What ebay can do to deliver superior performance in next 90 days?

ebay published its earnings yesterday. As a person interested in e-commerce platforms and retail market, it was appalling to see growth trailing industry average. To add to the woes, the next day headline read “Amazon tops expectations”.

As a two sided marketplace, it is never an easy business. There is an intrinsic conflict of interest with too many stakeholders to satisfy and guess what, it is not going away anytime soon.

ebay reported a flat revenue from past year and a fourth straight quarter without growth. Also, the profitability declined by more than half.

Talk of double jeopardy… This is what I would do in the next 90 days to turn around things… Note that the results will be seen in the following quarter.


This is what I would do in next 90 days…

  1. Make sure to align the technology to vision of Devin (We can save for another day to analyze the vision itself — How 80% items sold are new and 85% are fixed price and yet the focus would be on rare-to-find collectible items?)

Devin is on record that he is not intending to go to war with Amazon on logistics (a losing battle). He wants to focus on the emotional connection to the customer where customer is looking for rare-to-find things. How exactly are product reviews or related products (two of the feature changes discussed in the earnings call) help drive revenue here? For instance, if I am looking for a rare-to-find vintage Ford Mustang of which only two exist in the world, am I going to need help with “product reviews”? I am in the site having already done the research… Product reviews are super important but not if the focus is going to be on rare-to-find collectible items

2. Build the brand and drive traffic to the site. Talk to any brick and mortar retailer and they would beg, borrow or steal to have the customer in the store. That is more than half the battle won.

I hear too often the impact of SEO changes by Google and how ebay is relegated to the back pages of the results and how it is impacting the revenue growth. Why would Google do ebay any favor at all? As much as it is a search engine, aren’t they also in the e-commerce business and hence a competitor?

I would focus on getting the consumer to directly start searching on ebay.com. Before that however, there are many steps that Steve’s team will have to do… For instance, look at the landing page of ebay.com

ebay Home Page — Above the fold

What are the first impressions? First the real estate could have been used efficiently. Second, it could be more enticing to the consumer (research further, dig deeper or basically wanting to spend more time). The above screenshot is what is in above the fold (the first screen without scrolling). There are three items (a scrolling list of “For the One” items, a vintage car and outdoor tent). The menu bar starts with “Motors”, mentions collectibles and ends with Deals and gifts.

This gives an impression the site is for that rare-to-find items. I would assume that the old collectible cars to be the largest selling category followed by outdoor or sporting goods (Imagining ebay would put the items that the customers are most looking for in the home page).

Finally there is nothing to educate the customer that it not an auction house anymore but more than 85% listed items are sold for fixed price (Unfortunately, a perception that lingers even with highly informed online shoppers). I believe this perception is a major reason to not start a search on ebay.

In contrast, Amazon and etsy look like the following (I will leave the evaluation of the home pages to you)

Amazon Home Page — Above the fold
Etsy Home Page — Above the fold

3. Invest in analytics to understand customer need.

Amazon does logistics really well but that is not why customers go there. If that were the only reason, Walmart would beat Amazon hands down with the number of physical stores it can leverage from. It is more about the understanding of the customer behavior and their need. Just magically showing the item with a deal that I was thinking of “potentially” buying has its charm.


This focuses on the internal workings of the company and how efficiently the capital is deployed to generate the revenue it is making. After offloading Paypal in record 9 months (when the estimate was 18 months), ebay is a much leaner organization both on its books (also sold its enterprise unit and stake in craigslist) and by employees. However, with the narrowed focus and the smaller size also shines the spotlight on its inefficiencies.

I would focus on the following for the next 90 days to make an impact on the Q2 results.

  1. Standardize the processes

Paypal was a financial organization and thought and behaved like one. For instance, the risk appetite of Paypal would have been very different from ebay marketplace. However, they were joined together at hip and the processes were force-fitted for the entire organization.

I would start evaluating the processes and not hesitate to take bold decisions where necessary. For instance, what would be the SOP (over simplified version) of introducing new feature?

  • Identify the customer and establish the impact to the customer
  • How would the feature’s success/failure be measured?
  • How does this contribute to the overall business goal?
  • If for seller, is the feature A/B tested with different category sellers (individual, institutional, etc.) in different geographical locations?
  • How easily can the feature be turned off after Go-Live?
  • How will the feature be communicated and enforced, if required?
  • Will the feature impact any of the current listings and transactions?

Had these been followed, the “product identifier” feature that was introduced not too long ago would have been a smooth sailing.

2. Rationalize the application portfolio, infrastructure and the technology stack

There were 900 applications supporting the combined organization of Paypal and ebay. Even after the split, both companies have the same set of applications supporting half of the employees. I would immediately evaluate each of the application for the following two

  • Business value (Do I need this? Is there a better way to do without it?)
  • Technical soundness (Can it scale? Do I have support for the technology and can I maintain it?)

I would retire all the applications that are low in business value and re-engineer the applications with high business value but low technical soundness. I would retain and enhance the applications with high business value and high technical soundness

Apart from the applications, I would also standardize the infrastructure and the technology stack and gain immediate cost efficiencies on the following

  • Licensing
  • Training
  • Support
  • Intangibles (cross-team capabilities, higher resource utilization, faster time to market, etc.)

3. Off-shore non-core functions

This is a no-brainer to take advantage of the labor arbitrage. This can be easily combined to form a Shared Service Center to provide cross project support activities like PMO, infrastructure, testing, etc. Given that ebay maintains a localized version for the international markets, it may make sense to go for regional shared service centers than a centralized one or Center of Excellence (CoE)

To conclude, these are by no means a comprehensive list of efforts that would turn around the fortunes of ebay. With investor pressure, and niche players like etsy and vroom behind the heels and Amazon and Alibaba taking lion’s share of the growing pie, the path forward is not an easy one.

To top all of this, the falling share prices will dilute the brand perception and make it difficult to attract top talent. A sub par talent will only accelerate an implosion. But, ain’t difficult times require drastic measures? I think Devin’s task is cut out.