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Q: Ebay sales ( Answered,   0 Comments )
Question  
Subject: Ebay sales
Category: Business and Money
Asked by: aussies-ga
List Price: $10.00
Posted: 13 Nov 2002 18:28 PST
Expires: 13 Dec 2002 18:28 PST
Question ID: 107327
What is the sales profile of ebay as a distribution channel? For
example, what items have the highest volumes of sales, is there any
data relating to number of bids for items in particular categories,
and is there any indication of relative profitability of the channel
for the seller, and relative discount for the buyer. I will be happy
to tip for specific data. Thanks
Answer  
Subject: Re: Ebay sales
Answered By: ctw-ga on 14 Nov 2002 09:45 PST
 
Aussies-ga:

There is no simple answer to your question, “What is the sales profile
of ebay as a distribution channel?” Ebay’s annual sales volume is one
of the largest world-wide, and since almost anything can be traded on
ebay, the profile of the bidders, sellers, and the sellers’ business
models varies widely. (Of course, if the answer was easy, you’d have
answered your own questions, and not come to us for help. <g>)

I can provide some educated and informed comments about ebay, since I
have helped build two self-sustaining businesses on ebay.

Speaking very generally, there seem to be three broad categories of
ebay sellers: Powersellers, who make their living on ebay or use ebay
to build up their previously existing on- and off-line businesses,
infrequent sellers, and large businesses who are exploring the use of
ebay as a new distribution channel. Products sold tend to be either
highly commoditized items appealing to bargain-hunters or unique and
hard-to-find items. Meg Whitman, ebay CEO, categorizes ebay sales in a
recent interview: “The kinds of goods that sell on eBay are on both
ends of the product life cycle. The unique and new and hard-to-find,
like Sony PlayStation, XBoxes, Furbees, or Beanie babies, when they
were hot. And the other end of the product cycle: used, vintage,
overstocked, refurbished, returned kinds of items. [Those extremes]
are where the vast majority of eBay sales occur. “
“Meg Whitman’s Bid for Growth,” Edited by Douglas Harbrecht
Business Week Online
( http://www.businessweek.com/technology/content/oct2002/tc2002101_8728.htm
)

The trend towards the two end of the sales cycle is attributable to
the ebay fee structure combined with the low-price/high-service
demands of the buyers. For bargain-hunters, price is paramount, and
competition among sellers is high, which depresses sales margins. EBay
seller fees can be relatively high, amounting to about 10% of the
final winning bidder’s sales price. These factors combine to make
selling widely-available items a labor-intensive yet low-margin
business. The PowerSeller message boards are filled with posts from
hard-working sellers who find maintaining overall sales volume and net
profits a daily struggle. As ebay evolves, the economics of utilizing
ebay as a sales channel is evolving, making it most appealing to those
selling unique items where availability is paramount, or lucrative for
those liquidating items in this channel which affords greater margins
and much wider exposure to the market than traditional liquidation
channels. This trend is outlined well in the recent Fortune article,
“Is This Any Place to Run a Business?,” by Alan Cohen, from November
1, 2002, available online at:
(http://www.fortune.com/indexw.jhtml?channel=artcol.jhtml&doc_id=210145
)

You are asked about specifics. The Analyst’s roundtable 2001 Q4 report
available in PDF format from CallScribe
(http://www.callscribe.com/Samples/EBAY_Q4_2001_Earnings.pdf )
provides interesting data on gross sales figures and projected growth
categories:

Year over year growth: Consumer electronics up 66%, Jewelry up 60%,
Books, movies, and music up 54%, Toys up 39%, Art and antiques up 31%,
Home and garden up 145%, Tickets and travel up 141%, and Clothing and
accessories up 111%. Computers and Consumer Electronics each had an
annualized run-rate of 1 Billion dollars, and Collectibles and Sports
each ran at $900+ million.

EBay itself has started publishing figures on the most actively bid
items in each of its categories, and announces “hot” items- hot
products are those where the bidding activity outpaces the seller
listing activity, indicating growth in demand. In the Travel category,
Event Tickets: Travel, Other Travel, and Vacation Packages are the
current hot items. Hot Toy products are: Action Figures: GI Joe,
Voltron; Building Toys: Erector Sets, K'NEX, Lincoln Logs; Classic
Toys: Colorforms, Etch A Sketch, Spirograph; Toy Vehicles: Boats,
Ships; Cars; Robots; Spacetoys; and Steiff Stuffed Animals. In 
Gadgets & Other Electronics: GPS, Police Scanners, Voice Recorders;
Handspring Visors and Sony Handheld/PDAs; Video Games: Atari,
Colecovision, Nintendo, Sega Master; and in Wholesale Lots: Phones and
PDAs.

If you are a registered ebay user, the above information is available
by following this link:
(http://forums.ebay.com/dws?14@222.rUttgbDVKDY^0@.ef74be0 )

A software tool widely used by those who scour eBay looking for sales
trends is HammerTap's DeepAnalysis, available at HammerTap.com (
http://www.hammertap.com ) The AuctionBytes NewsFlash newsletter,
published daily, often uses HammerTap to analyze sales and
sell-through rates on specific products. AuctionBytes subscriptions
are available, free, on the site at ( http://www.auctionbytes.com )

Today’s newsletter analyzes McCoy Pottery sales, and notes that there
is an uptick in the number of listings (16,202 on November 13 vs.
14.464 on August 12). Sell-through rate has dropped, at 60% on August
12 and now 54%. The average sales price has dropped slightly as well,
at $26.60 on August 12, and at $24.70 on November 13. If you’d like to
check the archived editions of NewsFlash to read other trend analyses,
this link will get you to the archives:
(http://www.auctionbytes.com/cab/pages/search/results?query=NewsFlash+archives
)

Going back to the general sales trends from the drilled-down
specifics, eBay’s own press releases point to the likely future
direction of the site: Travel and ebay Motors are the fastest growing
categories, Collectibles encompass roughly 20% of the business on
ebay, the 80/20 rule applies on ebay- 80% of the sales are generated
from 20% of the sellers, and “Big Business (branded corporations) are
currently about 5% of the total sales, and are not anticipated to grow
beyond 10%.

Since there are literally millions of distinct products sold on eBay,
it’s difficult to make generalizations that hold true across all sales
and sellers. It’s also tough to create a comprehensive answer that
encompasses drilled-down specifics on myriad products. I’ve done my
best to provide general trends as well as resources for your further
research. I sincerely hope this information is of value to you!

Clarification of Answer by ctw-ga on 20 Nov 2002 17:27 PST
Sorry, I neglected to provide my Google search strategy in my original
answer. Search terms used were:
hot items site:www.ebay.com
ebay category growth
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