eBay’s Boycott Fails, Profit Soars

Category Internet

eBay

Many people, sellers had been boycotting eBay for a long time but it looks like the boycott did not affect eBay at all. The company reported earnings of 2,198$ USD with a revenue increase of 24% over Q1 of 2007. Net income also rose to 562M$ USD. The performance of the company significantly beats analyst expectations. However, the company admitted that the “conversion rate” i.e. the percentage of sales ending in success has declined from the past year. All the sellers that boycotted eBay had very few alternatives since amazon.com only allows resale of selected item and craiglist.com is avoided by many buyers for its bad reputation of illegal activity.

However the future of the company looks bleak. In the first quarter of 2008, eBay had 83.9 million users, which is only a 1% increase from last year Quarter 1. This indicates that eBay may be reaching a market saturation point and in this case, customer satisfaction becomes very important for eBay. From next month, eBay is all set to eliminate the negative feedback from sellers to buyers thus leaving normal sellers at the mercy of their buyer’s review. Power Sellers though will get some new tools for their safety.