Initiatives in eBay Marketplaces have been slow growth drivers


Dec. 4 2020, Updated 10:52 a.m. ET

eBay’s core segment Marketplaces accounts for 52% of the company’s total revenue. Marketplaces sees competition from, Inc. (AMZN), Overstock (OSTK), Groupon (GRPN), e-commerce sites of large retailers such as Walmart (WMT), Target (TGT), and also Etsy, Bonanza, Ruby Lane, Zulily (ZU), ArtFire, and Webstore.

CEO John Donahoe acknowledged the slowing growth in Marketplaces on the 4Q earnings call and said that “offline is taking longer to become digitized than we initially thought.” The majority of eBay’s Marketplaces revenue comes from a take rate on the gross merchandise volume, or GMV, defined as the total sales for active listings or of all the items. The take rate is the percentage of revenue eBay gets from every transaction it processes. Marketplaces GMV excluding vehicles grew 13% in both the fourth quarter and full year totaling $76.5 billion in 2013. Revenue grew 12% in both 4Q 2013 and the full year, totaling $8.3 billion in 2013. Marketplaces gained 4.6 million active users in the last quarter and ended the year with 128 million active users. Fixed price GMV excluding vehicles grew 19% globally in the fourth quarter and represented 73% of total GMV.

eBay had over 550 million items listed for sale as of December 31, 2013. For 2013, approximately 60% of its GMV was international (i.e., outside the U.S.), and approximately 17% of its GMV was cross-border.

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In October 2013, eBay introduced a set of new features to make browsing and buying on eBay more personalized. The company also announced a series of steps it is taking to accelerate local commerce, including same day deliveries, home deliveries, and plans to extend its popular eBay Now delivery service to 25 markets by the end of 2014. eBay Now, a service available via mobile and desktop, allows shoppers to have products from local stores delivered in as little as an hour.

eBay launched a beta version of eBay Hire designed to eventually let service professionals sell and market their services to eBay customers in their neighborhood. Interested professionals will have a profile page, where customers can learn about their experience and rates. eBay Hire is currently not charging a sign-up fee, or making any commissions but the company eventually expects to charge fees for each booking, similar to the fees charged when users list and/or sell items on This service will compete with TaskRabbit, Zaarly, and a number of other companies in the local services marketplace space.

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The company also rolled out the new Cassini search engine that uses a ranking system to connect buyers to those product listings and sellers that are most interesting to them. Rankings could be influenced by listing titles, catalogue entries and item specifics, complete item descriptions, seller performance and customer satisfaction, as well as the performance of particular listings and products over time.

Options for consumers

eBay believes the mix of sales under its traditional auction-style listing format and fixed-price listing format will continue to shift toward the fixed-price format. On eBay’s Marketplaces, consumers have a choice across a number of dimensions:

  • Listing format: Merchants and individuals can choose to list their products and services through fixed-price listings, an auction-style format, or via classifieds websites that have listings in over 1,500 cities around the world. eBay has a non-controlling equity investment in Craigslist, Inc., which operates the Craigslist classifieds websites.
  • Item condition: Merchants and sellers can list, and consumers can search for and buy, items that are new, refurbished, and used, common and rare items, and branded and unbranded products.
  • Delivery format: Consumers can have items shipped to them through shipping options. For certain items in a limited number of U.S. markets, consumers can have the items couriered to them in about an hour through the eBay Now service. There is also a choice of in-store pickup.

Fee structure

Both prospective buyers and sellers can join eBay for free. Sellers are charged three kinds of fees: a fee each time an item is listed for sale (insertion fee), optional fees if the seller wants to enhance the item listing’s appearance and appeal, and a final value fee that is charged only if/when an item sells. Final value fees are calculated based on the total amount of the sale and are charged per item.

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eBay simplified its fee structure in March 2013 to attract more users and to combat competition from Amazon. Under the new structure, eBay offered more free listings and eliminated its category-based, tiered commission fee structure for non-store owners in favor of a flat across-the-board commission. Sellers—depending on the volume of their business—are allowed to list as many as 2,500 items free each month before eBay starts charging listing fees. The smallest sellers can list the first 50 items a month for free. For larger volume sellers, eBay introduced new final value fees ranging from 4% to 9%, depending on the product category. The reduction in listing fees was aimed at getting sellers to list more products, and thereby, get more inventory onto eBay.

Customer value

The Marketplaces platform has a number of features for trust and safety (including Feedback Forum, SafeHarbor Program, Verified Rights Owner Program, eTRS, and eBay Buyer Protection), customer support and value-added tools and services, as well as loyalty programs (for both buyers and sellers). These features are designed to make users more comfortable trading with unknown partners and completing transactions online or through mobile devices, as well as rewarding the top buyers and sellers for their loyalty.

For more on an e-commerce platform enabling worldwide customers to create, buy, and sell products, see Why CafePress is a leading and undervalued e-commerce platform.


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