eBay posted record revenues and profits. This is great news for Wall Street and investors, but what do the numbers mean to eBay sellers and eBay business owners?
eBay defied the analysts once again. Fourth quarter financial results came in well above expectations. This is great news for my retirement fund where I still have a few shares, but what does it mean to me as a regular eBay seller?
Well it is actually good news. The financial numbers deal with earnings per share, GAAP and non-GAAP income, and cash flow. That is all of great interest to investors, but let’s look behind the financial numbers to some of the operating numbers that matter to us:
US Gross Merchandise Volume, the total of all goods and services sold on eBay.com (US), grew from $5.9 Billion to $6.7 Billion over the same period last year. That is about 15% growth. Not as fast as the early years of eBay, but eBay was much smaller then and could grow much faster.
The number of items listed on eBay only grew 4% from 261 million to 272 million, but that reflects the large number of store listings that were taken down in the previous quarter when eBay raised store fees to re-balance the marketplace. That effort was apparently successful as more auction style listings resulted in more overall goods sold. Before eBay raised the store fees, a lot of those listings were non-performing goods that just sat in stores and never sold.
New member growth was also solid. The number of registered users in the US grew 17% from 83 million to 97 million. That is almost 40% of the entire adult population of the United States. As I said these numbers are not spectacular, but they do represent solid growth and more closely reflect a mature company rather than to go-go days when eBay was still pretty new.
Lastly the number I like to watch is the number of active users, those who bid, bought or listed an item. Active users grew by almost 25%.
International growth actually outpaced eBay US where eBay is still growing new members at a 27% rate. New listings grew 19% and GMV 26%. I have seen a reflection of this in our numbers. Our international sales are up sharply over the same time last year. During the 2005 Christmas season, about 10% of our sales were to overseas buyers. This more than doubled during the 2006 Christmas season. Shipping and paperwork is somewhat of a hassle, but we tend to get much higher prices which makes up for the additional effort.
Since all of eBay’s fees come from sellers, they have to do well for eBay to do well. eBay has promised some new initiatives to reduce fraud which is one factor that scares buyers away and has so far only announced a modest fee increase, so the environment for sellers looks pretty good going into the new year.
- The Complete eBay Marketing System by Skip McGrath
Complete printed business manual with everything you need to build an eBay business