eBay returns to its roots
In a dramatic about-face, eBay last week announced that their three-year plan involves returning to their original focus as a venue for selling used, off-season and end-of-life-cycle goods. Implicit in this change of direction is the admission that their attempt to mimic Amazon has been a failure.
But the eBay team was upbeat, forecasting an overall revenue increase from $10 billion to $12 billion in 2011, $7 billion of which will be coming from its marketplace. With 25 million sellers currently serving 150 million unique visitors from around the world across 50,000 categories, eBay still believe they are a major player with a bright future.
According to Ina Steiner’s EBay Analyst Day Notes, eBay believe the secondary market has a number of advantages:
1. Secondary market goods have uncertain value, so they can be sold via a variety of different formats, which is good because it increases turnover on the site.
2. Buyers are focused on getting the best deal and don’t have such high expectations of professional service (as they do when they purchase new goods).
3. The secondary market is inefficient.
4. The secondary market grosses 500 billion dollars a year worldwide.
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