The eBay Seller Confidence and Satisfaction Report – December 2006

Welcome

Welcome to the first semi annual eBay Seller Confidence and Satisfaction Report. Our goal is to measure eBay seller confidence and satisfaction in their business, their relationship to eBay, as well as their short and long-term outlook. Our mission is to establish benchmarks that will allow us to, over time, identify trends and themes that will prove useful for the market.

Background

Over the past year, several significant changes have taken place in the eBay marketplace, providing an excellent backdrop to measure sellers’ attitudes and feelings. The most important changes in the eyes of eBay sellers have been with increases in fees and the impact on their bottom line as well as policy changes involving stores that have lessened the perceived value of and ability to find items in stores. The visibility of auction listings vs. store listings was a major reason eBay made these changes. With increased competition and the growth of eBay (as a company and an online auction destination), we found this to be an opportune time to take the temperature of eBay sellers and monitor trends going forward.

Methodology

We asked a random sampling of 316 eBay sellers a series of questions designed to learn more about their experience level, expectations, and to gauge their business outlook. The data was filtered and analyzed to look for significant patterns and themes across a wide variety of sellers.

Results

• Invest more time, be more confident and satisfied
  Overall, we found that the more time and focus an eBay seller places on their eBay business (i.e. full-time vs. part-time), the more confident and satisfied they are in their business and their future potential. Those more intimately involved with their business and therefore in the happiness of their customers reap the rewards of the strength of the eBay marketplace.
• Sellers with a unique advantage
  With over 85% reselling items they purchase elsewhere, a large majority of sellers are more susceptible to fee increases, eBay policy changes, increased competition, and market fluctuations. What attracts sellers and buyers to eBay is the enormous potential of the eBay market, while those who compete on price are at a distinct disadvantage over sellers who manufacture or create their items, or have a unique item or service to sell.
• eBay is still the most popular online auction destination for sellers, with most listings coming from auctions. Seventy three percent of sellers report getting over 50% of their online business from eBay, with 27% getting their online auction business elsewhere. Regardless of sellers’ feelings about eBay and their new fee structure and policies, eBay is still overwhelmingly the choice of online auction sellers. Also, 87% report that over half their business comes from auction listing vs. their eBay store. Many respondents commented that they have closed their stores, while some choose to offer auction loss leaders in hopes of bringing buyers to their store.
• Seller confidence is strong The confidence shown by sellers is strong, with 45% saying they are somewhat or very confident that this holiday season will be better than last year. Confidence among PowerSellers is highest, with 61% showing confidence in the coming holiday season. Sellers who also maintain a brick and mortar store presence are much less confident, with only 20% expecting a better holiday season for 2006.
• Still a growth market
  Slightly more than half (51%) of all sellers see their business as growing while 37% see their business as neither growing or shrinking. Conversely, fully 70% of those who list over 50 items a week report that their business is growing. Clearly, our data confirms that the more listings a seller publishes the more business they will generate, even with higher fees. Those who characterize their business as growing are significantly more satisfied and confident with their business, their profitability, the direction of their business and with eBay as a partner. While 42% of all sellers are satisfied with eBay as their business partner, only 14% consider themselves very satisfied with eBay as their business partner.
• Satisfaction is strong
  Overall, 62% of sellers are somewhat or very satisfied with their eBay business, while 51% are satisfied with their profitability, 42% are satisfied with eBay as their business partner and 55% are satisfied with the direction of their business. Those numbers increase modestly for sellers who report that eBay is their full time job, while the numbers dip only slightly for those who view eBay as a side job. Factor in sellers who are also PowerSellers and these figures rise modestly with a sharp rise in profitability. Interestingly, sellers who have been with eBay for over 4 years are slightly more jaded, with less confident numbers across the board.

Conclusions

Overall, eBay sellers are a somewhat satisfied group that aren’t quite satisfied with eBay as a partner in their business, mostly due to fees and store policies. They are relatively happy with the direction of their business – even more so if they’ve taken the leap to selling on eBay full time – a good sign for eBay and the strength of their online auction marketplace given that their most intimate customers are their most ardent supporters, without signs of disillusionment. Sellers are taking a wait-n-see attitude toward the upcoming holiday season with newer sellers showing more confidence than veteran eBay’ers. Across the board, sellers are confident and optimistic about the future. We’ll continue to track future developments in order to assess how market pressures and eBay policy changes affect sellers.