posted on December 17, 2002 11:42:33 AM new
eBay Promotions are coming! Soon!
As the number of listings continue to precipitously drop as historically happens during this time of the year, eBay management is busily debating what type of promotion and when. At this time Click Here: eBay Auction Count it indicates 7,615 Million, less than 0.75 million from that critical point.
There is no question if there is going to be a FLD, Penny Sale, Under a Buck Free Listing with No Reserve, eBay Store Free Listing, or another promotion; the only question is when?
As the listings drop below the critical number of 7 Million or God forbade 6.5 million, the able management of eBay will immediately implement a free listing promotion. eBay management does not want the shareholders to see that volume dropping below the yearly running average (somewhere below 7 million listings). The stock price could fall, earnings for this quarter would suffer. As good as eBay management has been, they can't let that happen!
This is not a Christmas Gift to sellers, but a defensive measure, a way to put the fire out. These promotions are bad for sellers, because while they save the listing fees, they merchandise usually sells with very few bids and consequently fetches a low price.
Seller be ready with your listings - - eBay Promotion are coming! eBay Promotions are coming!
posted on December 17, 2002 11:45:58 AM new
If it is a true FLD I will be thrilled. I have been making ads for a month getting ready in case. If not, I have the ads made to release next month.
As for me, FLD's are not a bad thing. I do not throw out all my leftovers. I have been making new ads and the collectibles I sell have the same sell through rate on FLD's as they do any other time. It can easily save me a couple of hundred dollars in listing fees---if Ebay will cooperate.
I don't do fixed price listings (because my auction server is not set up to change between auction format and FLD easily) and never list anything under $5.00 so I haven't taken advantage of any of the promotions to date.
Just keeping my fingers crossed that the one coming the end of the week will be a real one!
Edited because I can't spell
(Not lindajean on Ebay)
[ edited by lindajean on Dec 17, 2002 11:46 AM ]
posted on December 17, 2002 12:33:14 PM new
I'm not so sure.
If they do anything and my guess is they won't, it won't be a real free listing day.
They have developed too many major retail accounts over the year that will list regardless and to go FLD is just too much gimme - I expect a free or reduced price gallery, fixed price or store promotion if anything at all. A free 10 day is also possible but they would have to do it this week to get the money on the books in 2002.
I personally don't care to see a real FLD anyway, an awful lot of people just use it to dump all their leftovers for one more try- jams the servers and makes shopping difficult. My sales RATE was OK during FLDs in the past, but prices suffered.
posted on December 17, 2002 12:56:29 PM new
Ebay is like other retailors like Walmart that are in a cylical business and the ebay management and stockholders know that. It's reasonable to sell a huge drop in business just before Christmas in the mail order business and in a way ebay ( or rather it's sellers ) are in the mail order business.
These free or limited promotions can be a negative for ebay if they become highly predictable. Sellers will sit on their listings rather than listing them while waiting until the promotion arrives or instance. It's almost like a baseball pitcher that has to throw a certain pitch in a ceratin situation. The batter is waiting for it and will not swing at the other pitches.
posted on December 17, 2002 01:09:10 PM new
So, on that thought, Ebay might be sneaky and wait till the week after Christmas for the promotion. That way, people will give up and go ahead and list what they are holding onto and they will get an increase through both weeks.
posted on December 17, 2002 02:46:33 PM new
Or ebay may try to wean the sellers off the promotions altogether. The penny gallery promotions were to increase long-term usage of the penny gallery not just to temporarily jack up the ebay listings. I'm willing to bet there is a set business plan at ebay that is all mapped out far in advance.
posted on December 17, 2002 06:01:51 PM new
What the news media, management, shareholders and Wall Street remember are the figures at the end of the quarter (intraday lows are not as important as interday closings). Whether these are financial figures, listings, closing prices or order. eBay management is very cunning and smart, they will schedule their promotion within the next 10 days, for it to be productive during this quarter.
Management don't want their shareholders to think at eBay as a seasonal business. While it is true that eBay has many retail accounts that list daily. However, the majority of the seller that list are the sellers like you and I. If the retail accounts were the majority of listing, eBay would have done away with the non-institutional sellers (you and I) of their worldwide flea market. The chances of eBay eliminating their non-institutional sellers and concentrate on the retail accounts is nil to none in the near foreseeable future. Almost all the B2B trading places have failed or are about to fail. Why would eBay want to put themselves in that situation - - ego? If they did, there would be a new Yahoo, new Amazon or other auction house would sprang to life, to take eBay's place.
eBay is in the same situation as the retailers and discounter, they don't want to markdown or discount their merchandise, but they have no choice. Either markdown, discount to survice or suffer lower sales than the past year, and that is not acceptable in Wall Street. Your sales and earnings (listings) must always be higher than the previous period a year ago, or Wall Street will punish your stock.
For eBay is the number of listings which is crucial, because their revenues are based entirely on the number of listings. One thing is for certain, eBay does not want to telegraph when the promotion will take place, because that is the only two thing under their control: timing and type of promotion.
What will determine the timing is the current number of listings. At the closing of this day 24:00 PST, the number of listing will be in the vicinity of 7.2 Million, or lower just 700 Thousand or so from that critical 6.5 Million. I would venture to guess that the Penny Sale or Free Listing Day for eBay Stores are not profitable to eBay, it is like treating a broken leg with aspirins. What is the FVF of $0.99 or $1.25 auction? A hefty $0.05 or $0.06? Many if not most of these items closed with only one of two bids. A FLD is more profitable to eBay, while the prices obtained are lower than during non-promotion times, because the supply outstriping the demand, it is better to calculate the FVF on $10.00, $25.00, or $100.00+ auctions than on $0.99 or $1.25 sales.
Therefore, seller get ready for your FLD within the next 10 days. Don't expect a long lead time notice! When it happens, it will happen quickly, and will be of short duration, sufficient to pull the number of listing away from that critical number 6.5 Million. The moving daily average.
Merry Christmas to all!
[ edited by USMarines on Dec 17, 2002 06:17 PM ]
posted on December 17, 2002 06:28:31 PM new
For the first time in the 4+ years I have been selling, I am ready and waiting. If it comes, great. If not, I have all my listings ready for January which has always been one of my best months.
posted on December 18, 2002 12:12:52 PM new
Either everyone is busy checking the auction count to see if the totals are getting low enough to get the FLD, or Ebay pulled the plug.
Now getting message "That page cannot be displayed".
posted on December 18, 2002 04:15:36 PM new
Yes, I was just getting ready to post that the Auction count site is back up. Haven't been able to get in all day.
posted on December 18, 2002 05:37:03 PM new
Hi everyone:
I too could not get the eBay Count, the site was overwhelmed by people trying to see the eBay count. It is back now. The count is about 7.05 Million dropping at the rate of 25.0 K per hour. On the four remaining hours of today, it should fall below the 7.0 Million easily. That is less that 500.0 K away from the critical 6.5 Million listing bottom that eBay would like to avoid or risk their stock to take a major drop.
The previous days show an average drop of 300.0 K listings per day. Can we be very far from that Critical 6.5 Million and a resulting eBay Promotion? My guess is that we are two to five days away from that promotion. Yesterday, my guess was 10 days, but things are happening faster than predicted. The drops are becoming steeper and consistent!
I wonder if anyone such as our old friend John Wohn, or another authority on eBay, had study the correlation of the number of listing to eBay stock price? The relationship seems obvious to me, since that is one of the two major source of revenue: Listing Fees (LF) and Final Value Fees (FVF). The LF Revenue is directly tight-in to the number of listing, however, the FVF is influence not only by the number of listings but the Sale-Thru-Rate, no sale no FVF. Further, the FVF is also influenced by the price obtained by the seller, the lower the price the smaller the FVF. That is why eBay must watch for an over saturation of listings in excess of willing buyers, such as the recent record peak of almost 10.5 million listings and not enough buyers. Creating a one or two bid auction and lowering the Sale-Thru-Rate, leaving many sellers holding the bag of LF and few or no sales.
You know that eBay is burning the midnight oil, trying to figure out their next move. I am confident that as an able management, they will be announcing a promotion very shortly. Millions if not Billions are at stake in eBay's stock prices.
Let us take a vote. Do you think that eBay Management is competent enough that will come up with a promotion? YES, or NO. Take a position, let us hear your opinions.
Incidentally, has anyone being in touch with our John Wohn from the old Yahoo days?
Merry Christmas to all!
[ edited by USMarines on Dec 18, 2002 05:40 PM ]
posted on December 18, 2002 06:36:18 PM new
Remember when the stock was over $250? Listings were around 1/4 of what they are today. I for one think that investors do not look at the daily listings, and therefore think that it has no correlation to the price of the stock. The stock still has a pretty high PE ratio, and could easily drop lock a rock. I wouldn't be surprised to see ebay trading in the $40-45 range next year. I see that as a more likely event than it trading in triple digits. What about aol auctions happening in the near future? Just think about the impact that could have on ebay. I would hope for a free listing day, but no longer rely on it as we have been concentrating more on our website and our affiliate programs. Much easier than jumping thru ebay's hoops.
posted on December 18, 2002 06:54:35 PM new
Doesnt it make sense that Dec 17 & 18th - 7 days before Christmas Eve and Christmas would be the absolute lowest listing days of the year? I don't think it says anything about trends at all...just that sellers arent dummies!
posted on December 18, 2002 08:32:51 PM new
The relatively low number of listings says to me that it is too close to Christmas to warrant any more listing or buying.
posted on December 20, 2002 07:33:39 AM new
Happy Holidays everyone:
This morning at 10:00 EDST the number of listings are 6.61 Million, based on the historic trend of this week, listings should drop to the range of 6.2 Million, in the absence of some type of promotion. Since the Closing on Saturday night, 12/14/02 (8.8 Million) thru Thursday night's closing, 12/19/02 (6.55 Million), the number of listings has drop 2.25 Million or on the average 450,000 per day. Since the peak on 12/06/02 of 10.41 Million, the drop is about 3.8 Million Listings, and still dropping!
I do believe that another e Bay promotion is inevitable, in the next few days, so keep checking on the eBay Announcement Board. If my memory serves me right, there were promotions on 1999, 2000 & 2001. eBay's management is very good, they will see the need to reverse the downward trend on the number of listings with a promotion, as they did on past years.
Not everyone, shares that opinion. Sorry, I could not provide a hyper link to that Message Board, maybe someone else can, so here is the information that appeared on the AOL's eBay Message Board:
Subject: Re: Is there a correlation between the number of Listings and eBay's Stock Price? Date: 12/19/2002 1:30 PM Central Standard Time From: Thelip14 Message-id: <[email protected]>
Of course E-bay's stock price has some type of correlation to the amount of listings. It is typical for E-bay's auction count #'s to drop 40 per cent or more from their December Highs. Hence 1999 High of 3,800,000 in Dec dropped to 2,200,000. 2000 6,300,00 dropped to 3,600.000 2001 8,000,000 dropped to 4,600,000 2002 High was 10,400,000. expected to drop to 6,200,000 which is only natural. It picks right back up in January. As a side note those auction counts only include the United States. They are growing much faster overseas. Why does E-bay need to come up with a promotion? My answer is No.They are doing quite well as it is. Also with the addition of paypal, their earnings will be higher than ever. By the way who is John Wohn.
Let us hear your opinions, has the recent purchase of PayPal made a promotion unnecessary in the eyes of eBay's Management? YES, or NO.
I still believe that there is going to be a promotion this year to reverse the decline trend on the number of listing, it has happened on all prior years.
Merry Christmas to all! Thanks for the help you all, have provided to me and others through this Boards and Thank you AW for this Boards
posted on December 20, 2002 08:11:11 AM new
I don't understand eBay's reluctance to have FLD, I for one list so many more things then that I wouldn't normally list. Good stuff, but low price, craft leaflets etc that people are eager to buy, but the prices are low, and not worth listing fees for me, and eBay gets all the fvf's for all the extra sales. I would think they would have FLD's more often, and collect on all those fees!!
posted on December 20, 2002 09:14:31 AM new
The FLDs in the past were much smaller in the number of listings and value. An FLD now would be much more of a give-away. The new raft of big name retailors on ebay may be a strong consideration for ebay as well. Then there is all of the FLD abuse that abounded in the past, the dummy auctions set up for use a few days after the FLD as the sellers were tooo busy with the FLD to set up all of their free auctions. With many millions of running auctions it get easier and easier to hide the dummy auctions.
There will be a promotion rather than an FLD in my opinion. Promotions promote and giveaways give away free except for a small FVF or occasional extra dime of a 10 day duration option.
FLDs encourage listings at the cost of "lost" listing fees- so for eBay to justify it, they have to believe the "lost" listing fees will be exceeded by the additional FVF and Upgrade Fees.
FLDs bring 2 kinds of items to eBay, those that would never have been listed,(a) the dogs
already run 3 times without bids and (b)items that would have been listed anyway, but not necessarily right now.
The (a) items listed at less than $10 have to bring $5.71 for eBay to break even, and given their nature, a lot of them won't do it. A million baseball singles, postcards, coins, stamps, and other smalls could sell without eBay making a penny. The sellers of these items are no less sophisticated than sellers of higher priced items and may have millions of these auctions ready to go on listing software.
(a)items listed between 10 and 25 dollars
have to bring $10.50 before eBay breaks even. Given the number of items listed many things will sell with one bid- so eBay gets a net FVF on 5 or 10 dollars instead of 15 or 20, a loss of half of normal revenues on these items.
(b) items are even worse from a revenue standpoint- because they would have been listed anyway, albeit at a later date. The
seller with 50 Kitchenaid Mixers NOT paying
$2.20 LF on each may save $110 bucks, but eBay LOSES those dollars, dollars they would
have otherwise received since these mixers were going to be listed sooner or later anyway. In addition, the FVFs are likely to be lower since the glut of listings keeps prices low.
Compare that to a promotion, 5 cent gallery or half priced Upgrades, eBays REAL cost is nil and while some regular users will save money (costing eBay money) others that dont normally use these features will try them yielding additional revenues though probably not enough to offset the loss.
Where they make that up is with the additional LFs generated by those taking advantage of the promotion and listing more than usual.
FLD is not in eBay's best interest because eBay's ONLY interest is making as much money as possible. eBay is business, not a co-op for sellers and is most definitely run as one.
posted on December 21, 2002 08:38:53 AM new
sniff,... sniff,.... you say eBay is a BUSINESS !!! But Meg said it was a community, or was that it was just a venue ?
posted on December 21, 2002 03:16:36 PM new
Hi everyone:
I like bob9585 analysis, it makes sense, it is an excellent opportunity cost analysis. Let us not forget that a FLD does not cost eBay anything. To have a FLD eBay doesn't need to hire new people, buy, lease new computers or hard drives, or hire additional management. There is no opportunity costs there, since without a promotion, there is no chance of obtaining higher levels of listings at this time of the year.
Having run and supervised IT installations in the past, I believe it qualifies me to tell you that the additional volume can be handle with the existing equipment, work force and management.
An IT installation has very much fixed costs, whether is it working at 20% or 80% capacity. If the additional volume demand is going to be for an extended period, it may very well need additional resources, to preparer for higher peaks. IT departments are very well equipped to handle peaks and valleys at their normal range of operations.
By not having a promotion, when the number of listings have shrunk to a volume of less than 6.2 Million (12/21/02, 18:00 EDST), is not only an opportunity cost, is an actual loss, some may say it is bad management, I won't go that far, because I believe that eBay's management is very good and that is why I expect some type of promotion to reach a higher level of listings.
I agree that FLD, reduces the FVF because of the higher supply of sellers, auctions close at lower prices and with a lesser number of bids. To the seller the savings on LF, may somewhat soften the blow, but the seller is the looser, not eBay.
I am still counting the days before the promotion. Because of my faith on the ability of eBay's management, I don't think is a question whether is going to be a Promotion or not, but rather when.
You all have raised excellent points in favor or against a promotion, let us hear some more.
posted on December 21, 2002 05:23:13 PM new
Again I agree with Bob. The ebay loses may not be eaisly seen but they are there. Ebay is courting the mega sellers and they do not want to step on their toes with a totally free FLD. A regular promotion may happen.
posted on December 21, 2002 05:29:18 PM newAs outlined above, there IS a cost to eBay of a free listing day, lost LFs and reduced FVFs.
While the new incremental listings will not generate a revenue of LF, the regular daily listings of approximately (6.2 Million listings/7 days) 890,000 listed daily at the present level would not bring any revenue. However the FVF of about 4.0 Million new listings generated by a FLD, should offset any lost of Revenue, from the regular daily listings. Assuming that the average daily listing fees is $0.50, that would be a loss of revenue of approximately $445,000. However, the revenue on FVF of 4 Million listings, assuming only a Sale-thru-Rate of 50%, with the average closing price of only $10.00 for these items closing with bids (4 Million listings x 50%) 2.0 Million, would generate a revenue on FVF of $1,050,000.
The potential revenue of $1,050,000 is higher than the potential loss of the daily LF of $445,000, by a rate in excess two to one. You know, that eBay Management is not stupid, so which is the better alternative?
A promotion could also work as well, perhaps not bringing as high as a two to one ratio in additional revenues.
Therefore, for the above reasons and others, I believe that a promotion of some type is coming soon!
posted on December 21, 2002 07:46:25 PM new
USMarines.......Most of the additional 2 million items listed on FLD are usually unsaleable junk with a sell through rate of about 5%. Your math is correct but it's application is flawed.
posted on December 21, 2002 08:40:01 PM new
That is just not true. Myself and many others just list everything we have been working on for a week.
I do better on FLD's than usual. I don't waste my time with ads that are junk!
I make ads one whole week. I have 550 made now -- new not leftovers. Then, I list them during the coming months. When those are gone I start over. Sometimes I list 50 a week, sometimes 100 a week and sometimes more.
If they have a FLD I will list them all at once.
Yes, Ebay will eventually get the listing fees from me, but if I list all these now I will make new ads for the coming months and they will get those listing fees as well as the FVF's now!
