eBay’s 4th Quarter Results – What They Mean to Those That Sell on eBay

Yesterday, eBay released their 4th quarter 2008 financial results. If you sell on eBay, then you need to be aware of a few things that were either announced yesterday, or will be announced next week.

First and foremost, as we posted yesterday, eBay CEO Meg Whitman is retiring effective the end of March. Also, Bill Cobb is stepping down as eBay North America president at the end of 2008. In other words, there are big changes afoot with eBay’s upper management.

There are also big indicators pointing to a fairly significant eBay fees restructuring that will be announced on January 29th at the annual eBay eCommerce Forum in Washington, DC.

What you need to take from yesterday’s financial results, as well as next week’s fee announcement, is what will affect you, the eBay seller. You need to focus in on what will affect your ability to make money on eBay.

The really big issue at hand is the restructuring of eBay’s top management. John Donahoe will be replacing Meg Whitman as the eBay CEO. John is not exactly new blood, as he currently is the head of eBay Marketplaces. We are not really sure if this is good or bad, only time will tell. A totally fresh perspective from somebody outside of the company can be a great thing, as it brings new ideas to the table. But this is not generally how large corporations work. They prefer to promote from within. When Meg was hired as a CEO, there was no one internally to promote, so they had to hire outside of the company. That is not the case now.

So here we are hoping that John can really bring a fresh perspective to the position of eBay CEO. His leadership will have a large affect on your ability to make money on eBay. If John is able to change the course of eBay to benefit both the buyer and the seller, then more great things are in store for you, the eBay seller. If he is not able to make the necessary corrections, then it will be more of the same for those making money on eBay.

We are very excited to see what next week holds as far as eBay fees go. If eBay makes the anticipated moves of free gallery, lowering insertion fees, and possibly raising final value fees to compensate, there will be lower risk to the eBay seller in getting items up on the site. You will be paying the majority of your eBay fees after you make the sale. In other words, only once you have made money will you give eBay the majority of their fees.

Of course, and this is only speculation, if eBay makes it more affordable to put up listings, will eBay become full of junk items? Will this seemingly good gesture backfire and ultimately hurt those that sell on eBay?

As it stands now with higher insertion fees, you should be reasonably certain your item will sell before you list it; otherwise you are wasting money in your attempt to make money on eBay. If insertion fees are lowered, then you don’t need to be as certain your item will sell. You can throw more stuff against the wall to see what will stick, so to speak.

Anyhow, we digress. We will wait until next week’s fee announcement before we really tell you how we feel.

2008 is shaping up to be a big year for eBay. The changes that will occur during the next 11 months have the potential to define eBay for years to come. Let’s hope the new management is what eBay needs to move forward. The decisions that they make are the ones that will affect our future ability to make money on eBay.

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