The Ebay Rag Mag

October 6, 2008

EBay Cuts Jobs, Buys Bill Me Later

Filed under: News & Gossip — ebaygossip @ 3:06 pm
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AP: Online auction site eBay says that it will reduce its work force by 10 percent which will affect about 1,000 jobs. EBay, which has been struggling to attract new users, also announced that it will buy three online companies, including payments business Bill Me Later.

SAN JOSE, Calif. (Oct. 6) – EBay Inc., which still reaps big profits but has been struggling to attract new users, said Monday it will cut about 1,000 jobs in an attempt to streamline its business. The cuts amount to 10 percent of eBay’s work force.

The online auction site also plans to get rid of several hundred temporary workers and reduce open positions. EBay Chief Executive John Donahoe said in a conference call the company is “creating efficiency” in areas that require it.

The company expects restructuring charges of about $70 million to $80 million as a result of the cuts, mostly in the fourth quarter. EBay said the reductions will lead to $150 million in annual cost savings.
The latest round of cuts follows eBay’s announcement earlier this year that it was cutting 125 jobs in Europe and North America, including 70 posts at its headquarters in San Jose, Calif.
Donahoe said Monday the weak economy and the effects of the strengthening dollar are “affecting our businesses.” Nonetheless, eBay said its third-quarter earnings would be higher than it predicted in July – though revenue will be at the low end of its expectation. The company is scheduled to report third-quarter results on Oct. 15.
EBay shares were down $1.19, 6.3 percent, at $17.75 in morning trading.
EBay also said Monday it will buy online payments business Bill Me Later for $820 million in cash and $125 million in outstanding options. The company also said it will buy Danish classifieds site dba.dk and vehicles site bilbasen.dk for $390 million in cash.
Bill Me Later allows online retailers to offer shoppers credit. EBay said Bill Me Later has “sophisticated underwriting techniques” and tells shoppers within seconds if they’re approved for credit, without detailed application forms. Bill Me Later will become part of PayPal, the online payment service eBay bought in 2002.
Copyright 2008 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.
2008-10-06 08:12:22

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September 7, 2008

eBay Plans To Force Small Sellers Out of Business

Written by By: Ina Steiner
Sat Sept 6 2008 21:29:36

Points highlighted and tweeked by eBay Rag Mag

eBay announced a Diamond-level PowerSeller tier in June, and as I blogged in mid-August, more corporate size companies will be joining Buy.com and be allowed to list on the site for free. Now I’m hearing that eBay is introducing a pilot program next month in which a number of manufacturer and big-box retailer catalogs will be launched to eBay. Third-party vendors will work with these sellers to get them onto the eBay platform – no small feat given the quantity of product SKUs in their catalogs.

These Diamond PowerSellers will be given special privileges. Commission (FVF) fees will be negotiated individually, and it’s my understanding that participants in this pilot will not be charged listing fees, nor will they have to meet eBay’s seller standards during the 90-day pilot program, which I’ve dubbed Operation Catalog.

The potential Gross Merchandise Volume of these sellers is enormous, and it fills out eBay’s product line and helps it move toward providing a more uniform buying experience on the site, or so it hopes.

The flood of inventory onto the site in October could have a major impact on certain sellers in categories affected. As I write in tomorrow’s editorial in AuctionBytes-Update, not only will some sellers find themselves competing with the manufacturer of the product they sell, but that competitor is getting free listings and better exposure.

If Operation Catalog does roll out in October as expected, sellers will find themselves going up against competition they never knew existed, with no time to adjust their selling strategy during the all-important holiday shopping season.

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The general consensus among eBay power sellers is that this prospective change might explain…

Limits on listing certain brand-name items
Crackdown on trademark violations
Crackdown on MSRP and MAP on certain brand names
Elimination of Ebay Express
Reverting neutral feedback back to neutral
No more negative feedback for buyers
Limits on shipping charges (to raise item price)
Pushing free shipping (to raise item price)
30-day FP listings (if you sell just 1 you can’t adjust the price)

Looks like the big guys don’t want any “unfair” competition!

Ware all wondering if this is also the reason behind the new payment recieving policies  being that of Pay Pal only.  These larger sellers are not going to be using paypal, so naturally the stay at home moms and single mothers will be the ones to pick up the tabs that the major corporations are building up.

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