eBay's Donahoe Has Crow for Thanksgiving

by: Dinah Balk November 28, 2008 | about stocks: EBAY    

Dinah Balk

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Most eBay sellers enjoyed a nice turkey dinner yesterday with all the trimmings but I suspect John Donahoe, eBay (EBAY) CEO found a generous portion of crow sitting in the middle of his plate because Nielson's numbers are in and confirm buyers, sellers, and shareholders worst fears – John's disruptive innovations backfired!

The numbers tell the story. 1) Nielson reported a steady decline in eBay traffic all year but in October traffic dropped by slightly more than one third over last year; 2) Medved charts indicate sell thru rates at the lowest point I've seen in years; and 3) eBay stock is making new 52 week lows – none of which occurred prior to John's disruptive innovations that began earlier this year.

Dinah's top 10 list of what's wrong at eBay.

  1. Management. Sellers set up an online petition to remove John as CEO which is unprecedented but not unexpected given the results of John's disruptive innovations.
  2. Home page. It appears to have been designed by a tech student due to content and unnecessary bells & whistles that cause the page to load as slow as molasses.
  3. Search. Best Match is designed to think for buyers but it seems to have an IQ of less than 50 judging by its performance. Most sellers have reported a 50%+ drop in sales.
  4. Paypal. This has created a buyer vs. seller situation. Sellers refuse to ship before they are paid (can you blame them?) and Paypal is now judge & jury of all SNAD claims.
  5. Advertising. eBay has increased advertising that sends buyers off the site. No wonder traffic & page views are down – even Amazon is advertising on eBay.
  6. Shipping. eBay capped shipping rates below actual costs for media sellers.
  7. Glitches. These occur on nearly a daily basis which is inexcusable.
  8. Feedback. Feedback should be mutual & not used as an excuse to hold funds.
  9. Diamond Powersellers. These sellers' listings (reported to be free) have increased eBay's total number of listings by millions but the sell thru rate is low, the profit margin appears slim, and most items are cheaper at Wal-Mart & other online retailers.
  10. DSRs. The last time I earned a star was when I was in the first grade which puts eBay's detailed seller ratings in real perspective.

What the hell is John thinking? I bet shareholders are asking themselves same question as they sit down and enjoy their Thanksgiving feast. I bet SPIN is not the right answer.

Dinah's disclosure: I've been an eBay seller for many years.

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This article has 123 comments:

  •  
    Nov 28 05:45 AM
    You forgot:

    11. eBay Acquisitions. eBay continues expending resources (read 'cash and credit') by overpaying for questionable operations.

    The $2.6 billion purchase and subsequent $900 million Skype charge (write off) comes to mind.

    BillMeLater might be another.
    www.washingtonpost.com...
    Was Ebay's BillMeLater Acquisition A Huge Blunder?
    Reply | Link to Comment
  •  
    Nov 28 07:29 AM
    You unsuccessful Ebay sellers are unbelievable. Ebay’s upcoming results will probably be record-breaking for several reasons. Not only are listings & sales at all time highs, but more & more merchants are using Paypal.
    Reply | Link to Comment
  •  
    Nov 28 08:10 AM
    Lenny, I repeat, take these complaints seriously. If you own the stock, sell it, and if you don't own it, short it. John D. has seriously screwed up the site for sellers, and sellers are the only ones paying the bills.

    Sellers are the real customers here, not buyers. Sellers are the only ones paying eBay fees. Buyers don't pay for anything except the merchandise.

    Reply | Link to Comment
  •  
    Nov 28 08:13 AM
    Dinah says Good Morning!

    You're absolutely right EventHorizon1984. I should have added acquisitions that don't make sense. I'll add it to my end of year list. If you can think of anything else I left out please let me know. Thanks!

    Reply | Link to Comment
  •  
    Nov 28 08:55 AM
    John Donahoe deserves accolades for the changes. Seller service has improved dramatically under his leadership. The ebay experience for the buyers has been hugely changed for the better. Bad sellers are the ones that hate the changes because they are being outed and are losing sales. Donahoe is taking out the trash.
    Reply | Link to Comment
  •  
    Nov 28 09:14 AM
    Ebay DROVE me out of business. High fees. Cryptic emails or no emails to questions asked. Crazy rules that no one could follow and make a profit. Hassles and more hassles. I bought and sold on Ebay and have left 4-5 months ago. Do not miss it at all. Probably spent what I made as a seller on Ebay. All in all, they lose. I can live without "deals" that I was buying. Feel sorry for the people who needed the extra income and income as a whole. Donohoe should rot.

    Oh and so-called successful Ebay sellers, glad you're so happy that they put so many out of business and in great financial straights when times are tough already. I boycotted with the sellers even though at the time I had no problems with Ebay. I just thought that what they did to these people was horrendous.
    Reply | Link to Comment
  •  
    Nov 28 09:23 AM
    'best match' is indeed an abomination. get rid of it.
    > jack
    Reply | Link to Comment
  •  
    Nov 28 09:29 AM
    SSSSLLLLLOOOOWWWW is correct. Did you ever try to do eBay on a dial-up? I have fast internet and it takes forever to search for stuff. When I go to the country, where many are still forced to use dial-up, it is impossible. I can find links to stuff on eBay with a google search pretty fast, but I can go to sleep trying to get to it on eBay. I wasn't always that way. Sadly, they are killing it with the "Slowskis."
    Reply | Link to Comment
  •  
    Nov 28 09:33 AM
    If someone "invented" the original eBay (are you paying attention, Yahoo??), and started in today, all the action would move in a heartbeat.
    Reply | Link to Comment
  •  
    Nov 28 09:53 AM
    I joined ebay in 1998, I left ebay in 2008. The reasons are simple. Dinah's list is partial for my decision, but at the root of all things that have gone wrong on ebay.

    You can say that ebay has cleaned out bad sellers with their changes but we know that to be untrue. All one needs to do is look around ebay and see that some of the worst sellers are there, still there and new ones showing up at the same rate they did before the changes.

    Sadly, some of the best, longterm members are finding themselves restricted or worse, suspended for 30 days with the contradictory and canned notification that they need to improve their stars to get back to selling. Now there's a well thought out change!

    The stars are not factual nor are they transparent. It is the opinion of a buyer, whose mood and behavior when leaving them questionable at best. Buyers may not even have a clue what a 4 means to a seller but think that 4 really is good because that's what ebay tells them it means.

    It was all by design, to slowly but surely remove sellers ebay wishes to replace with diamond power sellers who sell things like toilet paper overpriced with outrageous shipping. But those diamond powersellers with all their special hidden deals with ebay can list hundreds of thousands of listings to give the appearance to the wall street analysts something to chatter about. Fortunately some of the analysts are looking past the surface numbers and seeing the revenue doesn't line up with the data ebay promotes to show "We're growing!".

    Ebay is in fact, dying on the vine in the core site. All one needs to do is pay close attention to the real numbers, the ones that matter and those are not listing numbers, but in fact are member numbers verified outside of ebayspeak. And the revenue numbers which are not tied to forced paypal use.

    Paypal is the ultimate life raft, without it ebay would already be gone off analysts radar screens. And forcing paypal use is an act of desperation to keep a positive balance sheet for the fourth and final quarterly report, you know, the one that ebay is bent on showing all they are still viable.

    Many many sellers left voluntarily with the upheaval of draconian policies and micro management of sellers' business on ebay.

    Many more sellers are being suspended based solely on the star ratings that are still above 4, which remember, ebay tells buyers is GOOD. That certainly makes a seller faithful to ebay doesn' t it? No, the ebay message boards are full of frustrated and furious sellers who have been suspended for this nonsense and in the critical largest selling quarter of the year. They won't be back either, they're leaving too.

    Now the folks who defend ebay will say that those leaving will be replaced with more new sellers. Really? How long will they believe the video professor telling them they can make money on ebay when they spend a couple months trying to sell on ebay only to find their fees outweigh their sales income, that the whole system is set up for failure, unless, of course you get special deals with ebay because you can dump millions of listings on the site and demand special treatment.

    Level playing field? And they still have the nerve to say it's such.

    Smart sellers use ebay to feed their own websites but diminish their presence on ebay until they're established on their websites.

    Watch the real numbers in the fourth quarter, forget listing counts, they're worthless when you look at what those listings are.

    Watch the membership numbers, watch the revenue when paypal is broken out, watch the billions of shares of stock being bought back which has been ongoing and getting more intense recently, a program of buy back that started in 2006. Not normal for a healthy company to continue to buy back stock year over year, month after month.
    Reply | Link to Comment
  •  
    Nov 28 10:11 AM
    The only sellers complaining are the ones that had gotten used to keeping buyers quiet by the implied and implicit threat of negative feedback. Now that buyers are free to post the truth about bad sellers, sellers have been dethroned and have to earn good feedback the old fashioned way, with good service.
    Reply | Link to Comment
  •  
    Nov 28 10:23 AM
    "November 24, 2008
    eBay Announces Two-Day, Auction Style Listing Fee Sale.
    eBay will reduce listing fees 50% for listings launched on November 24th through midnight November 2hth."

    Talk about a flip-flop.
    eBay used both barrels to blast auctions off the site for the 'Buy it Now' style.

    Desperate people do desperate things. Such as buying back it's own stock.
    Think what their share price would be if they didn't keep them propped up.
    Besides, who else wants them.... at any price?

    Reply | Link to Comment
  •  
    Nov 28 10:31 AM
    steve, in my ten years of selling I never used ebays allowed feedback retraction nonsense. Remember, ebay was the one that allowed sellers to force that negative removal through intimidation. Then they turned around and blamed sellers for using what tools they gave them, unintended consequences of poor policy is a given most time with their policies as we have seen time and again over the years.

    In fact, I always left feedback at time of payment, as far as I was concerned, the buyer had met their end of the deal when cleared payment was in my possession.

    So that statement of "the only sellers complaining" of yours is false on it's face. You made a huge assumption and as assumptions go, they're usually wrong.

    My feedback stood at 100% when I left ebay, my feedback stars are 5.0, 5.0, 4.9 and 4.8, and that was as of early 2008 when I left ebay.

    I gave good service, ebay didn't appreciate it and wanted me to be punished for the sins of others. I don't call that a good business model. I call that a very hostile environment and left before I became victim of their insanity.
    Reply | Link to Comment
  •  
    Nov 28 10:34 AM
    steve577, not necessarily. One of the rudest people I have dealt with is still selling. I was threatened by the boyfriend of the registered user. Their percentages stay high enough that the behavior still goes on. I look them up ocasionally and they are still in business. This particular store has ignorant people invoved who are unable to communicate in a rationale manner if any problems crop up. They routinely threaten people with legal action as a form of intimidation. I don't believe that the boyfriend was expecting to discover the level of fight that he received from me.

    I'm honest.The package was sent but the ill bred sellers left themselves wide open for me to successfully file a claim with paypal by not properly shippiing their package. I do hope that they appreciated that I didn't follow through.

    I know whereof I speak. I was one of their customers. Ebay was unwilliing to offer me any form of assistance because it would have meant riskiing their no risk venue status.
    Reply | Link to Comment
  •  
    Nov 28 10:42 AM
    It is also possible that for the long term, it suits Ebay to have the stock tank. If they are able to buy back all the stock to re-become a private company, they gain an additional layer of protection since there would be no need to have any announcements made in the public arena.

    Going public spreads the financial risk away from the company to enable growth. Thay have never paid a dividend and are cash rich because they do not bear the costs involved in maimtaining an inventory.

    They have everything to gain at this juncture by going back to private.
    Reply | Link to Comment
  •  
    Nov 28 10:43 AM
    steve577, Welcome to this thread!

    As ex-poster 'proBuyer' can tell you, we need folks like you that have no real clue about being an everyday seller on your wonderful eBay site.
    Your type keeps the fire going in the belly of posters that know the real story.

    BTW, do you know proBuyer? Your verbiage sounds awfully familiar.
    Anyhow, welcome aboard!


    Reply | Link to Comment
  •  
    Nov 28 10:49 AM
    Having sold for 9 years, the final straw was the mandate of using anything other than our nations money or the us postal service's money order. I also was buying and spending more than i was earning on the site.Now, i have flipped the opt out version of ebay and have still found many things i want to buy because of the dramatic fall in prices. But , i don't buy, and i won't bid, for the pay pal edict has rubbed me the wrong way. The nation's economy is falling apart, and the next big london bridge will be the credit card market. Even as i approach mid sixties, i can hear my father telling me that if you don't have the cash , don't buy it. Ebay is running to the left of this for their own selfish greed, and now are a promoting factor in the next big national problem. Donahue and his flunkie Lieberman, still think this is all just noise?
    Reply | Link to Comment
  •  
    Nov 28 11:31 AM
    I wanted to pass along the latest Paypal scam. This demonstrates Paypal's complete lack of regard for the buyer or seller. If your Paypal account is limited/frozen, you can no longer refund to buyers on items you did not ship. Even if you recommend the buyer file a dispute, the refund link is still disabled. The buyer will have to wait til the dispute process completes in 20-30 days and then who knows what happens with their money. Below is from a Paypal email dated 11/24. They have the funds and will not allow the seller to refund. The seller refuses to ship as Paypal has the money. The big loser is the buyer.

    Thanks for contacting PayPal. I appreciate the opportunity to assist you
    with your questions.

    You have a limitation on your account at the present time. If you go to
    the Resolution Center in your PayPal account it will walk you through
    the steps to lift the limitation. Until you do so, you will not be able
    to refund your Buyers.

    I appreciate the opportunity to assist you. We are committed to making
    your experiences at PayPal pleasant and rewarding.

    P.S. The limitation was imposed after a simple increase in sales and is pending a laundry list of documents and might or might not be lifted after receipt. Seller refuses to even offer SSN as Paypal is not a bank. Won't use Ebay/Paypal again. Amount buyers out is $775.

    Thugs and thieves is all they are.

    Reply | Link to Comment
  •  
    Nov 28 11:33 AM
    I can think of one more thing you might add to your year-end list Dinah.

    12. Hiding ALL Bidder IDs makes eBay "auctions" a virtual Shillers Paradise.

    And, if things keep going the way they are with eBay, I can see an announcement early next year that tells Sellers it will no longer be “necessary” to leave ANY Feedback for Buyers. It would seem that after May 2009, all Buyers will have 100% Positive Feedback anyway.

    As for all of Donahoe’s changes “cleaning up” eBay; many of the changes have actually made it easier for bad Sellers to stay on eBay. For example, when eBay was in it’s prime, buyers were able to determine a Seller’s reputation by using his Feedback from the time that Seller had started selling, going back years in most cases.

    Now, eBay has cut that time down to 12 months, and in many cases 30 days. How does this help a Buyer determine a Seller’s reputation?

    It is quite possible that eBay is concerned about all of the Government regulations that are right around the corner. The cost of keeping track of each Seller's tax information could overwhelm eBay/PayPal's shaky infrastructure, and they now seem determined to rid themselves of all but a handful of Diamond Power Sellers before the tax laws take effect.

    eBay is fully aware they have no inventory, and John Donahoe is tired of being the ringmaster at the flea market. They want to rid themselves of ALL SELLING, and become an advertising portal. Oh yea, and in the future they want to be referred to as The First Bank of eBay.

    No credit... Bad credit... No problem...
    Reply | Link to Comment
  •  
    Nov 28 11:38 AM
    trusted1 - your point about the paperless payment policy is spot on. Actually, ebay took no risk in buyers using money orders or personal checks, the sellers did.

    They did that for one reason only, to GROW PAYPAL as Donahoe likes to refer to it in his priceless presentations to stock holders in his powerpoint presentation.

    And we know, those of us who have watched quarterly report after quarterly report, that paypal is the only revenue generator they have left. So growing paypal is a necessity to cover the losses elsewhere.

    Oh, wait. There is one other revenue generator they are happy with, stealing bandwidth from sellers via all the click through advertising permeating every inch on ebay's site. Check those numbers in their financials and you will see they don't mind redirecting traffic OFF ebay (away from sellers) because they are making what they consider easy money.
    Reply | Link to Comment
  •  
    Nov 28 11:51 AM

    @ Lucky Lenny
    @Steve577


    Thanks for trying to make us look good amidst all the negative publicity.

    Your checks are waiting you at the front desk.

    ~Love John
    Reply | Link to Comment
  •  
    Nov 28 12:02 PM
    If sellers spent more time selling and less time compiling laundry lists of blame shift complaints for everything slightly difficult in their lives, they'd make more money.
    Reply | Link to Comment
  •  
    Nov 28 12:19 PM
    ebayinwonderland
    you are exactly right
    Reply | Link to Comment
  •  
    Nov 28 12:27 PM
    Dinah - spoken like a veteran Ebay seller. We knew this would happen with the first announcement by Donahoe in Jan. of this year! They paid him all this money to destroy a phenomenon that rode high and wide and handsome for 10 full years! That's greed over and above anything reasonable. As I've said before...John Donahoe it will soon be the time to get down on your knees and grovel and beg and plead and maybe....just maybe those "noisy" sellers who built Ebay may return!

    Hey Steve....Lucky Lenny - come on now - level with us....what IS Ebay paying you for this...or are you simply Ebay employees? I've seen your comments on several other articles - they always make me laugh ;-)
    Reply | Link to Comment
  •  
    Nov 28 12:32 PM
    "complaints for everything slightly difficult in their lives"

    In this day and age if a site makes ANYTHING about its site "Slightly Difficult" then the PAYING CUSTOMERS are off to build a new one.

    Wish granted. :-)



    Reply | Link to Comment
  •  
    Nov 28 12:52 PM
    I for one am happy that eBay is actively buying back their stock to keep it from sinking to single digits. However, as a shareholder I would rather they reward me with a decent dividend while I wait for the stock to go up.

    I too agree with most on the board that Donahoe has to go! eBay under his leadership has taken a wrong turn. eBay stock has tumbled to a new low. eBay stock without paying a dividend to shareholders may never recover! It might even go lower.
    Reply | Link to Comment
  •  
    Nov 28 01:01 PM
    Come join us in the exodus! Powerseller here with over 14,000 feedbacks at 99.9%. We are fee'd out. Best match sucks. Stars are as Dinah said.... 1st grade level. The ship is sinking......read yesterday that they cut a deal with more huge sellers to come in an list for free. Can't wait to see the annual announcements come January. Go to etsy.com for handmade stuff, bonanzle.com and onlineauction.com for all the goodies you have always got at eBay with your check or money order and more. You can even find the stuff eBay has banned like ebooks, mystery auctions and such.
    Reply | Link to Comment
  •  
    Nov 28 01:37 PM
    etsy also has vintage items and artisan supplies.
    Reply | Link to Comment
  •  
    Nov 28 02:56 PM
    I don't know what this idiot is talking about (Dinah Balk), but I just went on an eBay buying spree. I used the Microsoft Cashback search and got 25% off on 4 purchases. I have no problem waiting 60 days. Bought a zip drive, Motherboard, memory, and CPU. Very happy with the deal I got on all purchases, I beat Amazon and Newegg considerably. eBay is the best site on-line for deals. I'm fine with the Seller exodus, great rid of the poor service Sellers and bring in people who actually want to complete for you dollar. love it!
    Reply | Link to Comment
  •  
    Nov 28 03:02 PM
    Ebay has forgotten what made them great in the first place . The one of a kind unique items . Where else could you find a hubcap for a 1936 dodge that you are restoring or a doll part from the 1800's . DonaWho is catering to sellers that post 13,000 Iphone covers or other cheap electronic parts . The unique sellers have been pushed out in favor of cheap mass produced items . I sell vintage concert shirts on Ebay (spacedustcowboys) and have to compete with those powersellers who are selling Knock-off remakes by the 1,000's . Ebay has no problem with them and encourages them to list more and more . It's really sad what Ebay has become :-(
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  •  
    Nov 28 03:16 PM

    WOW!!! @ ebay +++!!!

    Every time you post here, you're always just returning from a "wild spending spree" on eBay! Are you sure your palace is big enough to house all these goodies?

    You'd think with all that kind of cash you're constantly spending, you'd be rich enough to let somebody else do the shopping for you.

    You are so full of carp it's coming out your arse ( | )

    You want real deals on these types of products?

    Check out: TigerDirect.com
    Check out: 6ave.com

    Authorized dealers and reputable.

    Forget BUY, and forget eBay!!
    (Don't cry too much ebay +++ when you see that you paid way too much on eBay while on your "spending spree") waaaaaa, boohoo......lol

    Go to Bonanzle.com start your own webstore booth and leave the stress and lies far behind.
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