SquareTrade Seller Blog

eBay Watch: 2007 looks much better than 2006

2006 shook a lot of sellers belief in eBay.   Will 2007 just go from bad to worse? Is eBay worth investing in as a seller? 

Here’s why we believe that 2006 should be written off as a one-off bad year – and 2007 as a year where the eBay platform will be more productive for sellers, and eBay will start making the right moves again.

In 2006, eBay just plain took its eye off the ball.   It got busy the first half of the year with other priorities namely Skype and the Yahoo & Google advertising deals. In addition, the management team was in flux, especially on the core eBay platform and a lot of the experienced folks left or were moved to other areas.  And with Core being less of a priority AND a team in flux, eBay got sloppy.  It wasn’t deliberate.  It is what happens when you don’t execute well. The entire Stores listings fiasco symbolized eBay’s difficulties for 2006 and it happened because eBay was distracted.  I am not sure if it would have happened any other year.

The seller backlash was loud. Google was finally seen as a real option. And Wall Street got spooked.  I don’t know if eBay would have scrambled to the level it did, if Wall Street didn’t say “Unhappy sellers + Slowing Marketplace + Aggressive Google = Bad for eBay”.  But Wall Street did say that, eBay’s stock price did tank, and eBay woke up.

The last 2 months, eBay is now rapidly catching up.  They seem to have made a strategic decision that eBay can grow, and that growth can be re-energized.   They are making most of the right moves in Trust & Safety to cut down on fraud. Most importantly, they are reconstituting a management team and structure to achieve this.

They have acknowledged (implicitly) that they didn’t have enough people thinking “growth” and doing “management”.   So, they have brought in 2 senior folks to build up the team – Philip Justus and Michael Lipton (eBay strategies has a good write-up on them). They seem to be fiddling with their entire org structure to enable them to execute better. And most of all, how much have we heard from eBay lately about Skype & the Advertising deals?  Not much.  That’s a good thing.  

So, sellers – don’t get too down on eBay. We think 2007 will be much better.

Holiday Season Sales – When do Sellers Sell?

A question that lots of sellers ask us at SquareTrade is when to start listing items for the holidays and when to expect sales.   This is what we see our sellers do (volume of sales by week over the last 2 months).  

 

It is pretty steady for October, with some growth in November till Thanksgiving, and then the post-Thanksgiving explosion.  Clearly, buyers really tend to buy the most after Thanksgiving.

However, let’s not neglect the pre-Thanksgiving November increase. We have seen some sellers use November as their big sales month and do so very successfully. They rely on the fact that there’s increased buyer demand in November and limited competition.

Next year – you may want to think of pre-Thanksgiving sales as well.

GPS Devices: Becoming the new “must-have”

GPS devices are rapidly transitioning from a nice to have, expensive, car accessory to a must have, reasonably cheap device.    We think this is a great area for sellers to explore

The key is to drop below the $300 price point and start heading towards the $200 price point. Garmin’s cheapest c330 was available at Walmart’s website for below $300, according to TWICE.  While it’s not the newest technology, it’s a pretty compelling buy. 

These price points ($150-300) are going to blow the market right open. The value of a GPS device is pretty darn compelling, as we can all imagine when we’d need or use it. At $600, it’s hard to justify – at $200, it’s pretty easy to.

We think that this is going to be an increasingly big area and one very suited for selling off a website or on eBay. These are simple to use devices, there is no complex installation, they are very shippable. The margins are going to be OK for a while as the market is now going to expand very rapidly.  

We also think that this is a market where commodity manufacturers and brands are going to do well. These aren’t fashion items, they are practical items.

It might be time to start looking at sourcing GPS devices and testing the market.