Merchant Innovation

Amazon’s Growth Is eBay’s Pain

As Amazon’s list of merchants continues to grow, it may be having an impact on the merchants who were once loyal to eBay, Bloomberg reported.

Citing Amazon CEO Jeff Bezos, who said that Amazon’s merchant base grew to roughly 2 million in 2014, Bloomberg said the eCommerce giant is outpacing eBay’s flat growth that hasn’t toppled above its 25 million sellers in a two-year period.

“The new figures pose a threat to eBay since Amazon boasts a bigger user base and offers more ways to ship merchandise,” Bloomberg reported. The threat to eBay during the past year has been a common sentiment that’s been discussed by analysts as a result of eBay’s weak holiday quarter sales, which CEO John Donahoe said was a result of marketplace traffic slowdown because of how Google changed its SEO search results. eBay has also been under pressure from its top investor Carl Icahn, who insisted eBay and PayPal split — suggesting that eBay’s slow sales were dragging down PayPal’s full potential. The eBay/PayPal split is expected to occur sometime in 2015.

Bloomberg spoke with Chance Knapp, CEO of Vivo Technology who said they saw a drop in its eBay sales in the last year but that was offset but its Amazon sales growth.

“We saw sales drop 10 percent on eBay and gain 10 percent on Amazon,” Knapp said, referring to product lines that were sold by the company in 2014. “It was like customers were actually shifting from eBay to Amazon.”

While Amazon charges more for its services, merchants tell Bloomberg that the extra price is worth it since Amazon can produce higher sales for many of those sellers. And as more merchants may worry about eBay’s future growth, more may be turning toward Amazon as it seems to be producing more returns for its merchant customers.

“EBay remains a good part of the business, but it’s on life support and the growth is on Amazon,” Scott Wingo, CEO of ChannelAdvisor told Bloomberg. ChannelAdvisor is a consulting company that helps merchants sell their merchandise. Wingo indicated the shift from eBay to Amazon merchants seemed to happen in 2014, when eBay’s problems came to light. eBay still has the most sellers as the largest marketplace in the U.S., but the inability to grow that number may contribute to merchants wanting to leave, Bloomberg reported.

One eCommerce executive, in particular, thinks eBay has lost its edge to Amazon.

“EBay has lost its sight,” David Epstein, eCommerce director for London-based told Bloomberg. “EBay doesn’t think as a retailer, but Amazon does because so much of its business is retail.”


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