eBay Q4 2023 Pre-Earnings Countdown & Highlights
eBay is set to announce Q4 2023 earnings February 27th at 5:00 PM Eastern. Take a look back at highlights from Q4 and what's happening so far in Q1 2024!
Leadership Changes & Corporate News
eBay announced a mass layoff of off 1,000 employees in January, as CEO Jamie Iannone steadfastly proclaimed his strategy is working, while also being forced to admit "overall headcount & expenses have outpaced the growth of our business."
The layoffs brought new attention to eBay's in-house authentication initiatives, raising questions about the costs and risks associated with increasing labor-centric operations.
Liz Morton
Iannone will likely face challenging questions about the future of eBay's strategy on the Q4 call as Chief Business Strategy Officer Stefanie Jay has reportedly resigned following the layoffs.
If true, was she chosen to be the sacrificial lamb in an attempt to appease stockholders and minimize PR fallout for the company's performance?
Liz Morton
Despite Iannone's assertions that the "strategy is working", new job postings reveal eBay may be seeking fresh ideas, with a possible pivot back to a wider consumer-seller focus.
Other recent notable departures include Head of Business Development, Kohl Perkins, who left eBay after 7 years for Walmart Marketplace, Chief Operating Officer eBay UK Cristian van Tienhoven and long-time Seller Experience, Community Manager Brian Burke.
Liz Morton
Burke's departure after almost 25 years was followed by an announcement the monthly eBay community chat has been discontinued, raising concerns that eBay may be pulling back even further from already meager seller engagement efforts.
eBay has finally named new leadership for Sneakers and Streetwear, promoting Director Global Strategy and Operations Jonathan Gunawan to General Manager Global Sneakers.
Liz Morton
That change was clearly needed as analyst Chris Burns at ARCH-USA recently revealed troubling reports that several sneaker industry consultants were ghosted by previous eBay Sneakers leadership and eBay did not appear to have a great understanding of the concepts that were pitched to them to help ramp up their involvement in sneaker culture.
The layoffs also brought renewed attention to eBay's corporate culture and priorities as well as seller concerns about increasing use of AI for critical support, trust and safety functions.
Liz Morton
Those concerns would appear to be well founded as recent promotions and job title changes show the importance of AI and the changing face of Global Customer Experience at the company.
eBay has agreed to pay $59 Million to settle DEA allegations regarding pill presses sold on the site, in historic fourth-largest controlled substances act settlement in history and first against an ecommerce company.
Litigation brought by the EPA regarding dangerous chemicals, prohibited pesticides and emissions-control defeat devices sold on the platform continues to wind its way through the legal system, with eBay citing Section 230 defense in efforts to get case tossed out.
eBay has also been found criminally liable in connection to the 2019 cyberstalking of journalists Ina and David Steiner of EcommerceBytes, and agreed to pay a penalty of $3 million - the civil case in this matter against eBay, ex-CEO Devin Wenig, ex-Comms Chief Steve Wymer, ex-SVP Global Operation Wendy Jones and others is still heading toward a 2025 trial date.
Liz Morton
The deal also requires eBay to undergo enhanced compliance monitoring for 3 years, including a specific focus on Mergers and Acquisitions due diligence, disclosure and risk management.
Liz Morton
That may be a nod to broader due diligence and disclosure concerns raised by eBay's acquisition of trading card marketplace TCGPlayer, which led to the formation of the first US labor union in eBay's history and sudden departure of Chief Accounting Officer Brian Doerger last year.
eBay is dragging their feet on bargaining with TCGUnion-CWA, despite the National Labor Relations Board finding merit in multiple unfair labor practice charges filed against the company.
A group of eBay/TCGPlayer sellers has banded together to air concerns about eBay's acquisition of the collectible card game marketplace, treatment of unionized workers, alleged retaliation against their selling accounts, and anti-competitive practices in a letter sent to Iannone, TCGPlayer CEO Robert Bigler and eBay's Board of Directors.
Liz Morton
Mystery still surrounds 2022 consumer fraud incident noted in eBay's Q3 2022 10-Q report as new reports have emerged shining light on years long multi-million dollar triangulation scheme using over 500 fake PayPal and eBay accounts.
Liz Morton
And finally, Workday CFO, Zane Rowe, has joined the board in a move eBay says will bring "significant expertise in finance, strategy and technology development" to the company.
Liz Morton
Updates and New Features
eBay is lagging significantly behind in their AI initiatives, continuing a long history of unfulfilled tech innovation promises.
Liz Morton
Their image recognition capabilities for product search and discovery continue to provide inconsistent results, the AI description generator had rough launches on both mobile and desktop, and the promised "take a picture and let AI do the rest" Magical listing experience has yet to be seen live in the wild, apparently stalled in employee beta testing.
Liz Morton
Meanwhile smaller competitor Mercari has already deployed their image based listing tool, Poshmark appears poised to beat eBay to the punch as well and Shopify and Amazon have both introduced conversational AI shopping assistants for buyers.
The final design for phase one of Ebay's new View Item Page design has been chosen after 9 months of testing with phase two planned for sometime in 2024.
Liz Morton
eBay continues to rollout changes to the feedback experience, changing sort order from "most recent" to "most relevant", allowing buyers to add publicly viewable pictures with their feedback comments left for sellers and adding a "verified purchase" label to remind users feedback on eBay can only be left by buyers and sellers who participate in transactions on the platform.
Liz Morton
Updates to Price Guide and Collection beta are underway for the first time since it launched in August 2021, providing enthusiasts with more ways to organize their card collections and access new features for the eBay Vault.
Liz Morton
eBay added AI caption creation and scheduling functionality to Social sharing tool in November, but major scheduling delays and lag time negates the purpose of this critical user function.
Liz Morton
Marketing & Promoted Listings
eBay hoped to entice sellers to try out Offsite Ads beta with a promise to "reach new buyers during the busiest time of the year, while saving" with a $100 ad credit.
Liz Morton
As other marketplaces put holiday marketing plans into motion, eBay made it clear once again sellers were on their own to drive seasonal sales at ever increasing costs for Promoted Listings ads and seller-funded discounts.
Liz Morton
What started as a clever anti-big game marketing campaign, turned into a masterclass of how to flush brand reputation and goodwill down the toilet for both Liquid Death and eBay after DUDE Wipes claimed the winning bid for ad space on Liquid Death packaging and Liquid Death backed out, alleging "technical issues" on eBay's side prevented some brands from bidding.
Liz Morton
Buyers are confused and concerned by a new eBay advertising ploy suggesting items "you might also like" in a post-purchase pop up, leading to increased cancellations and chargebacks.
Liz Morton
Payments & Fees
Sellers who utilize eBay Seller Capital loans were unceremoniously informed that eBay is no longer partnering with LendingPoint, providing no advanced warning of this important change to the lending program.
Liz Morton
Efforts to end unpaid items on the platform have taken one step forward and two steps back as eBay finally provided details on changes to immediate payment for seller initiated offers, but previously available settings to require immediate payment for auctions have been quietly removed.
Liz Morton
eBay has released their Winter 2024 Seller Update and the big news is the per order transaction fee will be increasing from $0.30 to $.40 for orders over $10 across all categories, starting March 15.
Liz Morton
The costs of increasing regulation add up and eBay is passing them on to sellers as part of the latest business seller update for the UK and some EU countries, effective April 8.
Liz Morton
Final Value Fees will be increasing across the entire jewelry category (excluding watches, parts and accessories) months after expanding Authenticity Guaranteed for Jewelry to the UK market, mirroring similar changes that were made when jewelry authentication was introduced to the US.
Liz Morton
eBay also appears to be testing out the possibility of fee free selling for private (C2C) sellers in the UK with a special invitation promotion for zero selling fees through April, including no listing fees, no fixed $0.30 per transaction fee and no variable Final Value Fees.
Liz Morton
Shipping
eBay sellers experienced a strange issue that caused shipping rates to fluctuate before USPS rates officially went up in January, possibly related to programming changes being made to accomodate finally offering cubic rate shipping.
Liz Morton
Sellers continue to pushback on eBay's efforts to pressure them in to offering discounted shipping rates, saying the company should consider lowering fees if they are concerned about items on the site not being price competitive.
Liz Morton
That's it for the pre-earnings recap - catch up on our coverage of Q3 2023 earnings and stay tuned for full commentary on eBay's Q4 and full year 2023 results from Value Added Resource!
