• Amazon - Amazon was off the July 44% trend by 7.7% which is a bit more of a blip than eBay
• Search was off 4.4%, probably not material
• CSE declined 1.1%, again a negligible difference.

Overall Olympic Conclusions

In a perfect World, we'd have a better control set where we had a pure 'no Olympics' data set and a 'with Olympics' dataset.  Based on what we're seeing, we don't think there was a material impact caused by the Olympics.  

In conclusion, while an interesting hypothesis, we don't see any material evidence that supports the 'Olympics caused an e-commerce slowdown' theory.

SeekingAlpha Disclosure - I am long Google and Amazon. eBay is an investor in ChannelAdvisor where I am CEO.

eBay's Fast N Free Program is starting to ramp significantly for consumers (and sellers)

In October of 2011, eBay quietly introduced a pilot program for a shipping improvement called Fast N Free.   The program didn't get much buzz with sellers or buyers in it's initial roll out.  However in the last month or two, we've seen a strong uptick from sellers increasingly interested in the program.  They are interested because items that are in the program are converting substantially higher than those that are not. How much? Stay tuned we have some exciting new data on the program in this post!

Throughout this post, I'll refer to the program by the FNF acronym to save my fingers some work and also keep from slipping up and calling it Fast N Furious, which I have done in many meetings lately ;-)

In addition to seller questions, we're getting a lot of folks on Wall St. wanting to know more around why we are seeing eBay's SSS increase.  I generally say that there's no specific silver-bullet, but eBay has 5-10 programs that are contributing to a better buyer experience.  FNF is a great example of that type of a program.

So we're going to take a deep dive into FNF covering:

• Why is FNF hitting the radar now?
• The FNF Buyer experience
• The FNF Seller experience
• 6 tips to increase your FNF sales
• Conclusion - where we think eBay should go with the program

Why is FNF hitting the radar now?

Before jumping into the buyer and seller experience of FNF, you are probably wondering why we are talking about a program that essentially a year old and under the radar.

We asked Michael Jones, VP of Merchant Development at eBay: "Why are sellers suddenly getting excited about this program?" and he shared these stats on the program (all stats from Q2 2012):

• 12.7m - FNF transactions.
• 6.5m - unique FNF buyers.
• 140k - average daily number of FNF transactions
• 10% of the items viewed are FNF eligible - this is up from 1% items viewed FNF eligible in Holiday 2011

As you can see buyers are voting YES for the program with their wallets, which always gets sellers' attention.

The next section reviews the buyer experience so you can see why buyers are really eating up FNF.

FNF Buyer Experience

When you shop at most online retailers, you have a good bit of clarity around the cost of shipping and estimated arrival times. eBay has been focused on free shipping over the last years and now with FNF is adding a lot of clarity around the arrival time aspect of buying on eBay and the program highlights those items that are not only free, but fast (arriving in 4 days or less).

As a buyer, you don't see  FNF until you get into a listing (it's not integrated/visible in search results).  You will notice a green truck, the Fast N Free green text, and finally an unusually specific delivery time in the "Delivery" section of the listing.  In the following figure, you can see an example.  The red box was added by me to highlight the FNF part of the listing.

 

When the consumer hovers over the little question mark, this further messaging is provided:

To summarize the buyer experience, prior to going to the listing, the free shipping was highlighted, and this FNF messaging in the listing adds the details that not only is it free, but it is fast (in this case 3-4 days).

Ok, I'm a seller, how do I take advantage of this program?

FNF Seller Experience

One of the nice things about the FNF program is that as a seller there really isn't anything above and beyond what you are already doing that you need to do to benefit from the program.  eBay has made two changes that have increased the number of items that are qualifying for the program:

1. In the Spring release, they raised the eTRS shipping bar requiring tracking, faster 'time to ship' and uploading of tracking info.  This gave eBay a lot more data to put into the program. Without tracking info, there's no way to for the algorithm to know that when you ship from zipcode X to Y it takes Z days.
2. In the Fall release, eBay is releasing (September timeframe) a dashboard for FNF that will give sellers move visibility into how many of their items are qualifying.  This will 'close the loop' and allow those sellers that really want to be in the program the ability to get FNF qualified for more of their items.

One question we get a lot is: "If eBay tells buyers my item will be there in 4 days, what happens if it takes > 4?"  The good news is that eBay will protect you in this situation and give you an automatic 5-star on your shipping time DSR, even if your item doesn't arrive as they have anticipated.  This dramatically reduces any risk from the program.  That being said, we do occasionally have sellers that do not want their items in the program and there is an account-wide setting that you can use to block your items from the program if you really want to (not our recommendation).

 

6 tips to increase your FNF sales

We've been getting a lot of questions from sellers about the program, so hopefully we've addressed the fundamentals of how it works.  Here are six tips to increase your FNF coverage (and sales):

1. Free shipping is a must and has the benefits of improving your BestMatch score, DSRs, etc.
2. Make sure to follow the Top Rated Seller requirements around time-to-ship, tracking information, etc.
3. Make your standard shipping method, one that gets a package to the majority of the continental US in 4 days or less (USPS Prio, FedEX, UPS, etc.)
4. Listings with 1 day handling automatically qualify
5. Starting September 24th, the dashboard will be available - definitely check that out.
6. Some of our customers are starting to consider some warehouse and shipping provider changes.  You may want to consider something in the mid-West that is more central, or some of our customers with warehouses on the East/West coasts are exploring multi-warehouse type opportunities.  Also consider moving your top sellers to fedex/ups shipping.

 Conclusions

4 days is great, three days is better, two days - even better!   We would like to see eBay use this program to continue to raise the bar on shipping.  Amazon is conditioning consumers that 2 day free shipping is the norm and one day is a relatively inexpensive upgrade.  Of course, we've long pointed out that eBay passes the costs of these programs onto sellers.  We'd love to see some more sophisticated fee discounts for sellers to help defer the costs that this level of service are sure to generate.

As we point out in our SSS data, eBay is doing a lot of things right and this program is a great example.  On its own, it is a small needle mover, but with several of the other programs eBay is executing well on, it really is adding up to a better experience for buyers.  

 

We strongly recommend sellers look at embracing this program for Holiday 2012 and thinking long-term about the implications of a new eBay standard of 4-day shipping going to 2-day shipping.

 ChannelAdvisor and FNF

For those readers that are customers, we are already doing everything to help you get FNF coverage:

• Automating postings to eBay
• Order management and routing to top shippers
• Uploading of tracking
• Integration with top CRM systems to make sure you are monitoring consumer issues.

As eBay rolls out the dashboard, we'll look at ways we can innovate and help you grow your sales around the program.  If you have any questions, feel free to contact us via ssc.channeladvisor.com

SeekingAlpha disclosure- I am long Google and Amazon. eBay is an investor in ChannelAdvisor where I am CEO.

 

Groupon's interesting Q2 results: A new marketplace channel emerges! Plus - LivingSocial is in the game too...

Over the last year or so, long-time readers will recall that I've been keeping a pretty close eye on Groupon's offering called Groupon Goods (GG for short).  The first post from Sept 11 is here, second post from Oct is here and  and Jan 12 here.

In those posts, we were very interested in GG because it seemed to leap out of the gates.  Yesterday when Groupon announced their Q2, something interesting happened:  Because GG now is > 10% of their business, it became 'material' and they disclosed a lot more details about the program.

I thought this was a good time to update everyone on what we're seeing and what Groupon disclosed around this exciting new area we are tracking that we call Daily Deal Marketplaces (DDM).

If you are an online merchant, I think the emergence of this DDM channel is one of the biggest e-commerce developments of 2012, so we are going to dive into this in-depth with these topics:

• What is a DDM and who are the players?
• How big is Groupon Goods?! (The cat is out of the bag!)
• How can I participate in this exploding new channel?
• What's the future of this channel?
• Sidebar for my Wall St readers

What is a DDM and who are the players?

There are two primary players in the local daily deals space: Groupon and LivingSocial.  As you know, these companies have exploded onto the scene in the last four years and email millions of customers daily deals for ~50% off local services.

Back in 2010 they did some experiments with gift cards at e-commerce shops (gap.com for example).  Then we started to notice that they were both experimenting in Europe with actual physical, e-commerce type goods in addition to local services.

Last year Groupon introduced Groupon Goods and seemed to have a pretty strong Q4.

The way it works is:

• On a weekly, heading towards daily basis, GG highlights 10-20 products
• These products have deep discounts and limited quantities - when they sell out they are gone.
• Groupon is able to integrated GG into it's many touch points with 38m active buyers:

1. It's on the site here.

2. 30% of groupon's traffic comes from mobile and GG is featured prominently in the mobile app:

3. Groupon sends out a specifc Groupon Goods email twice a week.

4. Groupon has started carving off space in the daily emails for GG: (this is the bottom 1/3 of the daily local service emails)

Between all those touchpoints, GG is hard to miss and this expansion of exposure has led to explosive growth as you'll see in the next section.  

Before we jump to that, Groupon is a big player, but not the only game in town.  LivingSocial is now active in the 

LivingSocial enters the game

In mid July, LivingSocial quietly launched their GG competitor called LivingSocial Shops (LSS), Like GG, LSS has it's own branded weekly email and is now accessible from the site: (notice the left nav - these are the deals fo rthe week of 8/13/12)

When they launched, I ordered a couple of items from LSS and here's what the packaging looks like:

Since launch, LSS has been ramping up the frequency of emails and the number of deals.  As of this writing they on a weekly frequency (Wednesdays) and pushing 16-20 products a weekly cycle.

How big is Groupon Goods?

With that overview of the DDM space behind us, let's dig into what Groupon disclosed yesterday.  First and most interesting was they disclosed the GMV/sales for Groupon Goods for the first time and gave Wall St. a rear-view mirror on the numbers as well. 

Here's the details Groupon revealed on the Groupon Goods GMV for the last year:

WOW!  Your eyes are not deceiving you, GG grew from $19m to $65m - a 3X jump in one quarter.  Annualized, that makes GG a > $200m marketplace and if you even assume some conservative growth, it has a shot at $300-400m this year.

A couple of other interesting tidbits from Groupons Q2 results and conference call:

• 38m active buyers across all of Groupon
• 1/3 of traffic is mobile
• In Q2, they sold over 54,000 heart rate monitor watches in one day
• In a 72hr period they sold over 181,000 pairs of earrings

Finally, here's a quote from the call transcript where Groupon CEO, Andrew Mason, answered a question about what they need to do to continue to grow the GG business:

So what else do we need to build in order to get Groupon Goods going? I'll tell you, the success that we've had in Groupon Goods, I think, is a reflection of the power of the consumer brand that we've built through our local business. Our customers think of us as a way to find unbeatable deals on great stuff, and we are able to transfer that same value proposition from spa packages to home ice cream -- or home yogurt kits, I think we're selling one of those today. For $15, you can make your own artisan yogurt. So we've been able to do that largely off of the brand that we've built and the internal infrastructure for procuring great deals. It reminds me of the very early days of our local business where consumer demand outpaced the technology offering that we had. We still don't have a lot of basics that we think will drastically improve the customer experience. We don't have a very shoppable marketplace where customers can come in and pull deals. We only really allow customers to engage with the good deals on our terms via e-mails that we're sending every week. So there's an awful lot to do. And the value proposition, the brand that we've built of offering unbeatable deals on high-quality stuff and having the trust of our customers, we think, is what's at the source of the success that we've had thus far, and we think that we can continue to leverage that for success in the future.

How can I participate in this exploding new DDM channel?

As Groupon (and now LS too) are scaling up, we are finding more and more merchants are interested in exploring this channel.  We've actually had many ChannelAdvisor customers explore the channel with some very interesting results.  Like any online channel, it's not for everyone.  If you have:

• Deep quantities
• Liquidation type items
• The ability to mark down significantly from retail (30-60%) 
• Inventory on hand
• Inventory that fits seasonal promos like Back to school, holiday, etc.

Then this could be the channel for you.  If you are interested in learning more, let your ChannelAdvisor rep know and we'll put you in touch with the folks running these programs at Groupon and LivingSocial so you can learn more.

What's the future of the DDM channel?

In the Mason quote above, there was this hint: "We don't have a very shoppable marketplace where customers can come in and pull deals. "

What that means, or at least my interpretation is that today, GG sends you 10-20 deals and that's it.  What if you went to GG and there were hundreds, thousands, tens of thousands of deals available?  What if some where time limited, some were persistent, and they were across all different categories?  You'd essentially have a more eBay/Amazon like experience, but with just 'deals' type inventory.

If that seems far fetched, all you have to do is look at what Groupon and LivingSocial are doing outside the US and you'll find they are well down this path in some markets and for example, in Australia, Groupon already has all of this live today.  Here's grouponshop.com.au:

Notice:

• Thousands of deals available all the time
• Category and search navigation like a marketplace
• Hundreds of sellers
• Shopping cart!?
• Hmmmm

Will the US and EU go this route?  Stay tuned!

Sidebar for my Wall St. Friends

It's interesting to see the similarities between Groupon's change in mix (from local services deals to goods) and Amazon's from 1P to 3P.  Amazon is moving from gross to net and low margin to higher, while Groupon is moving the other way, but still the similarities are interesting.  Perhaps in 2-3years, GG will be the bulk of the biz and Local deals will be a side biz... At this growth rate and with technology like we've seen in AU, it maybe sooner rather than later.

SeekingAlpha disclosure - I am long Amazon and Google, eBay is an investor in ChannelAdvisor where I am CEO.

 

 

July 2012 ChannelAdvisor Same Store Sales (SSS) for eBay, Amazon, Search and CSE

Note: This is a monthly feature published by ChannelAdvisor highlighting the Same Store Sales (SSS) across our wide range of ~3000 retailers and ~$3b in GMV.  Details on the SSS including methodology and schedule can be found in January's post.

Today we are releasing July 2012 data for Marketplaces (eBay/Amazon), Search and Comparison Shopping Engines (CSE) along with supplemental data.

Coming soon...The Olympics effect

Before we dive (jump, leap, shoot, run) into July's results, we've been getting a lot of questions from both sellers and Wall St'ers wondering about the impact the Olympics had on e-commerce.  The 2012 London Olympics ran 7/27-8/12 so a total of 16 days, 4 of them in July and 8 in August.  We're crunching the numbers and later this will will have some specific observations on the impact (or lack thereof) the Olympics had on e-commerce.  Stay tuned.

July 2012 SSS Results 

• Amazon - Amazon continued it's 2X e-commerce growth by coming in up 44% y/y growth for June.
• eBay -  eBay came in at a whopping 28.2%, the largest growth number we've seen for eBay since we started tracking SSS @ChannelAdvisor!!  Details in the eBay section below.
• CSE - Comparison Shopping Engines decelerated coming in at down 9.9%.
• Search - Search continued to be a bit sluggish coming in at 9.6%.  Search details are below.

SSS Chart 

The following chart details the SSS data for July 2011 through July 2012: (click to enlarge)

eBay Details

eBay's July y/y SSS 28.2% growth was rec0rd-smashing showing.  To get a feel for what's driving the marketplaces' performance, here are the interior datapoints for the month:

• eBay auctions - down 1.1% y/y - eBay stopped the stream of auction promotions and that enabled auctions to have their best y/y results in a long time - down only 1%.  For our customer base, the auction format has settled into the 10-15% range, used mostly for liquidation and 'turn it into cash in 7 days' type items.  It's too early to call, but it could be that we're finally seeing this mix 'settle in' and maybe going forward we'll end up at a 85/15 - 90/10 type FP/Auction mix.
• eBay fixed-price - up 33.1% y/y - This was a record showing for the FP format.  We're seeing name brand larger retailers do very well on eBay and eBay's daily deal program continues to drive significant revenue for top-tier sellers.
• eBay Motors  (parts and accessories) - Up 36%, a very strong performance and ten point swing off June.  While not as high as Feb's 57% or March's 37.4%, this was a great month for P+A, which somewhat dispels my theory from June that hot months are a bit slow for P+A.

So you have a perfect storm in July of auctions settling down and FP and P+A both doing well which added up to the super-size 28.2% overall number.

Here are the YTD trends on these eBay internals:

eBay has a bunch of back to school promos going and B2S tends to have a heavy apparel component, so it will be interesting to see if these trends continue into August and the rest of Q3.  If they do, we could be setting up for a very strong Q4 from eBay.

Supplemental data for Search

The supplemental paid-search details for July are available in this table:

Search was somewhat sluggish in July as Google continues do run a ton of tests around the move to Google Shopping. (check out this post on sister site CSEStrategies for details and examples).   As you look at the supplemental search data, you see that there was little to no movement around the key drivers of AOV and CR.  Consequently CPC didn't move as retailers aren't going to pay more unless those metrics move.

Conclusions

We continue to think the SSS data is telling us that consumers really prefer the marketplace model and are voting with their wallets.  You can't beat marketplaces like eBay and Amazon when it comes to selection, convenience, ease of use, value, etc.  We'll be back shortly with some Olympic insights.  As always, let us know your thoughts in comments.

SeekingAlpha disclosure - I am long Amazon and Google. eBay is an investor in ChannelAdvisor where I am CEO.

 

 

 

 

Deep dive into eBay's strong Q2 2012 Results

Last evening, July 18, 2012, eBay released their Q2 2012 results.  As mentioned in the preview, we had a feeling this would be a great quarter for the company, and boy were we right.  As of this writing the stock is up ~10% and flirting with new highs.  In this blog post, we'll dissect the quarterly results focusing exclusively on the marketplace side of things (no payments or gsi, etc.) and of course highlight what we think are the most material datapoints for sellers.

Second Quarter Results Tracker and Highlights

Here's a key metrics tracker that we've updated to show eBay's Q2 results vs. their own guidance and Wall St. expectations: (click to enlarge)

I think the highlight of the conference call was John Donahoe's statement:

"This is the strongest performance we've seen out of marketplaces since 2006."  

That's definitely true and exciting, but what's really impressive is that the marketplace is obviously a great deal larger now than what it was back in 2006, so they are accelerating a much larger 'mass'.

Here are some other tidbits of interest to sellers:

• As you can see in the tracker, US GMV grew at 14% and non-US grew at 16%, for an overall growth rate of 15% - right in line with e-commerce.
• Sold items grew at 19.7% - when SI grows faster than GMV that means the ASP went down - probably a reflection of category shift (see category details below for more info)
• Active users - I was a little disappointed to see this grow 8% after Wenig stated at EOL it is growing double digits - perhaps he meant for the month or for the US and not 'global for the Q' which is what is reported here.  eBay now has 104.8m active users (compared to Amazon's Q1 170m).
• Fixed price is now 65% of GMV and growing at 20% y/y
• Auctions is now 35% of GMV and growing at a paltry 4% y/y - eBay is getting a natural tailwind as this melts away and the FP growth rate takes over.
• 48% of transactions had free shipping -up 11% y/y
• Top Rated Sellers (eTRS) made up more than half of US GMV - eTRS are growing at 18% y/y

eBay BFF's Mobile

Perhaps most interesting was the continued bullishness on mobile - across both eBay and Paypal:

• For historical reference, eBay did $5b in mobile sales in 2011.
• Early in 2012, they were forecasting $8b
• On the call yesterday, they bumped this up to $10b for both eBay and Paypal - there's a lot of overlap in there so I tend to ignore the Paypal number - think of it as effectively doubling on eBay.
• On the call there were a lot of Wall St. questions asking if this is incremental or cannibalistic - I don't think it matters to be honest - at least eBay is connecting with consumers and riding this wave vs. losing it.  Under the old regime we would have all been really frustrated by lack of innovation here, so kudos to the new team for jumping out in front of this.
• This was interesting: they also said 600k of those new active users came from mobile. I guess those are android/apple folks that are grabbing the eBay family of apps and either re-engaging or first time users.

eBay's growth vs. e-commerce

We always like to compare eBay vs. e-commerce growth to see how the MP is doing against the baseline growth rate of the industry. In this chart we show that visually and include some of these 'interior' data points that eBay is now sharing:

You can see that eBay is essentially growing in-line with e-commerce in the US. What's more interesting and to my earlier point is that you have TRS and FP growing faster than e-commerce and gaining share vs. the other components (non-eTRS and auctions) - as that happens, the eBay growth rate should drift up toward those high teens and low twenties - something I don't think eBay is really putting into their guidance and that Wall St. is counting on happening.

Category details

One of the most popular datapoints we publish is category detail.  First, let's look at the categories by size:

What really stands out to me from this data is that Home and Garden is now at a > $10b growth rate.  I'll have to check the history of vehicles, but I'm definitely sure this is the first non-vehicle (and maybe the first category period) to get to this massive scale.  H+G is interesting to me because it keeps on chugging without much focus from eBay.

Here's a view of the categories by Q2 growth rate:

I've color coded these into three buckets: Leaders, Neutral and Laggards.

Leaders:

• Tickets and travel - eBay redid the ticket category to be more stubhub friendly and it seems to be really paying off! The category is growing at 28% y/y and 23% sequentially - epic.
• Jewelry - This category has been a bit of a sleeper and it's interesting to see it take off - I'll have to ask some of our larger jewelry folks what's going on here.
• H+G - The largest category is growing at 19%, that's a huge contributor to this Q's overall growth rate.
• Collectibles and health both grew at the 15% mark y/y, but a bit of a concern is they did decline sequentially - we'll keep an eye on that.

Neutral:

• CSA - I was hoping with all of their focus on Fashion, that we'd see this category grow faster than the average, but it's only growing at 12% and is down 4% since Q1.   Amazon is really increasing their efforts in this category, perhaps it's starting to show up here?
• P+A - This is interesting because our P+A numbers are substantially larger than this.  Perhaps we see a changing of the guards from small/c2c type selling to B2C and ChannelAdvisor is growing faster because of our B2C concentration.
• Toys, CE and computers were all not only neutral, but negative sequentially, so we'll put them on the watch-list to see what they do next quarter.
• Sports and Photo were slow, but at least up Q/Q.
• While BMV held on to positive y/y growth, Q/Q it was down a whopping 20% - this category has to be hurting from the double wammy of e-books and Amazon.

Laggards:

• The only positive news down in laggard-ville is that Vehicles were up Q/Q, showing perhaps a bit of a turnaround happening in that category?  That's a weird category because GMV 'doesn't matter', but it could be a second-order indicator of a turnaround.
• Musical instruments, antiques, video games and 'everything else'  were all down y/y as well as Q/Q indicating serious weakness either from competition or structural challenges in the category.  For example, video games are on life support with no new consoles or big Halo-like launches happening in a loooong time.
• Finally, coins and stamps seems to have stopped it's impressive run-up on Gold and silver prices -it's down 23% y/y and 13% Q/Q. Ouch.

What we're watching for in Q3

One interesting thing to watch for in Q3 is the annualization of last year's price change where they included S+H in FVF.  It's our analysis this added to some of the growth rates and if they hold pricing the same, it will be interesting to see if this causes any slowdowns or not.  Those changes went live on July 6, 2011.

Also, we'll be looking for any kind of read on the Holiday 2012 which hopefully will put a nice cherry on top of what is shaping up to be a great 'post turnaround' year for the eBay Marketplace.

What did you think of the Q? Let us know in comments.

SeekingAlpha Disclosure - I am long Google and Amazon. eBay is an investor in ChannelAdvisor where I am CEO.

Don't miss Scot's Holiday Checklist Webinar

Read the full details on our sister blog Amazon Strategies, and don't miss the Top 10 Strategies for your Holiday Success Webinar tomorrow, 7/19 at 11:00 am ET. 

eBay Q2 Results Preview

eBay will report their second quarter results after the bell this Wednesday (July 18th).  In this post we preview what we're looking for from a seller's perspective from the report.

Wenig pre-announces strong user growth and goal to double eBay GMV in three years

One interesting point this quarter: in his talk(s) at eBay On Location (EOL), eBay's new marketplace President, Devin Wenig told attendees that y/y active user growth was really accelerating and was in the double digits (so 10%+).  I don't think anyone on Wall St. picked up on this and since it was said in Q2, could point to a stronger quarter than many are forecasting.  He also states they have an internal goal to double in three years which would be a 26% annual growth rate (with compounding), which is essentially double what they are growing as of Q1. We'll see if they share that with Wall St. or if it was more of a statement to get seller's jazzed up.

Will eBay announce a new CBT solution?

Finally, Wenig has been out talking publicly about a new international program for sellers coming soon (Cross Border Trade or CBT in eBay-speak) - perhaps that will be announced on the call.  The way he describes it:

• The seller opts into the program
• Their items are now shown across all eBay international channels
• Let's say a buyer in the UK purchases from a buyer in the US.
• eBay shows the UK buyer their fully loaded shipping costs including tarifs/customs.
• eBay sends a ship notification to the US buyer to send to a US-based reshipping facility
• The reshipping facility receives the item and then 'reships' it to its UK destination.
• eBay updates the UK buyer on the status of the item as it works through the system.

This type of service is provided by third parties such as FiftyOne and Bongo today for non-eBay transactions and has some interesting pros/cons to think through:

Pros:

• Requires zero extra work for the seller
• The buyer is fully informed of their costs
• Smart reshipping can combine packages to reduce overall shipping costs
• Increased selection globally
• If eBay sees this as a profit center, it could be a new source of revenue.  Historically eBay has used shipping as a revenue driver vs. Amazon's approach of funding shipping, so it will be interesting to see what they do here.

Cons:

• Double shipping adds costs to the equation
• Double shipping adds time to the equation - folks in the UK expect their items the next day pretty much, something taking 10-14 days may not go over well
• A lot of international buyers want sellers to send things as gifts so they can avoid taxes and tariffs, this new system will not allow for that.
• Complexities - how will this impact feedback and DSRs
• In most of these models, the reshipper takes ownership of the goods and thus is on the hook for returns and chargebacks and what-not.  This adds a whole bunch of complexity that will be tough for eBay to navigate and will probably add seller complexity.

Unknowns

Finally, Wenig hasn't stated what the economic model will be.  If eBay sees this as a profit center, it could be a new source of revenue (pro for Wall St).  Historically eBay has used shipping as a revenue driver vs. Amazon's approach of funding shipping, so it will be interesting to see what they do here.  If they do see it as a profit center, someone has to fund that and historically it is the eBay seller that does, so that could be a negative and slow adoption of the seller side of the equation (supply).

For example, let's say you are shipping a pair of shoes to the UK and the costs is $15.  If eBay marks that up 30%, or ~$5, then they either have to get the seller to fund the $5, or the buyer.  International buyers do tend to be ok with higher shipping because in most cases the reason they are shopping outside of their borders is to get to some unique selection, so they tend to be less value concious, but there is a limit and eBay has to realize they are competing with off-eBay alternatives that aren't as expensive.

eBay Q2 Results Tracker

In addition to the user growth and CBT solution, Wall St. is watching for any macro-economic headwinds.  For example, the EU is still under pressure and Comscore came out with e-commerce numbers in the US this week that were less than robust.

Here's our key metrics tracker with eBay's guidance and Wall St. expectations: (click to enlarge)

Stay tuned...

As usual, we'll be tracking the results and will have a summary shortly after they are out.  Also, Amazon reports on  

SeekingAlpha Disclosure -I am long Amazon and Google. eBay is an investor in ChannelAdvisor where I am CEO.

Expand Your Sales on eBay with these Features

Are you taking advantage of all of the things you can do that can help you increase your sales, minimize non-payment, and find new buyers for your products?  eBay provides a number of features that can help you expand your sales, and ChannelAdvisor makes them very easy to use.

First, are you reaching out around the globe?  Cross-border trade is one of the fastest growing areas and allows you to reach out to customers that you've never gotten access to before.  With some recent changes, items that have international shipping options on them are automatically shown in other English-language countries, so you can easily sell to the US, Canada, UK, Ireland, and Australia with the same listing.  All you have to do is support shipping to those countries on your posting template and eBay will automatically expose you to more buyers.  Just make sure you're ready for any increased work required by your shipper for international transactions.

Second, are you giving people additional opportunities to purchase?  Auction listings have a feature called Second Chance Offer and Fixed Price listings have the Best Offer feature.Both of these allow you to accept offers lower than the purchasing price, and can be very useful when you have additional quantity of the item and enough profit margin that moving additional units is more valuable than a slightly higher profit margin.  Once you configure your settings regarding how these offers should be handled, ChannelAdvisor will automatically process any requests from buyers to determine if they should be accepted or not.  Sellers using Second Chance Offer see about 30% of the offers accepted, and Best Offer provides not only additional sales but a way to reach out to those buyers whose offers aren't accepted to encourage them to make other purchases with you.  All of those are free additional sales you can make on your items without any additional work.

Third, have you looked into Immediate Payment?  This allows you to guarantee that the buyer will pay for the item when they purchase it at eBay, eliminating the hassle of Unpaid Items and preventing your quantity from being tied up with a buyer that never completes the purchase.  With the new Shopping Cart at eBay, buyers can now consolidate immediate payment items together so they can take advantage of combined shipping rules and discounts that you might have for buyers that purchase multiple options.  It's the best of both worlds.

These three steps can help you increase your sales, reduce the amount of time involved managing your business, and reduce the problems of non-payment.  There are plenty more where these came from, and we'll look at those in a future post.

Blog post by Marshall Smith, ChannelAdvisor Technical Lead, eBay

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Find out more about how ChannelAdvisor helps you sell more on eBay--download our eBay 360 eBook

Don't miss the webinar with Buy.com on Thursday!

Tomorrow we'll be hosting a webinar along with Buy.com's Marketplace Senior Director George Chang.  Gina DeFrank, ChannelAdvisor marketplace analyst will join George in discussing what's new with Buy.com and what sets them apart from other marketplaces.  

The Buy.com Webinar will take place Thursday, July 12th at 2:00 pm ET.  

Buy.com, which recently celebrated its 15th anniversary, has been making continuous improvements to strengthen its marketplace.  Since its purchase by Rakutan in 2010, Buy.com has become an integral part of a $15 billion annual internet powerhouse.

Buy.com  now has 18 million total customers, more than 20 million items listed, 20 categories and lots of opportunity for online retailers.  

Join ChannelAdvisor and Buy.com at tomorrow's webinar to learn more. 

 

June 2012 ChannelAdvisor Same Store Sales (SSS) for eBay, Amazon, Search and CSE

Note: This is a monthly feature published by ChannelAdvisor highlighting the Same Store Sales (SSS) across our wide range of ~3000 retailers and ~$3b in GMV.  Details on the SSS including methodology and schedule can be found in January's post.

Today we are releasing June 2012 data for Marketplaces (eBay/Amazon), Search and Comparison Shopping Engines (CSE) along with supplemental data.

June 2012 SSS Results 

• Amazon - Amazon increased slightly coming in at 49.9% y/y growth for June.
• eBay -  eBay came in at 20.5%, showing continued strength.  Details in the eBay section below.
• CSE - Comparison Shopping Engines slowed slightly coming in at down 2.7%.
• Search - Search slowed a bit and came in in at 6%.  Search details are below.

SSS Chart 

The following chart details the SSS data for June 2011 through June 2012: (click to enlarge)

eBay Details

eBay's June y/y SSS 20.5% growth was a solid showing.  Here are the interior datapoints for the month:

• eBay auctions - down 10.7% y/y - eBay has been running a flood of auction promotions that actually have the opposite effect many would think - the flood of low quality free auctions swamps the system, the good inventory is lost and our Auction GMV bumps down.  That was a big auction theme in June.
• eBay fixed-price - up 27.5% y/y - The FP metric is holding up great which is what we believe retailers should be focused here, unless you sell auto parts...
• eBay Motors  (parts and accessories) - Up 26.8%, a solid performance, but the slowest for the year.  I believe the hot weather is putting a damper on people's desires to work on their vehicles so we are probably seeing some enhanced seasonality.

Here are the YTD trends on these eBay internals:

It's interesting that eBay and Amazon both are holding steady, but we are seeing some weakness in Search and CSE.  CSE is understandable given the headwinds there.  Search is interesting and suggests maybe a broader trend of consumers moving more behavior to marketplaces - something we have been predicting for a while, and it will be interesting to see what the data tells us going forward.

Supplemental data for Search

The supplemental paid-search details for June are available in this table:

Clicks were up pretty significantly which indicates metrics like search coverage and ads/query were up and potentially queries (look to comscore for that type of data).  Unfortunately cost was up driven by three metrics:

• CPC was actually neutral
• CR was down a fair amount (9%) to 2.73% indicating that consumers were not converting as well as last year or sequentially (this is the lowest CR this year).  There are a number of reasons consumers don't convert - ad quality, pricing, economic pressures, no call to action, etc.  This is only one datapoint, but we'll be watching this closely.
• AOV was also down slightly - usually this represents pressure on the consumer's wallet and/or seasonality.  We'll go with seasonality at this point.

Conclusions

Based on the June data, we saw a tale of two cities.  In the marketplace city (whose skyline is dominated by the eBay and Amazon high rises), things are chugging along nicely.  In the CPC-based city of search and CSE, there is a bit of pressure - perhaps it's macro-economic, or perhaps its due to the flocking of people heading to marketplace city?  Only time will tell, so stay tuned.  Of course, we'd love to hear your opinions, theories, thoughts and criticisms in comments.

SeekingAlpha disclosure - I am long Amazon and Google. eBay is an investor in ChannelAdvisor where I am CEO.